> On Dec 28, 2009, at 1:26 AM, dredmond at efn.org wrote:
>
>> TARP was the tip of the rentier subsidy iceberg. True cost of the
>> bailout:
>> $14 trillion (Nomi Prins, bless her soul, has the gory details:
>> http://www.nomiprins.com/bailout.html).
>>
>
> An awful lot of that total is Federal Reserve magic money -
> guarantees, supports, facilities, etc. etc.
It's as real as any financial instrument, which is always a promise to repay. The problem is, we don't really know what toxic assets the Fed has taken on its books in exchange for this largesse to the banksters. The final bill to the taxpayer may be $1 trillion, or it may be $3 trillion, we really don't know. (I'd note Prins' list excludes the assets of Fannie Mae and Freddie Mac, which are still running big losses, though eventually they may turn a profit for the taxpayer).
The EU openly took over huge chunks of the banking system during its bailout, so EU taxpayers will get most of their money back once good times return. By contrast, Bananamerica's bailout-by-alphabet-soup is a perfect way to extract huge amounts of cash in devious ways from the taxpayer, with zero supervision or clawbacks. It's like the Chubais privatizations of 1995, when the Russian oligarchs stole billions in state assets, only on a far vaster scale.
I recall Congress tried to get some concrete numbers from the Fed, and was swatted aside like a fly.
-- DRR