February 6, 2009
At 2 minutes, 20 seconds into the C-Span video clip above, Rep. Paul Kanjorski of Pennsylvania explains how the Federal Reserve told Congress about a “tremendous draw-down of money market accounts in the United States, an amount totalling $550 billion dollars.” According to Kanjorski, this electronic transfer occured over the period of an hour or two.
Here is a transcript of what Kanjorski says in the video:
On Thursday at about 11 o’clock in the morning the Federal Reserve noticed a tremendous drawdown of money market accounts in the United States, to the tune of $550 billion was being drawn out in a matter of an hour or two. The Treasury opened up its window to help. It pumped $105 billion in 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 out there.Kanjorski does not provide further details...
If they had not done that, their estimation was that by two o’clock that afternoon, $5.5 trillion dollars would have been drawn out of the money market system of the United States, would have collapsed the entire economy of the United States, and within 24 hours the world economy would have collapsed. It would have been the end of our economic system and our political system as we know it...
If you don't have a banking sytem, you don't have an economy.
We’re really no better off today than we were three months ago because we’ve had a decrease in the equity positions of banks because other assets are going sour by the moment...
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