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Author Topic: "Half a trillion dollars and you don't know who got the money?"  (Read 1165 times)

MDM,

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This borders on comedy  Laughing


Grayson: "So who got the money?"
Bernanke: "Financial institutions in Europe and other counries."
Grayson: "Which ones?"
Bernanke: "I don't know."
Gryson: "Half a trillion dollars and you don't know who got the money?"

It gets even better.

3:02 -
Grayson: "Well, look at the next page [in Bernanke's written report], the very next page has the U.S. dollar nominal exchange rate, which shows a 20 percent increase in the U.S. dollar nominal exchange rate at exactly the same time that you were handing out half a trillion dollars. You think that's a coincidence?"
Bernanke: "Yes."
Grayson: "hah-hah-hah-hah!"


http://www.youtube.com/watch?v=DOXwTdCxRDk


nice comment from youtuber:

"IF YOU WANT TO REMAIN SLAVES TO THE BANKERS AND PAY FOR THE COSTS OF YOUR OWN SLAVERY, LET THEM CONTINUE TO CREATE MONEY AND CONTROL THE NATIONS CREDIT." -Thomas Jefferson (1743-1826)
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I must study politics and war that my sons may have liberty to study mathematics and philosophy .. in order to give their children a right to study painting, poetry and music.
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Jon Hodgson

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Re: "Half a trillion dollars and you don't know who got the money?"
« Reply #1 on: July 28, 2009, 11:26:07 am »

MDM, wrote on Tue, 28 July 2009 16:02

This borders on comedy  Laughing


Grayson: "So who got the money?"
Bernanke: "Financial institutions in Europe and other counries."
Grayson: "Which ones?"
Bernanke: "I don't know."
Gryson: "Half a trillion dollars and you don't know who got the money?"


Why should he be expected to know?

The Fed knows who they lent the money to, 14 Central Banks, as he states in the video, they don't know "who got the money", because they don't know who those banks then lent the money to.

That's pretty clear from the testimony given.

They don't have access to that information, and likewise they would not give that information to other central banks if the situation were reversed... if they did Congress would be up in arms I'm sure.

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MDM,

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Re: "Half a trillion dollars and you don't know who got the money?"
« Reply #2 on: July 28, 2009, 12:15:11 pm »

You're right Jon..

Bernanke doesn't REALLY know much, as the past has shown:

http://www.youtube.com/watch?v=HQ79Pt2GNJo

The fact that he's intelligent, schooled, and the CHAIRMAN of the Fed Reserve SHOULD mean he actually follows his own work, understands what he's doing and says things which are based on truth..

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I must study politics and war that my sons may have liberty to study mathematics and philosophy .. in order to give their children a right to study painting, poetry and music.
John Adams (1735-1826) 2nd President, United States

PookyNMR

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Re: "Half a trillion dollars and you don't know who got the money?"
« Reply #3 on: July 28, 2009, 12:28:42 pm »

Jon Hodgson wrote on Tue, 28 July 2009 09:26


Why should he be expected to know?

The Fed knows who they lent the money to, 14 Central Banks, as he states in the video, they don't know "who got the money", because they don't know who those banks then lent the money to.

That's pretty clear from the testimony given.

They don't have access to that information, and likewise they would not give that information to other central banks if the situation were reversed... if they did Congress would be up in arms I'm sure.




If Bernanke were your personal portfolio manger, would you want to know where your money has been invested?

Would you be satisfied just to hear that your portfolio was given over to some mutual fund company with no disclosure of that companies holdings and strategies?

I think if your portfolio manager treated you like Bernanke is treating us, you'd go to the securities board to have is license revoked and have him brought up on charges.

There's no excuse to so quickly lose track of half a trillion dollars.

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Nathan Rousu

Jon Hodgson

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Re: "Half a trillion dollars and you don't know who got the money?"
« Reply #4 on: July 28, 2009, 12:53:35 pm »

MDM, wrote on Tue, 28 July 2009 17:15

You're right Jon..

Bernanke doesn't REALLY know much, as the past has shown:

http://www.youtube.com/watch?v=HQ79Pt2GNJo

The fact that he's intelligent, schooled, and the CHAIRMAN of the Fed Reserve SHOULD mean he actually follows his own work, understands what he's doing and says things which are based on truth..




What I'm saying Max, is that he has never had that information, and should not be expected to have it.

The Fed lent to other Centrsl banks, they know which centrsl banks, and they know how much. They don't know the details of what those central banks then did with the money. They're not interested in knowing, it doesn't figure in their decisions, and anyway, the central banks wouldn't tell them if they asked.

The Fed's job is not to decide whether VW or BMW should be allowed to have dollars from the Bundesbank, their job is to see that there's a demand for dollars and decide if them lending to the Bundesbank is better for their own aims than allowing demand on the open market to drive interest rates up.

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Jon Hodgson

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Re: "Half a trillion dollars and you don't know who got the money?"
« Reply #5 on: July 28, 2009, 12:58:20 pm »

PookyNMR wrote on Tue, 28 July 2009 17:28

Jon Hodgson wrote on Tue, 28 July 2009 09:26


Why should he be expected to know?

The Fed knows who they lent the money to, 14 Central Banks, as he states in the video, they don't know "who got the money", because they don't know who those banks then lent the money to.

That's pretty clear from the testimony given.

They don't have access to that information, and likewise they would not give that information to other central banks if the situation were reversed... if they did Congress would be up in arms I'm sure.




If Bernanke were your personal portfolio manger, would you want to know where your money has been invested?

Would you be satisfied just to hear that your portfolio was given over to some mutual fund company with no disclosure of that companies holdings and strategies?

I think if your portfolio manager treated you like Bernanke is treating us, you'd go to the securities board to have is license revoked and have him brought up on charges.

There's no excuse to so quickly lose track of half a trillion dollars.




The Fed lent to other Central Banks, that's who owes the Fed (and thus the US taxpayer) the money, Bernanke has that information.

What he doesn't have is the details of who those Central Banks lent to, but those entities don't owe the Fed a penny, they owe money to their Central Banks.

If your portfolio manager bought Treasury Securities, would you demand to know what the government was spending the money on?
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Jon Hodgson

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Re: "Half a trillion dollars and you don't know who got the money?"
« Reply #6 on: July 28, 2009, 01:25:05 pm »

The outstanding figure is now 89.5 billion, down from 500 +  billion at the start of the year, it doesn't seem possible to say exactly how much it was at the start of the year because the Fed's publically published accounts grouped liquidity swaps under "other assets" until the end of January, congress it seems had more detailed accounts, as might be expected.

However, looking at how "other assets" changed (or rather didn't) just after the liquidity swap figure was seperated, it seems reasonable to estimate that the figure was probably in the region of 580 billion at the beginning of January, in which case it's dropped by about 85% since then.

These loans are short term (overnight to 3 months), and the foreign central banks pledge their own currency.

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MagnetoSound

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Re: "Half a trillion dollars and you don't know who got the money?"
« Reply #7 on: July 28, 2009, 09:05:15 pm »


Somehow it just seems so remarkably apt ...

http://www.youtube.com/watch?v=1HnGNuj9RL0&fmt=18


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PookyNMR

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Re: "Half a trillion dollars and you don't know who got the money?"
« Reply #8 on: July 29, 2009, 01:12:39 pm »

Jon Hodgson wrote on Tue, 28 July 2009 10:58

PookyNMR wrote on Tue, 28 July 2009 17:28

Jon Hodgson wrote on Tue, 28 July 2009 09:26


Why should he be expected to know?

The Fed knows who they lent the money to, 14 Central Banks, as he states in the video, they don't know "who got the money", because they don't know who those banks then lent the money to.

That's pretty clear from the testimony given.

They don't have access to that information, and likewise they would not give that information to other central banks if the situation were reversed... if they did Congress would be up in arms I'm sure.




If Bernanke were your personal portfolio manger, would you want to know where your money has been invested?

Would you be satisfied just to hear that your portfolio was given over to some mutual fund company with no disclosure of that companies holdings and strategies?

I think if your portfolio manager treated you like Bernanke is treating us, you'd go to the securities board to have is license revoked and have him brought up on charges.

There's no excuse to so quickly lose track of half a trillion dollars.




The Fed lent to other Central Banks, that's who owes the Fed (and thus the US taxpayer) the money, Bernanke has that information.

What he doesn't have is the details of who those Central Banks lent to, but those entities don't owe the Fed a penny, they owe money to their Central Banks.

If your portfolio manager bought Treasury Securities, would you demand to know what the government was spending the money on?



If my portfolio manager bought Treasury Securities, I'd expect that he knows the general positions and obligations attached.  Partly why the Chinese laughed Geithner - they knew the positions and obligations behind US securities.

We don't need every last bloody detail, but some sort of clue as to generally where the funds are going is prudent.  I don't know of any prudent manager that blindly invests without some reasonable idea of where the funds are going.
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Nathan Rousu

Jon Hodgson

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Re: "Half a trillion dollars and you don't know who got the money?"
« Reply #9 on: July 29, 2009, 03:39:20 pm »

PookyNMR wrote on Wed, 29 July 2009 18:12

Jon Hodgson wrote on Tue, 28 July 2009 10:58

PookyNMR wrote on Tue, 28 July 2009 17:28

Jon Hodgson wrote on Tue, 28 July 2009 09:26


Why should he be expected to know?

The Fed knows who they lent the money to, 14 Central Banks, as he states in the video, they don't know "who got the money", because they don't know who those banks then lent the money to.

That's pretty clear from the testimony given.

They don't have access to that information, and likewise they would not give that information to other central banks if the situation were reversed... if they did Congress would be up in arms I'm sure.




If Bernanke were your personal portfolio manger, would you want to know where your money has been invested?

Would you be satisfied just to hear that your portfolio was given over to some mutual fund company with no disclosure of that companies holdings and strategies?

I think if your portfolio manager treated you like Bernanke is treating us, you'd go to the securities board to have is license revoked and have him brought up on charges.

There's no excuse to so quickly lose track of half a trillion dollars.




The Fed lent to other Central Banks, that's who owes the Fed (and thus the US taxpayer) the money, Bernanke has that information.

What he doesn't have is the details of who those Central Banks lent to, but those entities don't owe the Fed a penny, they owe money to their Central Banks.

If your portfolio manager bought Treasury Securities, would you demand to know what the government was spending the money on?



If my portfolio manager bought Treasury Securities, I'd expect that he knows the general positions and obligations attached.  Partly why the Chinese laughed Geithner - they knew the positions and obligations behind US securities.

We don't need every last bloody detail, but some sort of clue as to generally where the funds are going is prudent.  I don't know of any prudent manager that blindly invests without some reasonable idea of where the funds are going.


Not only are the loans guaranteed by the central banks they are made to (and therefore by the governments of the countries) but the receiving central banks pledge a matching amount of their own currency as collatoral, unless that currency tanks (and remember these are short term loans, which limits how far they could tank in the worst case), then they're not high risk loans.


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Jon Hodgson

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Re: "Half a trillion dollars and you don't know who got the money?"
« Reply #10 on: July 29, 2009, 03:44:01 pm »

Quote:

Which central banks can currently engage in swaps?
The Federal Reserve has established swap arrangements with the Reserve Bank of Australia, the Banco Central do Brasil, the Bank of Canada, Danmarks Nationalbank, the Bank of England, the European Central Bank, the Bank of Japan, the Bank of Korea, the Banco de Mexico, the Reserve Bank of New Zealand, the Norges Bank, the Monetary Authority of Singapore, the Sveriges Riksbank, and the Swiss National Bank.


Are you REALLY worried that any of those is not going to pay back the loans?

Well stop worrying, because they've given you just as much money in return..

Quote:

How are the swaps structured?
The Federal Reserve provides U.S. dollars to a foreign central bank. At the same time, the foreign central bank provides the equivalent amount of funds in its currency to the Federal Reserve, based on the market exchange rate at the time of the transaction. The parties agree to swap back these quantities of their two currencies at a specified date in the future, which may be the next day or as far ahead as three months, using the same exchange rate as in the first transaction. Because the terms of this second transaction are set in advance, fluctuations in exchange rates during the interim do not alter the eventual payments. As such, these swap operations carry no exchange rate or other market risks.
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MDM,

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Re: "Half a trillion dollars and you don't know who got the money?"
« Reply #11 on: August 05, 2009, 10:33:07 am »

here's more 'missing' money...1 trillion

http://www.youtube.com/watch?v=gpqkNsbSINA
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I must study politics and war that my sons may have liberty to study mathematics and philosophy .. in order to give their children a right to study painting, poetry and music.
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Jon Hodgson

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Re: "Half a trillion dollars and you don't know who got the money?"
« Reply #12 on: August 05, 2009, 11:13:31 am »

MDM, wrote on Wed, 05 August 2009 15:33

here's more 'missing' money...1 trillion

http://www.youtube.com/watch?v=gpqkNsbSINA


Is it just me that's getting no listenable audio from that clip?

As for more "missing" money, well the first lot isn't missing in any way. Not only do they know exactly who owes them dollars and when (all from central banks with a pretty good credit rating), but they are liquidity SWAPS, which means that for the duration of the deal, the foreign central bank deposits an equivalent amount of their currency at the fed, in other words the fed is never out of pocket, it simply has Euros (or pounds, or Krona or whatever) instead of dollars.

I'm not sure if Alan Grayson doesn't understand how things work (he should read a little more if he doesn't), or if he does and is just trying to score political points with the large mass of people who seem incapable of actually reading beyond the headlines, but either way he's not impressing me.
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MDM,

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Re: "Half a trillion dollars and you don't know who got the money?"
« Reply #13 on: August 05, 2009, 01:33:04 pm »

the sound is out of phase from how I hear it  on my laptop.

what's happening probably is that you're listening in mono and you hear no audio.

youtube behaves 'oddly' sometimes.

the lady in the video says that although it's her job and they've had 8 months to research a 'missing' trillion dollars, she doesn't know who the Fed gave it to, and that they 'are working on getting that information'

so I don't think what you mention applies, Jon.
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I must study politics and war that my sons may have liberty to study mathematics and philosophy .. in order to give their children a right to study painting, poetry and music.
John Adams (1735-1826) 2nd President, United States

Jon Hodgson

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Re: "Half a trillion dollars and you don't know who got the money?"
« Reply #14 on: August 05, 2009, 02:42:02 pm »

MDM, wrote on Wed, 05 August 2009 18:33

the sound is out of phase from how I hear it  on my laptop.

what's happening probably is that you're listening in mono and you hear no audio.

youtube behaves 'oddly' sometimes.

the lady in the video says that although it's her job and they've had 8 months to research a 'missing' trillion dollars, she doesn't know who the Fed gave it to, and that they 'are working on getting that information'

so I don't think what you mention applies, Jon.


Ok, it works on headphones, but very noisy...

The first thing he asks is about Lehmann brothers, well that's already been answered by Bernanke in a previous interview as I recall.

Then he's talking about a trillion dollar expansion in the balance sheet, what you're referring to as a "missing" trillion.
If you look at the balance sheets for the period (I know you hate actually looking at facts and figures, but the man's going on about the balance sheet so let's look at the balance sheet) he's talking about (you hear him say "since last september" and "8 months", from which we can deduce that we're talking about september 2008 to may 2009), we do indeed find an expansion of the balance sheet of around a trillion.

A big chunk of that was the aforementioned liquidity swaps, still around a quarter of a trillion at that time, a couple of hundred billion extra in treasury securities, notes and bonds, term auction credit up by 300 billion, mortgage backed securities up 450 billion, "other loans" down by 130 billion though, and some other bits and pieces.

Big scary numbers, but none of it "missing", any more than the money in liquidity swaps is "missing".



He then starts talking about a Bloomberg report of "Off the book transactions", from what I can find out he's talking about this article  http://www.bloomberg.com/apps/news?pid=washingtonstory&s id=aGq2B3XeGKok

Which doesn't say what he appears to either think or be implying it does. It refers to money already spent or lent (on ON the books) and further commitments by the government (Treasury and Fed), money that has not yet been used and is not off the books.
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