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Fed Pours Huge Sums Into Foreign Bank Coffers
Posted By Washingtons Blog On May 23, 2013 @ 1:30 am In Think Tank | Comments Disabled
We were right. A large percentage of the bailouts  went to foreign banks (and see this ). And so did a huge portion of the money from quantitative easing . More here  and here .
Ron Paul noted in 2011 that essentially 100% of New York Federal Reserve Bank loans went to foreign banks .
A former high-level Federal Reserve official said that the Fed is secretly bailing out Europe .
The Fed has bailed out Gaddafi’s Libyan bank, the Arab Banking Corporation of Bahrain, and the banks of Bavaria, Korea and Mexico  … but has shafted normal Americans.
The Financial Times reported  in February:
Foreign banks also have a striking amount of cash at the Fed, potentially aggravating the Fed’s PR problem. Analysts at Stone & McCarthy noted recently that there had been a steep increase in foreign banks placing reserves at the Fed and suggested that “US banks may have distaste for the opportunistic arbitrage”, between lower market rates and the interest on reserves, whereas overseas institutions “might not feel encumbered in the same fashion”.
Yesterday, Zero Hedge provided an update to this story. ZH reports  that the Fed’s quantitative easing program has injected huge sums into foreign banks:
The latest H.8 report  demonstrates, as of the most recently weekly data, the Fed’s policies have led to foreign banks operating in the US holding an all time high amount of reserves, surpassing $1 trillion for the first time, or $1,033 billion to be precise.
This means that, as we expected several months ago, the only recipient of ongoing Fed money printing are not US banks, but foreign banks operating in the US. For those confused about the big picture, here is a chart showing the breakdown of cash held by big and small US banks as well as foreign banks, superimposed to total reserves created by the Fed since the start of the Great Financial Crisis. The correlation is 100%.
And just to prove that ALL the unsterilized cash from both QE2 and QEternity has essentially gone to support offshore banks, here is the conclusive chart showing the change in Fed reserves and cash held by foreign banks:
Finally, tying it all together, here is chart showing cash at US banks vs cash at foreign banks operating in the US. At $1.03 trillion in foreign cash, the Fed’s policies have once again led to more cash being held by foreign banks than all cash held by domestic banks.
We are confident that we speak for all when we say: “Thank you Ben – insolvent foreign banks appreciate your ongoing QE2 and QEternity-funded generosity“
In a separate report , ZH notes that Bank of Korea Governor Kim Choong-soo said:
World may face rate risk if U.S. exits from QE
Too bad that quantitative easing doesn’t help Main Street or the average American . It only helps big banks, giant corporations, and big investors . And by causing food and gas prices skyrocket, it takes a bigger bite out of the little guy’s paycheck, and thus makes the poor even poorer .
And it’s a shame that a study of 124 banking crises by the International Monetary Fund foundthat bailing out banks which are only pretending to be solvent – like most of the big banks  – harms the economy .
And what a farce that :
The bailout money is just going to line the pockets of the wealthy, instead of helping to stabilize the economy or even the companies receiving the bailouts:
- Bailout money is being used to subsidize  companies run by horrible business men, allowing the bankers to receive fat bonuses , to redecorate  their offices, and to buy gold toilets  and prostitutes 
- A lot of the bailout money is going to the failing companies’ shareholders 
- Indeed, a leading progressive economist says  that the true purpose of the bank rescue plans is “a massive redistribution of wealth to the bank shareholders and their top executives”
- The Treasury Department encouraged  banks to use the bailout money to buy their competitors, and pushed through an amendment to the tax laws  which rewards mergers in the banking industry (this has caused a lot of companies to bite off more than they can chew, destabilizing the acquiring companies)
Article printed from The Big Picture: http://www.ritholtz.com/blog
URL to article: http://www.ritholtz.com/blog/2013/05/fed-pours-huge-sums-into-foreign-bank-coffers/
URLs in this post:
 noted: http://www.washingtonsblog.com/2008/09/700-billion-bailout-could-fund-private-foreign-banks.html
 before: https://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program
 large percentage of the bailouts: http://www.washingtonsblog.com/2011/06/ron-paul-one-third-of-fed-bailout-loans-and-essentially-100-of-ny-fed-loans-went-to-foreign-banks.html
 see this: http://www.zerohedge.com/article/fed-releases-details-secret-855-billion-single-tranche-omo-bailout-program-just-another-fore
 huge portion of the money from quantitative easing: http://globalresearch.ca/index.php?context=va&aid=25566
 here: http://www.zerohedge.com/news/2013-02-09/feds-bailout-europe-continues-record-237-billion-injected-foreign-banks-past-month
 here: http://www.washingtonsblog.com/2012/12/quantitative-easing-benefits-the-super-elite-and-hurts-the-little-guy-and-the-american-economy.html
 secretly bailing out Europe: http://www.washingtonsblog.com/2011/12/former-high-level-federal-reserve-official-fed-secretly-bailing-out-europe.html
 Gaddafi’s Libyan bank, the Arab Banking Corporation of Bahrain, and the banks of Bavaria, Korea and Mexico: http://www.washingtonsblog.com/2011/10/the-fed-bails-out-gaddafis-libyan-bank-arab-banking-corp-of-bahrain-banks-of-bavaria-korea-and-mexico-but-shafts-america.html
 reported: http://www.ft.com/cms/s/0/9b245cd6-79e1-11e2-b377-00144feabdc0.html
 TD Bank: http://markets.ft.com/tearsheets/performance.asp?s=ca:TD
 Deutsche Bank : http://markets.ft.com/tearsheets/performance.asp?s=de:DBK
 UBS : http://markets.ft.com/tearsheets/performance.asp?s=ch:UBSN
 reports: http://www.zerohedge.com/news/2013-05-21/thanks-qe-bernanke-has-injected-foreign-banks-over-1-trillion-cash-first-time-ever
 latest H.8 report: http://www.federalreserve.gov/releases/h8/current/
 Image: http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/05/QE%20offshore%201.jpg
 Image: http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/05/cash%20balances%20vs%20reserves.jpg
 Image: http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/05/Foreign%20Banks%20vs%20QE.jpg
 Image: http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/05/Foreign%20vs%20Domestic%20Cash.jpg
 report: http://www.zerohedge.com/news/2013-05-21/mutual-assured-destruction-goes-global
 makes the poor even poorer: http://www.washingtonsblog.com/2011/01/quantitative-easing-is-causing-food.html
 most of the big banks: http://www.washingtonsblog.com/2013/01/12-of-the-13-big-banks-went-bust-and-the-government-lied-when-it-said-it-only-bailed-out-healthy-banks.html
 harms the economy: http://www.imf.org/external/pubs/ft/wp/2008/wp08224.pdf
 what a farce that: http://www.washingtonsblog.com/2009/03/bailout-money-instead-of-stabilizing.html
 subsidize: http://www.propublica.org/article/watchdog-no-hank-you-didnt-get-a-good-deal-for-the-taxpayer
 fat bonuses: http://www.google.com/search?hl=en&client=firefox-a&rls=org.mozilla:en-US:official&hs=foF&pwst=1&ei=8siMSarqEIG0sAPOtIn5CA&sa=X&oi=spell&resnum=1&ct=result&cd=1&q=bailout+bonuses&spell=1
 redecorate: http://www.google.com/search?hl=en&client=firefox-a&rls=org.mozilla:en-US:official&hs=PRa&ei=U8iMScWqIImMsAOS47mFCQ&sa=X&oi=spell&resnum=1&ct=result&cd=1&q=bailout+redecorate+office&spell=1
 gold toilets: http://www.huffingtonpost.com/matt-littman/john-thains-35000-toilet_b_162350.html
 prostitutes: http://www.google.com/url?sa=t&source=web&ct=res&cd=1&url=http%3A%2F%2Frawstory.com%2Fnews%2F2008%2FWall_Street_CEOs_investment_bankers_charged_0206.html&ei=PciMSdGcIZmMsQPbj6mSCQ&usg=AFQjCNHLQKoP0h0UEVYhKRJVQncNg8mngw&sig2=UC50MCbhFlmOQbS5ajilMw
 shareholders: http://www.washingtonpost.com/wp-dyn/content/article/2008/10/29/AR2008102904533_pf.html
 says: http://www.washingtonsblog.com/2009/02/leading-economist-says-true-purpose-of.html
 encouraged: http://www.washingtonsblog.com/2008/10/giant-companies-are-using-your-money-to.html
 pushed through an amendment to the tax laws: http://www.washingtonsblog.com/2008/10/even-the-new-york-times-calls-paulson-a-liar.html
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