Bernanke's Financial Rescue Plan: The growing prospect of a U.S. default | WHAT REALLY HAPPENED

Bernanke's Financial Rescue Plan: The growing prospect of a U.S. default

Fed chief Ben Bernanke has embarked on the most radical and ruinous financial rescue plan in history. According to Bloomberg News, the Fed has already lent or committed $12.8 trillion trying to stabilize the financial system after the the bursting of Wall Street's speculative mega-bubble. Now Bernanke wants to dig an even bigger hole, by creating programs that will provide up to $2 trillion of credit to financial institutions that purchase toxic assets from banks or securities backed by consumer loans. The Fed's generous terms are expected to generate a flurry of speculation which will help strengthen the banking system while leaving the taxpayer to bear the losses. It is impossible to know what the long-term effects of Bernanke's excessive spending will be, but his plan has the potential to trigger hyperinflation or spark a run on the dollar.

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And with the loosening of restrictions on Mark-to-market accounting, banks will have a free-for-all wildly inflating the value of the toxic assets, dumping them for pennies, then getting a check for 85% of the "loss" courtesy of the US taxpayer.

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