SGM Metals: $1.3 Billion More in Secret FED Loans to Banks

Dec. 1, 2011 - PRLog -- Bloomberg reports: [ The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.

The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.

Saved by the bailout, bankers lobbied against government regulations, a job made easier by the Fed, which never disclosed the details of the rescue to lawmakers even as Congress doled out more money and debated new rules aimed at preventing the next collapse.

A fresh narrative of the financial crisis of 2007 to 2009 emerges from 29,000 pages of Fed documents obtained under the Freedom of Information Act and central bank records of more than 21,000 transactions. While Fed officials say that almost all of the loans were repaid and there have been no losses, details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger.

$7.77 Trillion

Bankers didn’t disclose the extent of their borrowing. On Nov. 26, 2008, then-Bank of America (BAC) Corp. Chief Executive Officer Kenneth D. Lewis wrote to shareholders that he headed “one of the strongest and most stable major banks in the world.” He didn’t say that his Charlotte, North Carolina-based firm owed the central bank $86 billion that day.

JPMorgan Chase & Co. CEO Jamie Dimon told shareholders in a March 26, 2010, letter that his bank used the Fed’s Term Auction Facility “at the request of the Federal Reserve to help motivate others to use the system.” He didn’t say that the New York-based bank’s total TAF borrowings were almost twice its cash holdings or that its peak borrowing of $48 billion on Feb. 26, 2009, came more than a year after the program’s creation. ]

In short, the banks have been spending tens of millions of dollars to lobby Congress to keep the borrowing the banks did to cover their losses and recover during the financial collapse of 2008 a secret so investors and depositors would be none the wiser and leave their hard earned money in their bankrupt institutions. In a true free market one needs to know what institutions are failing under the pressures of the economy and which are thriving and use that information to decide where to put your money to work in order to acquire the highest level of security for savers and the greatest return for the investors. But in a system that covers for the indiscretions of those who can collapse the economy overnight, the investor knows not who is running his financial institution into the ground nor who is safely growing his balance sheet in a healthy fashion. Instead the ‘inside banker buddy system’ provides unlimited 0% interest loans on command at tax payer expense and then those very financial institutions who begged for the money to keep the lights on decide whether or not they want to loan your tax money back to you to keep your small business open and your loyal employees working so they can provide for their families. Bit ironic huh?

If you have not put all of this together yet, you need to admit to yourself that this is yet another good ole boy network and you aren’t in it. Once you admit to yourself that these bankers, as a result of their insatiable hunger for the almighty profit, have run their banks (where you keep your life savings and monthly bill pay money) into the ground and have been begging to borrow trillions of dollars in your tax dollars (before they are collected) in order to pad their balance sheets and guarantee their billion dollar bonuses get paid to them, you can accept the depth of the current crisis and begin to prepare for the next cataclysmic shift that will implode many of these very banks. This next wave of collapsing banks will send a panic through the world markets like never seen before and it will progress so wildly that there will be NO TIME to take a break at work to read 20 articles on the crisis to afford you the insight to make the proper moves to protect your retirement investments. Those who are buried in IRA’s & 401K’s will be stuck in quicksand with no solution and wish they had heeded the warnings read here. Those who have internet self directed trading accounts will more than likely face an MF Global type scenario where the Wall Street boys got a heads up first and exercised an internal bank run before the news hit the wire assuring they get their monies out leaving you holding the bag. All investors need to own physical gold & silver as SGM Metals offers, whether held safely in segregated vault accounts with title in your hands or sent home to you to be stored at home. Either way the FED’s fiat money scheme will soon come to an end. In January we could see the first wave of the next collapse once we see all the Christmas sales squeezed out of the broke public and there is a vacuum from the lack of transactions that always manifests in the wake of the holidays. Buy your physical gold and silver insurance policy now and take comfort in knowing that you have opted to remove yourself from the inside game that Wall Street makes and breaks the rules for as they go and the Congress turns a blind eye while they multiply their net worth’s exponentially from the inside knowledge of these very improprieties.

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SGM Metals strives to offer not only wealth preservation precious metals investments to offset weakness in the economy, but to help educate our family of clients to better identify the threats to their financial security.