Tuesday, February 10, 2009

How worldwide economic collapse was averted.

At 2 minutes, 20 seconds into this C-Span video clip, Rep. Paul Kanjorski of Pennsylvania explains how the Federal Reserve told Congress members about a "tremendous draw-down of money market accounts in the United States, to the tune of $550 billion dollars." According to Kanjorski, this electronic transfer occurred over the period of an hour or two.

"The Treasury opened its window to help. They pumped a hundred and five billion dollars into the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks!

They decided to close the operation, close down the money accounts, and announce a guarantee of $250,000 per account so there wouldn't be further panic. And that's what actually happened.

If they had not done that their estimation was that by 2pm that afternoon, 5 1/2 trillion dollars would have been drawn out of the money market system of the United States, it would have collapsed the entire economy of the United States, and within 24 hours the world economy would have collapsed."

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