Dear Mr. Berko:

My friend, who is a reputable lawyer, recommended First Niagara Financial, which trades at $8.80 and pays a good dividend. I think buying 1,000 shares for a two- or three-year investment would be a good speculation. What do you think?

My friend also told me that the Federal Reserve in the past three years has loaned more than $10 trillion to Merrill Lynch, Goldman Sachs, Morgan Stanley and foreign banks at 1 percent interest, and that none of this money has been paid back. Could this be true?

– D.S., Syracuse, N.Y.

Dear D.S.:

No, that’s not true. The accurate number is $16.3 trillion, and the interest rate is zero. Federal Reserve Chairman Ben Bernanke and the Obama administration are doing their darnedest to hide this chicanery, but a recent Government Accountability Office audit showed that the Fed, without the know-ledge of Congress and under the direction of the administration, gave Citigroup $2.5 trillion; gave Morgan Stanley $2.1 trillion; gave Merrill Lynch $2 trillion; gave Bank of America $1.3 trillion; and gave lesser amounts to Barclays, Deutsche Bank, UBS, The Royal Bank of Scotland, plus others. The complete list can be found on page 131 of the GAO audit.

This is an administration Ponzi scheme in which the Fed silently passed out money like Halloween candy to megabanks and super-corporations while millions of Americans were unemployed and couldn’t make mortgage payments. So far, not a centime has been repaid – and it will never be. Wouldn’t it be wonderful if we could trust our government?

But you can trust First Niagara Financial Group Inc. (FNFG-$8.80), a Buffalo, N.Y., bank that has been lending money to Americans since 1870. In 1870, our national debt was $2.5 billion, the U.S. population was 40 million, John D. Rockefeller incorporated Standard Oil of New Jersey and construction began on the Brooklyn Bridge. Today, FNFG has 115 branches in upstate New York; 142 branches in Pennsylvania; a book value of $14.11 per share; more than $1.2 billion in revenues; 99 cents a share in earnings; and a 64-cent dividend yielding a keen 7.3 percent. I think your friend gave you reputable advice.

Barclays, Market Edge and Reuters have a “buy” rating on FNFG, suggesting 2012 revenues of $1.5 billion, earnings of $1.10 per share and a dividend increase to possibly 70 cents.

An interesting but speculative bank stock is Synovus Financial Corp. (SNV-$1.49), which has been lending money to folks since 1888.

After several years of stinging losses, Synovus is back on the road to profitability. Earnings for 2012 will come in between 10 cents and 22 cents per share, and the shares trade at less than 60 percent of the $2.60 book value. SNV has $1.2 billion in revenues, $751 million in cash and a 4-cent dividend that could be raised to 5 cents in late 2012, yielding almost 3 percent.

Though I don’t expect SNV to double in the coming year, I think it could move up to the $2.25-$2.50 range in the coming 12 months and possibly to the $5 level a few years later. So a 1,000-share purchase could be a smart gamble.