He began by giving an historical account of the similarities between the financial crisis of 1907 and the crisis of 2007-2008. He noted that in 1907 JP Morgan acted as a “lender of last resort” by loaning millions (in 1907!) to about-to-fail trust companies and banks, with those institutions assets and investments pledged as collateral. Thus on the back of the very wealthy few America was saved for the day. Following and because of those events, the Federal Reserve was founded. Dr. Bernanke then noted that in '07-'08 the Fed acted as the “lender of last resort” to keep the trust companies from failing just as Morgan and Rockefeller did a hundred years earlier. Only there’s a problem, which Ben was sure eluded the audience - the money used 100 years ago was real cash from the pockets of real people. In '07-08 the money used was manufactured out of thin air by the Fed.
