Power of Story Send a Tweet        

Share on Google Plus Share on Twitter Share on Facebook Share on LinkedIn Share on PInterest Share on Fark! Share on Reddit Share on StumbleUpon Tell A Friend 11 (11 Shares)  

Printer Friendly Page Save As Favorite View Favorites (# of views)   2 comments
Exclusive to OpEdNews:
OpEdNews Op Eds

Reverse bank robbery – how the big banks are robbing us blind

By   Follow Me on Twitter     Message Richard Clark       (Page 1 of 3 pages)     Permalink

Related Topic(s): ; ; ; , Add Tags  Add to My Group(s)

Must Read 2   Well Said 1   Valuable 1  
View Ratings | Rate It

opednews.com Headlined to H2 9/7/09

Author 8235
Become a Fan
  (110 fans)
- Advertisement -

(Using laymen's language, what follows here is a simplified version of an article by economist Dean Baker at http://www.guardian.co.uk/commentisfree/cifamerica/2009/aug/31/banking-profits-us-economy

- Advertisement -

Even that giant corpse Citigroup is showing signs of life. But how could that be? Answer: Our government is using our money to pick up Citigroup's bad debts and is paying them a nice profit for the "privilege."

- Advertisement -

Here's how it works: We (through our government) lend big banks the money that they then lend back to us, albeit at a considerably higher interest rate than the rate that we (through our government) charge them for what we loaned them.

To use simple round numbers, let's say that the big banks have borrowed $1 trillion from the Fed's various lending facilities. (Actually, the Fed's total loans to the banks now exceed $2 trillion.)

- Advertisement -

Now suppose the banks pay an average interest rate of 0.2% for this rounded off trillion dollars that they've borrowed. If the banks then use that trillion to buy up government bonds that pay a 3.5% interest rate, they can pocket the difference of 3.3 percentage points. This means that on a trillion dollars of federal lending to them, the banks will 'earn' $33 billion a year in net interest or profit! Essentially, this is the extra money that our government is paying the banks so that we can borrow back the money that we lent them through our Fed. In other words, we taxpayers are essentially giving banks like Citigroup many billions every year through crazy schemes like this. And the big banks are referring to these giveaway billions as 'earnings'!

Next Page  1  |  2  |  3


- Advertisement -

Must Read 2   Well Said 1   Valuable 1  
View Ratings | Rate It


Several years after receiving my M.A. in social science (interdisciplinary studies) I was an instructor at S.F. State University for a year, but then went back to designing automated machinery, and then tech writing, in Silicon Valley. I've (more...)

Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon Share Author on Social Media   Go To Commenting

The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Follow Me on Twitter

Writers Guidelines

Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
- Advertisement -

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Was Pat Tillman Murdered by an American Sharpshooter to Shut Him up?

New JFK assassination bombshells

Two U.S. presidents implicated by ex-CIA black-ops assassin

The cholesterol - heart disease scam: How the medical-industrial complex is raking in billions at our expense

Four Ticking Time Bombs That Will Soon Ignite a Revolution

The Ultimate Goal of the Bankster-led Political-economic Warfare Being Waged Against Us Is . . . ?