cash

Here is another example of a news story that gives a misleading impression by leaving out pertinent information. It was announced that the four big banks that got TARP money have now repaid it all with interest. End of story. What was not reported is that the treasury in order to get cash to spend loaned these banks money at zero interest and then allowed these same banks to purchase government bonds that paid three percent interest thus giving them a risk free guaranteed profit. It is from this profit that the banks repaid the TARP loans.

Why do this? The government gives them cash and when they buy bonds they pay for those with cash and now the government has cash and the government can deny that they are just printing money which is called monetizing the debt which the government said they would not do. Another example of our government at work.