Liberty MavenAlan Grayson grills Ben Bernanke on Foreign Lending
July 21st, 2009 1:51 pm | by Marc Gallagher | Published in Bailouts, Banking, Big Government, Constitution, Debt, Economics, Federal Reserve, Money, globalism, government spending, inflation | 17 Responses
Alan Grayson, a Florida Democrat who has been very critical in the past of Fed actions takes it to Bernanke today regarding foreign central bank lending. If the 90 or so Democratic cosponsors of Ron Paul’s HR1207 bill doesn’t convince you that Fed transparency is bipartisan then Grayson’s grilling of Bernanke should.
What I find especially horrid about this is that the U.S. is bankrupt and the Fed is not only printing money and handing it out to U.S. financial institutions, but is handing it out to foreign central banks so they can hand it out to their own financial institutions. Meanwhile the value of the dollar takes more of a hit exacerbating the “hidden” inflation tax on every person in the world who holds dollars.
July 21st, 2009 at 2:22 pm (#)
[...] convince you that Fed transparency is bipartisan then Grayson’s grilling of Bernanke should.(more-original link) ? [...]
July 21st, 2009 at 10:08 pm (#)
This wasn't foreign lending; this was a currency swap. Central banks received US dollars; we received, Euros, Pounds, etc. Think of a spousal swap, and you may understand it a little better.
July 21st, 2009 at 10:37 pm (#)
Well if it wasn't foreign lending then why did the total amount of money increase by half a trillion $?
The Fed printed the money and then lent it to foreign central banks. Bernanke himself says that they "are lending to central banks". And how does receiving Euro's or some other currency in return help the value of the dollar when the Fed printed the money to "swap"?
-Marc
July 21st, 2009 at 7:46 pm (#)
[...] Alan Grayson grills Ben Bernanke on Foreign Lending [...]
July 22nd, 2009 at 1:55 am (#)
Alan Grayson is my new emerging hero. This is the second time he has completely tripped up The Fed and shown how they don't have a clue about even what they are doing. And this time it's Bernanke! Did you see the look of fear in his eyes? Go, Grayson!
July 22nd, 2009 at 6:03 am (#)
[...] Alan Grayson grills Ben Bernanke on Foreign Lending source: Marc Gallagher [...]
July 22nd, 2009 at 7:08 am (#)
[...] 22, 2009 · Leave a Comment Marc Gallagher Liberty Maven July 21, [...]
July 22nd, 2009 at 7:15 am (#)
Alan Grayson grills Ben Bernanke on Foreign Lending …
By Marc Gallagher
Liberty Maven | Alan Grayson, a Florida Democrat who has been very critical in the past of Fed actions takes it to Bernanke today regarding foreign central bank lending. If the 90 or so Democratic cosponsors of Ron Paul’s HR1207 b…
July 23rd, 2009 at 6:12 pm (#)
[...] was some good discussion on the subject, and I enjoy reading the posts and the [...]
July 24th, 2009 at 12:38 am (#)
I'm trying to keep this simple. This is a currency swap. I'm not defending Bernanke – he should have answered those questions far better. But people need to understand the facts.
To answer some of your questions, I recommend reading:
http://www.nakedcapitalism.com/2009/07/guest-post...
and
http://economistsview.typepad.com/economistsview/...
and
http://www.econbrowser.com/archives/2009/07/looki...
July 24th, 2009 at 2:43 am (#)
Bob,
Thanks for the links for clarification. Appreciate it.
-Marc
July 24th, 2009 at 5:11 am (#)
Bernanke lied when he said that these loans didn't cost AMericans anything. If interest were allowed to rise, the money we have in savings would earn more. Printing money and loaning it out, keeping the interest themselves, does indeed cost Americans something.
July 24th, 2009 at 1:48 pm (#)
It's pretty sad that Bob understands it and can articulate it, but the Chairman of the Federal Reserve does not. He didn't even know how or when The Fed was created… OR which central banks in Europe the funds went to. These guys are lost. No wonder they don't want TRUE audits.
July 24th, 2009 at 10:00 pm (#)
[...] was some good discussion on the subject, and I enjoy reading the posts and the [...]
July 25th, 2009 at 11:52 pm (#)
did the fed take currency off the market for the swap? OF COURSE NOT. The fed created money with a balance sheet entry and then used that cash for the swap. After the swap expires, the money will be destroyed.
July 27th, 2009 at 3:13 pm (#)
Not lending, but a swap? Pretty flimsy semantics, even using the Fed's own explanations.
http://www.federalreserve.gov/monetarypolicy/bst_...
The Fed provides a "swap line" to foreign banks, who "draw" on that line to acquire dollars, with a contractual agreement to "buy back" their own currency at a later date certain at a rate certain. This has all the trappings of a "loan," with none of the regulation.
Given that the Federal Reserve — i.e., our money — will take a sharp hit if "Central Bank A" cannot, for whatever reason, buy back its currency at the target date, wouldn't we expect the Fed Chairman (or its IG) to know with something more acute than "banks" exactly where the dollar credit line went?
July 31st, 2009 at 10:08 pm (#)
Everyone should do a bit more research before commenting on this. Grayson is a fool. He appears to trip up Bernanke because his question is so economically stupid that it doesn't make sense. There is ZERO possibility that Bernanke would know which banks receive loans…our Fed provides credit to their Central Bank…and from there it is their issue, not ours. Also, the New Zealand comment is pure idiocy. The Fed extended CREDIT to NZ, not a loan…the equivalent to the available credit on one's credit card. NZ has never, ever drawn a penny on this available credit…the question is stupid. Unfortunately, good people are drawn to moronic legislators who don't have a clue what they're talking about. If the soundbite is good, then it must be true. C'mon folks, do some research and understand the facts.