Wednesday, January 13, 2010
FEDERAL RESERVE MADE $52.1 BILLION IN PROFITS "DURING A RECESSION"
The Federal Reserve made a profit of $52.1 billion in 2009, a rise of 47% over the previous year. The sum allowed the central bank to pay a record $46 billion to the U.S. Treasury. That was the largest amount ever paid by the central bank since its creation in 1914. The record figure was largely thanks to the attempt to support the financial system throughout the financial crisis. The fed funds itself from its own operations and returns any profits to the Treasury Department. The figures suggest that U.S. taxpayers have, so far, gained money from the U.S. government's action in propping up the system. Some of the profit came from interest earned on government bonds and mortgages related securities including those mortgage giants Freddie Mac and Fannie Mae. The emergency lending programs instituted by the central bank during the financial crisis helped swell the FED's balance sheet more than $2 trillion dollars. They were designed to keep down interest rates and get banks lending again, hoping to spark a economic recovery. The FED could also money on its holdings if it sells them at a time when they have fallen in value. The FED also earned money from its emergency loans to banks and other firms, such as giant car makers. It charged both interest rates and fees. Finally, the president today is going institute a windfall profits tax on the top 20 banks which means the banks are going to pass the taxes to there customers. The President should tax the FED but it is so hard to tax someone when they are running a PONZI SCHEME on the American people and its legal. The FED should be audited today and stop there criminal banking activity.