Why is Obama spending our non-existent money to bail out European banks?

[ScreamingEagle]

Geithner’s European Junket » Counterpunch: Tells the Facts, Names the Names

Federal Reserve intercedes in Euro debt crisis | Dylan Ratigan

 

[Raoul_Duke]

The fed is just providing unlimited dollar swaps to foreign banks because they can't get dollars on the open market. The alternative to not providing them with access to dollars is that they become insolvent and unable to function, like what happened to Lehman Brothers. On the whole we'd rather avoid another Lehman-style meltdown so this time we're trying to prevent it from happening again.

 

[OODA_Loop]

Yes choosing winners.

 

[Raoul_Duke]

Preventing losers, or at least trying to. The world has lost at least one and a half times global GDP due to the 2008 meltdown, probably eventually a lot more than that. There are still going to be massive economic problems ahead, this dollar deluge only fixes certain banks' liquidity problem, not their actual solvency problem, nor does it fix sovereign governments' solvency or banks' solvency, but at the very least it kicks the can down the road for a while and theoretically gives global policymakers a chance to fix things.

 

[ScreamingEagle]

The fed is just providing unlimited dollar swaps to foreign banks because they can't get dollars on the open market. The alternative to not providing them with access to dollars is that they become insolvent and unable to function, like what happened to Lehman Brothers. On the whole we'd rather avoid another Lehman-style meltdown so this time we're trying to prevent it from happening again.
...
Preventing losers, or at least trying to. The world has lost at least one and a half times global GDP due to the 2008 meltdown, probably eventually a lot more than that. There are still going to be massive economic problems ahead, this dollar deluge only fixes certain banks' liquidity problem, not their actual solvency problem, nor does it fix sovereign governments' solvency or banks' solvency, but at the very least it kicks the can down the road for a while and theoretically gives global policymakers a chance to fix things.

So instead of their banks reorganizing and taking their lumps.... we here in the U.S. get to pay for THEIR problems? Is this some socialist society rule...?

And how can we pay for this? We are broke. The only way is to print more dollars....which means the American people get robbed through devaluation of the dollar.....increasing inflation...

so now Obama is a "global policymaker" to the point where he sends Geithner out to take responsibility for foreign banking problems....?

 

[Raoul_Duke]

The fed is just providing unlimited dollar swaps to foreign banks because they can't get dollars on the open market. The alternative to not providing them with access to dollars is that they become insolvent and unable to function, like what happened to Lehman Brothers. On the whole we'd rather avoid another Lehman-style meltdown so this time we're trying to prevent it from happening again.
...
Preventing losers, or at least trying to. The world has lost at least one and a half times global GDP due to the 2008 meltdown, probably eventually a lot more than that. There are still going to be massive economic problems ahead, this dollar deluge only fixes certain banks' liquidity problem, not their actual solvency problem, nor does it fix sovereign governments' solvency or banks' solvency, but at the very least it kicks the can down the road for a while and theoretically gives global policymakers a chance to fix things.

So instead of their banks reorganizing and taking their lumps.... we here in the U.S. get to pay for THEIR problems? Is this some socialist society rule...?

And how can we pay for this? We are broke. The only way is to print more dollars....which means the American people get robbed through devaluation of the dollar.....increasing inflation...

so now Obama is a "global policymaker" to the point where he sends Geithner out to take responsibility for foreign banking problems....?

We swap dollars for euros or whatever other currency so we hold the same value until we're paid back. And then the Fed just cancels the dollars, in a poof of smoke, just like that! One of the many benefits of having a dreaded fiat currency.

And this isn't some socialist thing, it's been standard practice for well over half a century before the advent of socialism, Marxism or anything similar. This kind of central bank intervention has been happening since 1826 when the Bank of England bought bonds and other assets for cash and greatly expanded the money supply after the canal bubble burst. Canals had promised to be a "transport superhighway*" that would mean English businesses linked by canals to British ports could vastly increase their business by taking advantage of the new technology to sell around the country, export etc.

The bubble burst and for the first time in history, a central bank (they hadn't been around too long) intervened in the market. It worked really well and was standard practice after that, the evolution of central banks and their newfangled interventionist ways ending the previous couple of centuries of almost constant market panics, breakdowns, cessation of trade etc.

The mechanism of using the wider banking system via the central bank to bail the system out was even standard pratice in America too, the government authorising JP Morgan to act as America's central bank in the panics of 1893 and 1907. They just didn't do it in 1929. Or initially in 2008.

They did actually do unlimited dollar swaps in 2008 too, along with a couple of trillion dollars in loans to banks over and above the TARP, Maiden lane and similar bailout devices. We just found out about the two trillion due to a Bloomberg freedom of information request that finally got published. Can't remember Republicans making as much noise when that was going on back in 2008.

And all this stuff about "devaluing the dollar is just yet more GOP garbage. It's absolute nonsense. Here's the historical dollar index chart -- that's the dollar valued against a basket of foreign currencies thus accuratley showing its value over the past decades:

http://www.nytimes.com/imagepages/2007/09/22/business/20070922_CHARTS_GRAPHIC.html

See the value of the dollar collapse under reagan? Can you remember the liberal media constantly banging on day after day about how Reagan was debasing the dollar? Me neither. Then see it climb in value under Clinton. Then see it collapse in value again under George W Bush. Again, rmember the liberal media constantly telling us that Bush was debasing the dollar? Me neither.


Now you've heard a lot about how Obama is debasing the dollar. So the dollar must have absolutely collapsed in value since Obama took office, right? Here is what actually happened :

Yep, it's collapsed in value to where it was under the Bush administration. like almost everything you've heard about deficits, debt and so on over the past few years, this whole dollar debasement/Obama printing money thing is just a huge pile of shit.

And you don't have to worry about hyperinflation either. Worrying about imminent massive inflation is like worrying about how Obama is debasing the dollar.

 

[Quantum Windbag]

Geithner’s European Junket » Counterpunch: Tells the Facts, Names the Names

Federal Reserve intercedes in Euro debt crisis | Dylan Ratigan

Because the economy is global, and the Euro crises is part of the reason we are having a slow recovery.

 

[Quantum Windbag]

The fed is just providing unlimited dollar swaps to foreign banks because they can't get dollars on the open market. The alternative to not providing them with access to dollars is that they become insolvent and unable to function, like what happened to Lehman Brothers. On the whole we'd rather avoid another Lehman-style meltdown so this time we're trying to prevent it from happening again.
...
Preventing losers, or at least trying to. The world has lost at least one and a half times global GDP due to the 2008 meltdown, probably eventually a lot more than that. There are still going to be massive economic problems ahead, this dollar deluge only fixes certain banks' liquidity problem, not their actual solvency problem, nor does it fix sovereign governments' solvency or banks' solvency, but at the very least it kicks the can down the road for a while and theoretically gives global policymakers a chance to fix things.

So instead of their banks reorganizing and taking their lumps.... we here in the U.S. get to pay for THEIR problems? Is this some socialist society rule...?

And how can we pay for this? We are broke. The only way is to print more dollars....which means the American people get robbed through devaluation of the dollar.....increasing inflation...

so now Obama is a "global policymaker" to the point where he sends Geithner out to take responsibility for foreign banking problems....?

We are shoring up the central banks of the countries so that each country can deal with the internal problems they have. We are not actually bailing out banks, and the risk is minimal because we are not assuming any liabilities.

 

[signelect]

What a stupid question, you know he loves to spend money, he has no idea where it came from but there it is and he gets to spend it. Win Win for Obama

 

[Jarhead]

I defer to Raoul Duke on this. What he is saying seems to make sense. I really dont see this as the wrong action to take.

 

[Raoul_Duke]

The fed is just providing unlimited dollar swaps to foreign banks because they can't get dollars on the open market. The alternative to not providing them with access to dollars is that they become insolvent and unable to function, like what happened to Lehman Brothers. On the whole we'd rather avoid another Lehman-style meltdown so this time we're trying to prevent it from happening again.
...
Preventing losers, or at least trying to. The world has lost at least one and a half times global GDP due to the 2008 meltdown, probably eventually a lot more than that. There are still going to be massive economic problems ahead, this dollar deluge only fixes certain banks' liquidity problem, not their actual solvency problem, nor does it fix sovereign governments' solvency or banks' solvency, but at the very least it kicks the can down the road for a while and theoretically gives global policymakers a chance to fix things.

So instead of their banks reorganizing and taking their lumps.... we here in the U.S. get to pay for THEIR problems? Is this some socialist society rule...?

And how can we pay for this? We are broke. The only way is to print more dollars....which means the American people get robbed through devaluation of the dollar.....increasing inflation...

so now Obama is a "global policymaker" to the point where he sends Geithner out to take responsibility for foreign banking problems....?

We are shoring up the central banks of the countries so that each country can deal with the internal problems they have. We are not actually bailing out banks, and the risk is minimal because we are not assuming any liabilities.

We're not actually shoring up the central banks of other countries. We're acting in conjunction with the nEuropean Central bank, Bank of England, the Japanese and Swiss central bank to flood the financial system with dollars, allowing all the commercial banks who can't currently get access to dollars on the open markets access to dollars.

 

[Raoul_Duke]

[


Canals had promised to be a "transport superhighway*"

*Yeah, I forgot to add the footnote. Which would have been this :

The use of "superhighway" here is to deliberately compare the 1826 bubble with the "information superhighway" dot com bubble of the nineties, to show how in the world of financial speculation plus ca change. Bonus points for anybody who spotted this.

 

[Quantum Windbag]

So instead of their banks reorganizing and taking their lumps.... we here in the U.S. get to pay for THEIR problems? Is this some socialist society rule...?

And how can we pay for this? We are broke. The only way is to print more dollars....which means the American people get robbed through devaluation of the dollar.....increasing inflation...

so now Obama is a "global policymaker" to the point where he sends Geithner out to take responsibility for foreign banking problems....?

We are shoring up the central banks of the countries so that each country can deal with the internal problems they have. We are not actually bailing out banks, and the risk is minimal because we are not assuming any liabilities.

We're not actually shoring up the central banks of other countries. We're acting in conjunction with the nEuropean Central bank, Bank of England, the Japanese and Swiss central bank to flood the financial system with dollars, allowing all the commercial banks who can't currently get access to dollars on the open markets access to dollars.

I know it is not direct, and that the risk is minimal in the short run, and that it is actually necessary to keep our economy running. Let's not quibble over the semantics here.

 

[FactFinder]

#1 (permalink) Yesterday, 01:32 PM
ScreamingEagle
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Why is Obama spending our non-existent money to bail out European banks?

Maybe cause Bush started it. Maybe because Europe is always crying "wolf' and we are so naive to always believe it.

 

[Raoul_Duke]

We are shoring up the central banks of the countries so that each country can deal with the internal problems they have. We are not actually bailing out banks, and the risk is minimal because we are not assuming any liabilities.

We're not actually shoring up the central banks of other countries. We're acting in conjunction with the nEuropean Central bank, Bank of England, the Japanese and Swiss central bank to flood the financial system with dollars, allowing all the commercial banks who can't currently get access to dollars on the open markets access to dollars.

I know it is not direct, and that the risk is minimal in the short run, and that it is actually necessary to keep our economy running. Let's not quibble over the semantics here.

I'm not quibbling over semantics. Quibbling over semantics means arguing over the exact meaning of a particular word. You made a post which is flat wrong and completely misleading. Foreign central banks don't have a problem with access to dollars -- they're making dollar loans to commercial banks along with the Fed. The problem isn't central banks, who can print as much money as they want. The problem, or at least the most current urgent manifestation of the overarching situation, is that foreign commercial banks deemed by the market to have solvency problems can't get access to dollars. That's why the world's major central banks have stepped in to bail them out.

 

[FactFinder]

We are shoring up the central banks of the countries so that each country can deal with the internal problems they have. We are not actually bailing out banks, and the risk is minimal because we are not assuming any liabilities.

We're not actually shoring up the central banks of other countries. We're acting in conjunction with the nEuropean Central bank, Bank of England, the Japanese and Swiss central bank to flood the financial system with dollars, allowing all the commercial banks who can't currently get access to dollars on the open markets access to dollars.

I know it is not direct, and that the risk is minimal in the short run, and that it is actually necessary to keep our economy running. Let's not quibble over the semantics here.

Sounds like a true globalist who has some derivatives to sell me.

 

[Quantum Windbag]

We're not actually shoring up the central banks of other countries. We're acting in conjunction with the nEuropean Central bank, Bank of England, the Japanese and Swiss central bank to flood the financial system with dollars, allowing all the commercial banks who can't currently get access to dollars on the open markets access to dollars.

I know it is not direct, and that the risk is minimal in the short run, and that it is actually necessary to keep our economy running. Let's not quibble over the semantics here.

I'm not quibbling over semantics. Quibbling over semantics means arguing over the exact meaning of a particular word. You made a post which is flat wrong and completely misleading. Foreign central banks don't have a problem with access to dollars -- they're making dollar loans to commercial banks along with the Fed. The problem isn't central banks, who can print as much money as they want. The problem, or at least the most current urgent manifestation of the overarching situation, is that foreign commercial banks deemed by the market to have solvency problems can't get access to dollars. That's why the world's major central banks have stepped in to bail them out.

We are trading Dollars for Euros with the central bank of Europe, they will then use that to shore up other banks. We are doing this because the Euro is not strong enough, on its own, to do the job. By insisting that we are not shoring up the banks you are quibbling over semantics. We can do it this way now, or wait a couple of months and do it directly.

 

[domonkoz]

Sigh. This is such a hard thing to communicate to people who are still clinging to nationalistic pride. As said in the movie NETWORK, there are no nations. There are no countries. There is only exxon, dupont, A-T&t. And so forth. Bailing out a bank in Europe is not much different then bailing out a bank here since all the money just floats back and forth between those central banks and ours. The more important question is why do we bail out billionaires in the first place? Haven't we made it easy enough on them with tax breaks, refunds and incentives?

 

[OODA_Loop]

Billionaires do help pay the bills.

 

[editec]

Geithner’s European Junket » Counterpunch: Tells the Facts, Names the Names

Federal Reserve intercedes in Euro debt crisis | Dylan Ratigan

Why is Obama spending our non-existent money to bail out European banks?

In order to save the US banks that issues BONDS of dubious value, why else?

Everything that was done was done to save the BANKS.

The magnitude of the money spend saving our banks (TARP) dwarfs the total STIMULUS many times.

And BOTH PARTIES did it, folks. They both rushed in to save the banks, and gave some pittance to the rest of the nation.

The sooner you partisan morons figure this SCAM out, the better.