Backontrack and the rest of you. You guys need this to be explained to you in layman's terms to avoid further embarrassment.
The intent of this action(Lend $500 bil to foreign central banks) by the US fed was to free up the global credit markets when it was in a credit crunch and to prevent a total global meltdown. This was covered intensively by the media at the time.
The 14 central banks that received this money then lent it out to the commercial banks in their respected countries, which could possibly run into the thousands. These commercial banks have no responsibility to the US fed bank. Their only responsibility is to pay back the central bank they lent the money from in their respected countries. The US Fed Bank has no authority over these commercial banks, nor can it redeem its borrowed money from them directly. Its the 14 central banks who are responsible to pay back the $500bil.
Therefore Ben Bernanke cannot be expected nor needs to know where the money ultimately ended up. He only needs to know the 14 foreign central banks that the money was lent to which he stated is documented in the documents in front of him. Its like getting the Ford CEO up there and asking him who bought your cars. He'll know that it would be documented which dealers bought how many but Ford wouldn't have a clue who bought them of the dealers.
This lending by the US Fed Bank to the foreign central banks as stated in the video is a long standing authority and has been used many times over the years.
"The USA has been fleeced" "$500,000,000,000 given away"
So comments like the above is grossly inaccurate.... Nothing was stolen. Nothing was given away. The US central bank simply lent money to overseas central banks that will eventually pay it back with interest to avoid a economic catastrophe.
I also don't agree Alan Grayson had anything over Ben Bernanke. Bernanke explained it clear enough. In fact Grayson in the eyes of people who have a little understanding of monetary policy made a fool out of himself. His comment on it "wouldn't it have been better to extend th credit to US citizens then New Zealanders" was missing the point and ignorant. The whole aim for the US Fed Bank was to free up the GLOBAL economy to because it was a GLOBAL mess. There was also already plenty of liquidity getting pumped into the US's economy. Only so much money can be injected into a economy otherwise it creates detrimental effects. Inflation namely.
