90% of QE2 went to bailing out foreign banks. The truth comes out.

Discussion in 'Economy' started by Liberty, Jun 12, 2011.

  1. Liberty
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    Liberty Silver Member

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  2. Liberty
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    Liberty Silver Member

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    no lefties have any retorts on this? lulz.
     
  3. CrusaderFrank
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    CrusaderFrank Diamond Member

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    In any educated country, the Fed would be audited then burned to the ground while its directors were tried before a military tribunal for treason
     
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  4. uscitizen
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    uscitizen Senior Member

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    Our banks are mostly controlled by foreign interests?
    Not a suprise to me.
     
  5. Epsilon Delta
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    Epsilon Delta Jedi Master

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    Welcome to the Third World, guys. Plastic cups and beer are out back.

    Please sit down and enjoy the salsa. :)
     
  6. Liberty
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    Liberty Silver Member

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    when you put it that way, it doesn't seem too bad. :)
     
  7. editec
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    editec Mr. Forgot-it-All

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    I don't know about your numbers, but here's WHY money went to foreign banks....

    BECAUSE THOSE BANKS WERE HOLDING DEBT INSTRUMENTS ISSUED BY AMERICAN BANKS.


    Now if your complaint is that the US taxpayer ought not to have stoood behind ANY debt issued by PRIVATE BANKS, and that the people who bought those debt instruments ought to have taken the loss, instead of the US taxpayer taking on that debt?

    I quite agree.
     
  8. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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    Please provide some evidence that QE2 was used to compensate foreign banks for holding U.S. debt instruments.
     
  9. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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    editec won't find any evidence because the real use of QE2 has been to forestall the cratering of the EU as the PIGS economies unravel:

    That's right, out of 20 Primary Dealers, 12 are.... foreign. And incidentally, the reason why we added the (if any) above, is that since this cash is fungible between on and off-shore operations, what happened is that the $600 billion in cash was promptly repatriated and used by domestic branches of foreign banks to fill undercapitalization voids left by exposure to insolvent European PIIGS and for all other bankruptcy-related capital needs. And one wonders why suddenly German banks are so willing to take haircuts on Greek bonds: it is simply because courtesy of their US based branches which have been getting the bulk of the Fed's dollars in 1 and 0 format, they suddenly find themselves willing and ready to face the mark to market on Greek debt from par to 50 cents on the dollar. And not only Greek, but all other PIIGS, which will inevitably happen once Greece goes bankrupt, either volutnarily or otherwise. In fact, the $600 billion in cash that was repatriated to Europe will mean that European banks likely are fully covered to face the capitalization shortfall that will occur once Portugal, Ireland, Greece, Spain and possibly Italy are forced to face the inevitable Event of Default that will see their bonds marked down anywhere between 20% and 60%.
     
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  10. Toddsterpatriot
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    Toddsterpatriot Gold Member

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    Trading low yielding reserves for low yielding Treasuries is a stealth bailout?
    And how does that hurt the domestic economy?
     

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