Busted: Bankers and The Global Economy

April 27, 2008

U.S.: Bailout Debt Grows Larger

The Federal Reserve recently issued their miracle chart showing very little of real meaning. The gray areas are times of documented recession. You will notice that even though the United States is in a recession, the recession is not noted except by the huge pileup of bank debt. I would suppose that the Federal Reserve and the U.S. Treasury are still debating when they want official recession to begin.

Banks are borrowing unprecedented amounts of money to keep themselves afloat from bad securitized bonds a/k/a the mortgage crisis debacle. The Fed, being the kind grandfather, has not recommended or mandated that banks stop generating perverted securitized bonds, but simply suggests that more care be used. Let’s face the facts friends: the U.S. banking industry is hopelessly frozen from tons of worthless bonds that will have to be written off sooner or later. The Federal Reserve and U.S. banks are playing a game of chess in the hope of postponing the inevitable sudden pain that must come. The goal is to stretch to the current position through the election so that the election is not adversely influenced. The bailout debt is so much larger than this chart shows. Happily for the Fed, the huge bailout totals are off the books because they are temporary loans and don’t show here.

Politicians and bankers are praying for a financial miracle. Could an “escape hatch plan” be in the works?

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