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Why is the Fed Bailing Out Qaddafi? by Matt Taibbi

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by Matt Taibbi
Rolling Stone
April 1, 2011

Barack Obama recently issued an executive order imposing a wave of sanctions against Libya, not only freezing Libyan assets, but barring Americans from having business dealings with Libyan banks.

So raise your hand if you knew that the United States has been extending billions of dollars in aid to Qaddafi and to the Central Bank of Libya, through a Libyan-owned subsidiary bank operating out of Bahrain. And raise your hand if you knew that, just a week or so after Obama’s executive order, the U.S. Treasury Department quietly issued an order exempting this and other Libyan-owned banks to continue operating without sanction.

[…]

via Why is the Fed Bailing Out Qaddafi? | Rolling Stone Politics by Matt Taibbi

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http://vodpod.com/dandelionsalad/tag/libya

http://vodpod.com/dandelionsalad/tag/economy

6 thoughts on “Why is the Fed Bailing Out Qaddafi? by Matt Taibbi”

  2. There is no secret in this matter. All the information can be found on the Arab Banking Corporation (ABC) and http://www.bloomberg.com web sites. According to the later, numerous foreign banks took advantage of the historically low interest rates of the Federal Reserve loans during that period. ABC was one of them and the Bloomberg headline states that it borrowed at least $5billion. All that it borrowed has been paid back with interest. US and European banks borrowed a lot more, hundreds of billions of dollars, and those also have been paid back. It was purely a commercial transaction between the banks and Qaddafi had nothing to do with it. At that time, Libya had developed collaborative relations with the US and its central bank held 29 percent share in the ABC. Its share increased to 59 percent later, after it bought out Abu Dhabi’s share. Kuwait is the other major share holder, along with some others. It is a Bahrain based bank, with branches all over the world, including the US. Its New York branch helps American companies conduct business in the Middle East.

    Under the asset freeze and related exemptions, even though ABC is foreign based, the bank has been prevented from conducting transactions with the Qaddafi regime but can continue trading with other customers as usual.

    For more information, use the following links:

    http://www.bloomberg.com/news/2011-03-31/libya-owned-arab-banking-corp-drew-at-least-5-billion-from-fed-in-crisis.html

    http://www.bloomberg.com/news/2011-04-01/foreign-banks-tapped-fed-s-lifeline-most-as-bernanke-kept-borrowers-secret.html

    http://www.arabbanking.com/En/Pages/default.aspx

  3. I read the full article by using the web link and posted the following comment there. You will need to read that article in full too to understand my comment. It is addressed to the author of the article:

    “This is pure sensationalism. The loans were given to the ABC before the sanctions. The Central Bank of Libya is only one of the components of ABC. Who are the others? You do not provide any information about that. Also, you call these loans aid to Qaddafi! Qaddafi and Libya do not need any aid from the US. According to the CIA Factbook, Libya has $107 billion in gold and foreign exchange reserves and has huge investments in many countries, including the US, where its $30 billion have now been frozen, in a plot to plunder and steal it. It is the US economy that is bankrupt and is being run on borrowed money. Its national debt is now $14 trillion, much of it owed to China and Japan. So, the US is now relying on such huge foreign aid.

    To begin with, as you stated yourself, these loans were granted before the sanctions, and therefore were not in violation of them. Also, it is very likely that the real beneficiaries of the loans to ABC are the American corporations and banks. It is common to extend such loans to other countries, in which these are considered safe, for exports of goods and services. As part of radical changes in the Libyan foreign political and economic relations in the past ten years, many US corporations penetrated many areas of Libyan economy, including huge oil and natural gas exploration and development projects. These loans may be partly related to those.

    Fragmented and sensational information-presented out of context-like your, is totally misleading, and fuels hysteria in an already astoundingly disinformed public against the wrong targets.”

  4. Pingback: Libya and the World of Oil by Noam Chomsky « Dandelion Salad

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