The audit of the Fed is out, and there are some people screaming -becasue they don't understand the basics of banking.
I wrote this on FB in response to one who claimed "not one dollar of the 16 trillion was repaid.
?>>money not repaid
That is one thing he got completely wrong. I think, but don't know, because he doesn't actually give sufficient details, that he read the "outstanding balance" figures of 0 as meaning the debt were forgiven, or somehow not repaid.
The report is clear, though, that money's lent were repaid. Do a word search in the report [http://www.scribd.com/doc/60553686/GAO-Fed-Investigation] for "repaid" and see the many specifications that monies were repaid. The youtube guy is just whacko on this point. (and it isn't the only thing he is whacko about.
And yeah, the interest rate charged thew banks sucks - as I said, there are many serious problems with the fed - largely, IMO, the result of Greenspan's running it.
But the guy who did the video is still an idiot
He mentions Table 8: as I suspected, the guy doesn't understand the concept of revolving credits. The lead-in to table 8 explains it, to a certain degree:
"Table 8 aggregates total dollar transaction amounts by adding the total dollar amount of all loans butdoes not adjust these amounts to reflect differences across programs inthe term over which loans were outstanding. For example, an overnightPDCF loan of $10 billion that was renewed daily at the same level for 30business days would result in an aggregate amount borrowed of $300billion although the institution, in effect, borrowed only $10 billion over 30 days." See page 130
Under a revolving credit, a loan is made in a certain amount, repaid, remade, repaid, remade, etc.
If you have extended a $10 revolving line of credit to me, and I have drawn it down, repaid it the next day, drawn it down again, repaid it, 10 times - have I borrowed $10? (the maximum amount of the risk at any one time) or have I borrowed $100?
What if I borrowed that $10 for the full 10 days, instead of cleaning it up daily? You wouldn't say I've borrowed $100 dollars, right?
Requiring the periodic cleanup (in my example, and in the audit reports explanation, daily) is actually more restrictive and safer from the lender's point of view than letting run for a longer term.