THE GROFF/ELLISON POLITICAL REPORT

That Close to Meltdown

Posted in Uncategorized by groffellison on February 11, 2009

images22As unpopular as the Wall Street TARP bailout is in the public eye, information appears to continually leak out about how critical it is to pump some sort of cash into the financial system – between the rock of not liking this plan and the hard place of “Well – you got any other bright ideas?”. The problem, however, is with the lack of oversight and knowledge about that money – where exactly is it going and what is it supposed to do? It, of course, doesn’t help that the general American public is not that economics-savvy.

Readers should check out Rep. Paul Kanjorski (D-PA) on C-SPAN’s Washington Journal, Chair of the House Capital Markets Subcommittee, cluing us in to just how serious this crisis is.  Kanjorski says the Federal Reserve told Members of Congress about a “tremendous draw-down of money market accounts in the United States, to the tune of $550 billion dollars.” Interesting Kanjorski is talking about it so many months after the fact – but, at least, someone on Capitol Hill is being forthcoming.

We’ll let the transcript speak for itself:

“On Thursday Sept 15, 2008 at roughly 11 AM The Federal Reserve noticed a tremendous draw down of money market accounts in the USA to the tune of $550 Billion dollars in a matter of an hour or two.

Money was being removed electronically.

The treasury tried to help with $150 Billion.

But could not stem the tide.

It was an electronic run on the banks

The treasury intervened but had they not closed down the accounts they estimated that by 2 PM that afternoon. Within 3 hours. $5.5 Trillion would have been withdrawled and collapsed and within 24 hours the world economy.”

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