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With a deal like this you wouldn’t need to invest in gold bullion.

April 15, 2011 – Gold bullion investments are the average Joe’s best defense against the dollar-trashing, market-crashing grabfest for the filthy rich. We didn’t get invited to Bernanke’s party where outrageous deals were handed out as favors behind the backs of Congress and the President.

Take this example, from Mike Taibbi’s Rolling Stone article, “Why Isn’t Wall Street in Jail?”

You and some friends create a venture and drum up $15 million in startup capital. None of you has any real business experience, but the Fed hands you $220 million in low interest loans anyway to buy commercial mortgages and student loans. Now, if your subsidized investment makes a profit, you get to keep it all. But if it tanks, you split the losses with the taxpayers 10-90.

Who could get a deal like that? The wife of the chairman of Morgan Stanley and her pal, the widow of a president of the company’s investment banking division. That’s the same Morgan Stanley that got $2 trillion in bailout loans.

The program, called TALF, was created in November 2008 purportedly to fuel consumer lending. The Fed got control of trillions of dollars, and, rather than lending it directly to consumers, thought it better to help out its Wall Street buddies and handed it over to the same crooks who caused the whole mess in the first place. Bernanke’s cronies had been through so much, so he sweetened the deal with so-called ‘non-recourse’ loans.

It works like this. Some hedge fund buys a pile of junk with a bunch of cash it borrowed from the Fed, which the Fed then holds as collateral. If the junk makes money the fund cashes in, pays off the loan, and pockets the difference. But if the investment tanks, the hedge fund just walks away free and clear, while taxpayers eat the loss.

Congress has finally forced the Fed into at least partial public disclosure of these shady bailout dealings and there is a lot more to the story. We have known all along that the Fed was in bed with the Wall Street elite, this is only the proof that Bernanke & Co. has fought so hard to keep secret. The best we can do is strongly invest in gold bullion and wait for their comeuppance.

Daily Updates Archive

Jonathan Monroe

Senior Staff Writer -

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