Ugly truth of QE2 exposed at Zero Hedge ~ the $600 billion went to foreign banks

[Vividity]

Perhaps ZH's most important exposé ever, this is major:

http://www.zerohedge.com/article/exclusive-feds-600-billion-stealth-bailout-foreign-banks-continues-expense-domestic-economy-

[Flash]

It would be nice, Vividity to give us a small resume of what the article is about. THere is a lot of posts and not much time to read them all. We, at least I, pick and chose often based on the small resume given. If you think the article is a must read, then give us a resume so that we pick it.

Thanks

[bennycog]

From the website above :

"Courtesy of the recently declassified Fed discount window documents, we now know that the biggest beneficiaries of the Fed's generosity during the peak of the credit crisis were foreign banks, among which Belgium's Dexia was the most troubled, and thus most lent to, bank. Having been thus exposed, many speculated that going forward the US central bank would primarily focus its "rescue" efforts on US banks, not US-based (or local branches) of foreign (read European) banks: after all that's what the ECB is for, while the Fed's role is to stimulate US employment and to keep US inflation modest. And furthermore, should the ECB need to bail out its banks, it could simply do what the Fed does, and monetize debt, thus boosting its assets, while concurrently expanding its excess reserves thus generating fungible capital which would go to European banks. Wrong. Below we present that not only has the Fed's bailout of foreign banks not terminated with the drop in discount window borrowings or the unwind of the Primary Dealer Credit Facility, but that the only beneficiary of the reserves generated were US-based branches of foreign banks (which in turn turned around and funnelled the cash back to their domestic branches), a shocking finding which explains not only why US banks have been unwilling and, far more importantly, unable to lend out these reserves, but that anyone retaining hopes that with the end of QE2 the reserves that hypothetically had been accumulated at US banks would be flipped to purchase Treasurys, has been dead wrong, therefore making the case for QE3 a done deal. In summary, instead of doing everything in its power to stimulate reserve, and thus cash, accumulation at domestic (US) banks which would in turn encourage lending to US borrowers, the Fed has been conducting yet another stealthy foreign bank rescue operation, which rerouted $600 billion in capital from potential borrowers to insolvent foreign financial institutions in the past 7 months. QE2 was nothing more (or less) than another European bank rescue operation! "

[Flash]

Thank you very much Bennycog for the resume. Now I find it quite interesting.

My question, why the Rockerfeller US based group would have saved the European based Rotchild group? What went on to make the Rockerfeller lose the overall power? Why was America so necessary to put down on its knees?

Now I will read the swhole article, thanks.

[bennycog]

the only summary there is they have always worked together.. covertly..

[Vividity]

@ Flash, I thought the title alone would turn heads, sorry, next time I'll put together a synopsis

Interesting perspective from ZH reader 'Coke & Hookers' in the comments section:

"There are two things going on here.

1) The Fed is NOT lending to small banks, thus starving the US economy of credit.

2) The Fed is lending to big Euro banks, which seems strange but isn't.

Let's look at what this might actually mean.

1) Small US banks and the Fed: How many small US banks have been closed since the crash? Anybody have that number? The answer is 405 according to the FDIC failed bank list. How many big Wall Street banks have been closed? Well, Lehman maybe but it got absorbed by other banks. Let's ask ourselves a question: Were the small banks worse off than the big Wall Street banks? Probably not. I think the crisis was simply used as an opportunity for a massive consolidation program. Banks competing against the Wall Street/Fed cabal were simply slaughtered to remove competition. So why the hell would the Fed lend to what's left of non-Wall Street banks now? It makes no sense. Wall Street and the Fed WANT ALL OF THESE BANKS GONE and they are not going to to anything to help them out.

2) Euro banks and the Fed: How do the people who run the show in international finance see things? They don't see things from national perspective. All these people look at finance from a global perspective. They don't give a **** about anything else than saving the system. If Euro banks go down, Wall Street will go down too. From a global perspective, it makes perfect sense for the Fed to lend to Euro banks because they don't see any distinction between Wall Street banks and big Euro banks. The 'country' the Fed is out to protect is the international (mainly western) financial system, not the US or individual Euro countries. For the Fed it's 'us vs them' - 'us' being the western financial system and 'them' being the serfs having all their assets looted (that's us folks).

There is no US or Euro financial systems anymore. There's only one system now and the people with the easiest access to the digital printing presses (and the serfs' wallets) are tasked with the bailouts - and that happens to be the Fed. The ECB and the Eurozone central banks have done their part too. They are devaluing the Euro like there's no tomorrow - and the devaluation is for some magical reason enough to keep pace with the decline of the dollar. What do you think would have already happened to the dollar if they had shown fiscal responsibility?

This whole thing makes total sense if we look at the world from their perspective."

[Flash]

vividity, You are entirely right, this is a global system now, not regional one (meaning based on countries). why is that that Canadian banks were so resistant. Why was it planned that way then? Where do we play in the chess game, even if we are globally very small?

And will the American people ever realised what happened under their nose, that their power is actually lost for their own auto-management?