Webster Tarpley – US Bankrupt Zombie banks propped up by Bernanki
Federal Reserve saves US bankrupt banks: Tarpley
Fri Sep 14, 2012 1:16PM GMT
The problem with the Federal Reserve is that they see their task as saving failed banks; we have to call them ‘zombie banks’ because they are bankrupt entities that sit there; they absorb government and Federal Reserve resources; they do not provide investment; they do not create jobs.”
“The problem with the Federal Reserve is that they see their task as saving failed banks; we have to call them ‘zombie banks’ because they are bankrupt entities that sit there; they absorb government and Federal Reserve resources; they do not provide investment; they do not create jobs…,” Webster Griffin Tarpley said in an interview with Press TV on Friday.
US Federal Reserve Chairman Ben Bernanke has warned that the country’s unemployment situation “remains a grave concern” as the hiring process in the job market stays sluggish.
The US Labor Department said on Thursday that applications for weekly benefits rose by 15,000 to a seasonally-adjusted 382,000 for the week, which ended on September 8, the highest level since mid-July.
The US Central Bank has announced a new stimulus program, declaring that it will purchase $40 billion of mortgage-backed debt per month until the employment outlook in the country substantially improves.
“Mortgage-backed securities, by the way, are a kind of derivative. So it looks like the Fed thinks that the way you deal with an economic depression is to keep the price of mortgage-backed derivatives up by buying them at a rate of 40 billion dollars per month. This simply cannot work,” Tarpley explained.
He further argued that, unemployment in the US is much higher than the announced government estimates saying, there are “about 30 million people minimum that are out of work.”
The analyst also stated that, the failed American banks do not invest with the money they receive but they only absorb government and Federal Reserve resources with “no plan and equipment or capital goods investment going on.”
“If you invested your money into those things [building infrastructure], you would actually get a recovery… In other words, 500 billion or a trillion dollars at zero percent over a hundred years and put that into infrastructure, you would actually get a recovery. But that would mean not favoring the zombie banks in the way that Bernanke continues to do,” he concluded.