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

[kyzr]

Why is Obama spending our non-existent money to bail out European banks?[/URL]

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.

1. Bonds from US banks are sound. Its the Bonds from EU skank countries that are JUNK
2. The banks paid back every dollar borrowed with interest (wrong again)
3. There is no scam moron, they were loans, that were paid back

They needed the "loans" because the leftists passed the Community Reinvestment Act requiring the banks to give loans to the unqualified, who defaulted, which led to the financial crisis. Fannie & Freddie bought-off the dems like Barney-Frank-Obama. Follow the money before you whine.

 

[bitterlyclingin]

First objective of the Obama Administration: Bankrupt American according to Cloward and Piven's directions.
Second: Wait for the Nanny State to fail and the subsequent riots that will inevitably follow (As per NY Mayor Michael Bloomberg)
Third: Seize all the remaining wealth and redistribute at will.

Any person who listened to, heard, and understood Jimmy Hoffa's Labor Day remarks should have immediately determined to make their way to the gun stores forthwith, the following Tuesday morning. Mr Hoffa is the harbinger of Obama's coming attractions, like the Islamofascist muscle during the seizure of the four airliners on the morning of 9/11, there to slit the throats of all who resist or any who might stand in their way.

 

[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....?

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:

The New York Times > Business > Image > Trade-Weighted U.S. Dollar Index

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.

thanks for the history lesson but just the same many are still worried about inflation today...prices continue to go up.....gold continues to be more popular every day....whether or not this inflation becomes hyper is another question...

Printing more money out of thin air to bail out Europe just seems like throwing even more of our money down a rabbit hole......anyhow it appears the Europeans were not impressed with Geithner's proposals.....evidently they do not think more 'stimulus' will solve their problem...

Tim Geithner has experience flying around the world to address finance ministers and instructing them on how to solve their problems. He was a senior executive at the IMF from 2011 to 2003, after all — a period which coincided with major sovereign crises in South America.

So it may or may not be surprising that his latest attempt at such activity, in sunny Wroclaw, fell spectacularly flat. He waltzed into a meeting of euro zone finance ministers (he took a private car, they shared a bus), and informed them that they should follow his lead and leverage the money in the EFSF. In unison, the finance ministers responded by saying “why, Mr Geithner, that’s a simply spectacular idea, we’re shamefaced to admit that we didn’t think of it ourselves. Thanks for your advice, we’ll follow it, to the letter, forthwith!”

Or, not so much:

Mr. Juncker said, pointedly, that the euro group was not discussing “an increase or expansion” of its bailout fund “with a nonmember of the euro area.”

That’s Jean-Claude Juncker, president of the group of euro area finance ministers, and he was being diplomatic.

“I found it peculiar that even though the Americans have significantly worse fundamental data than the euro zone that they tell us what we should do and when we make a suggestion … that they say no straight away,” Maria Fekter told reporters afterwards…

“We can always discuss with our American colleagues. I’d like to hear how the United States will reduce its deficits … and its debts,” Belgian Finance Minister Didier Reynders said somewhat tartly.

It’s pretty clear, here, that in the wake of the debt-ceiling debacle Geithner has lost a significant amount of international heft. And it’s also clear that the euro zone has absolutely no cohesion, nor any real ability to do anything at all to resolve the current crisis.

Clashing with U.S. Treasury Secretary Timothy Geithner, finance chiefs from the euro region said the 18-month debt crisis leaves no room for tax cuts or extra spending to spur an economy on the brink of stagnation.

The euro zone shuns Geithner | Felix Salmon

 

[Raoul_Duke]

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:

The New York Times > Business > Image > Trade-Weighted U.S. Dollar Index

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.

thanks for the history lesson but just the same many are still worried about inflation today...prices continue to go up.....gold continues to be more popular every day....whether or not this inflation becomes hyper is another question...

Printing more money out of thin air to bail out Europe just seems like throwing even more of our money down a rabbit hole......anyhow it appears the Europeans were not impressed with Geithner's proposals.....evidently they do not think more 'stimulus' will solve their problem...

Tim Geithner has experience flying around the world to address finance ministers and instructing them on how to solve their problems. He was a senior executive at the IMF from 2011 to 2003, after all — a period which coincided with major sovereign crises in South America.

So it may or may not be surprising that his latest attempt at such activity, in sunny Wroclaw, fell spectacularly flat. He waltzed into a meeting of euro zone finance ministers (he took a private car, they shared a bus), and informed them that they should follow his lead and leverage the money in the EFSF. In unison, the finance ministers responded by saying “why, Mr Geithner, that’s a simply spectacular idea, we’re shamefaced to admit that we didn’t think of it ourselves. Thanks for your advice, we’ll follow it, to the letter, forthwith!”

Or, not so much:

Mr. Juncker said, pointedly, that the euro group was not discussing “an increase or expansion” of its bailout fund “with a nonmember of the euro area.”

That’s Jean-Claude Juncker, president of the group of euro area finance ministers, and he was being diplomatic.

“I found it peculiar that even though the Americans have significantly worse fundamental data than the euro zone that they tell us what we should do and when we make a suggestion … that they say no straight away,” Maria Fekter told reporters afterwards…

“We can always discuss with our American colleagues. I’d like to hear how the United States will reduce its deficits … and its debts,” Belgian Finance Minister Didier Reynders said somewhat tartly.

It’s pretty clear, here, that in the wake of the debt-ceiling debacle Geithner has lost a significant amount of international heft. And it’s also clear that the euro zone has absolutely no cohesion, nor any real ability to do anything at all to resolve the current crisis.

Clashing with U.S. Treasury Secretary Timothy Geithner, finance chiefs from the euro region said the 18-month debt crisis leaves no room for tax cuts or extra spending to spur an economy on the brink of stagnation.

The euro zone shuns Geithner | Felix Salmon

Prices always continue to go up. Right now they're going up at an historically low level, and they'd be going up even less if there wasn't massive new demand for commodities from emerging markets and massive new global demand for food coupled with bad grain/crop harvests over the past couple of years. Gold does continue to go up but again a lot of that is again due to increased demand and paranoid Glen beck fans. The markets are supremely unconcerned about inflation. There's no need to worry.

The europeans are living in denial. If the fed and the other central banks hadn't bailed out eurobanks we'd start to see them stop lending to each other (because they know that there are massive losses at some banks but nobody knows exactly where all the bodies are buried) to avoid risk, basically the thing that precipitated the Lehman meltdown in 2008. European banks are in a much worse financial position than American ones but due to the global nature of the financial system they do lots of business with American baks, lots of them are Fed primary dealers, they have big positions in US markets and do big business with US banks. So the Fed bailing them out is to prevent contagion in the financial system and the whole thing spreading to America, banks going over like dominoes etc. We're not throwing money away when we're bailing them out, we'll get it all back eventually. When we threw money away was in deregulating the whole industry and agreeing to back the losses at full boat while allowing the perps to keep their jobs and not throwing them in jail.

And europeans don't think stimulus is the answer. they've done what the tea party want and sladhed spending dramatically, gone on a huge spending cut binge. Now according to the free market fuckwits who got us into this mess we're supposed to see the emergence of massive business confidence followed by huge investment etc. What we're actually seeing is european economic growth grind to a standstill and business confidence plummet to 2008 levels.

 

[Raoul_Duke]

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.

We are not trading dollars for euros with the ECB and we are not doing this because the euro is not strong enough. You claimed that the Fed was shoring up central banks, now you've changed your claim to shoring up banks. And we're not quibbling over semantics, i'm pointing out that you've made a bunch of flat wrong claims in your posts, which is exactly what you have done.

Here's what the Fed and other central banks are actually doing :


Fears of a deepening of Europe's debt crisis have prompted the world's leading central banks to pump US dollars into the financial system, in a co-ordinated action designed to boost market confidence.

The Bank of England joined the US Federal Reserve, the European Central Bank, the Swiss National Bank and the Bank of Japan on Thursday to announce that they would flood money markets with dollars over the coming months.

Under the terms of the deal, banks will be able to bid for unlimited amounts of US dollars at fixed interest rates in three separate auctions. The first of these will be on 12 October.

http://www.guardian.co.uk/business/2011/sep/15/world-banks-flood-markets-with-dollars

 

[Charles_Main]

more than that. There are still going to be massive .

You are GOD DAMN right there are, and the US putting itself further into Debt to Try and Prop up a Failing System in Europe even as we move ourselves closer to mimicking that Failing system. Is only going to make them WORSE!

 

[Raoul_Duke]

Why is Obama spending our non-existent money to bail out European banks?[/URL]

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.

1. Bonds from US banks are sound. Its the Bonds from EU skank countries that are JUNK
2. The banks paid back every dollar borrowed with interest (wrong again)
3. There is no scam moron, they were loans, that were paid back

They needed the "loans" because the leftists passed the Community Reinvestment Act requiring the banks to give loans to the unqualified, who defaulted, which led to the financial crisis. Fannie & Freddie bought-off the dems like Barney-Frank-Obama. Follow the money before you whine.

Can you provide some facts and evidence to back up your claim that the Community Reinvestment Act led to the financial crisis? And can you explain exactly what Barney Frank did to precipitate the crisis, again by using facts and evidence?

 

[Raoul_Duke]

more than that. There are still going to be massive .

You are GOD DAMN right there are, and the US putting itself further into Debt to Try and Prop up a Failing System in Europe even as we move ourselves closer to mimicking that Failing system. Is only going to make them WORSE!

I like your impressive capitalisation of words. What do you think I'm right about?

 

[Charles_Main]

more than that. There are still going to be massive .

You are GOD DAMN right there are, and the US putting itself further into Debt to Try and Prop up a Failing System in Europe even as we move ourselves closer to mimicking that Failing system. Is only going to make them WORSE!

I like your impressive capitalisation of words. What do you think I'm right about?

Quote Feature screwed up. Full quote was where you said there are still going to be Massive Economic Problems to come.

By the way I like your impressive Spelling of the word Capitalization. lol

 

[Raoul_Duke]

You are GOD DAMN right there are, and the US putting itself further into Debt to Try and Prop up a Failing System in Europe even as we move ourselves closer to mimicking that Failing system. Is only going to make them WORSE!

I like your impressive capitalisation of words. What do you think I'm right about?

Quote Feature screwed up. Full quote was where you said there are still going to be Massive Economic Problems to come.

By the way I like your impressive Spelling of the word Capitalization. lol

In English it's "capitalisation". The reaosn things are so bad in europe is down to them having a common currency but no central authority with unified taxing and spending powers. That's not a problem we have in America. The problem we share is a badly regulated and undercapitalised banking system, and belive it or not europe is in a worse position than we are on that one. They were even more free market deregulationist than we were!

 

[Charles_Main]

I like your impressive capitalisation of words. What do you think I'm right about?

Quote Feature screwed up. Full quote was where you said there are still going to be Massive Economic Problems to come.

By the way I like your impressive Spelling of the word Capitalization. lol

In English it's "capitalisation". The reaosn things are so bad in europe is down to them having a common currency but no central authority with unified taxing and spending powers. That's not a problem we have in America. The problem we share is a badly regulated and undercapitalised banking system, and belive it or not europe is in a worse position than we are on that one. They were even more free market deregulationist than we were!

So, you don't think the Debt Burdens in Europe have anything to do with the Problems eh?

I actually agree with your point about their Centralized Currency. I said when the Euro Started that it was not wise to try and have a Central Currency with out a Strong Central Governing Body to control it. The supporters of the EURO hoped a Centralized Currency Hoped a shared currency would push Member states into giving up more sovereignty to the Central Government. They were wrong, There is no common ground for Europe to Come together as one Nation. It's not going to happen.

As far as the spelling, lol, I guess my dictionary and spell checker must not be "English" lol

 

[Raoul_Duke]

Quote Feature screwed up. Full quote was where you said there are still going to be Massive Economic Problems to come.

By the way I like your impressive Spelling of the word Capitalization. lol

In English it's "capitalisation". The reaosn things are so bad in europe is down to them having a common currency but no central authority with unified taxing and spending powers. That's not a problem we have in America. The problem we share is a badly regulated and undercapitalised banking system, and belive it or not europe is in a worse position than we are on that one. They were even more free market deregulationist than we were!

So, you don't think the Debt Burdens in Europe have anything to do with the Problems eh?

I actually agree with your point about their Centralized Currency. I said when the Euro Started that it was not wise to try and have a Central Currency with out a Strong Central Governing Body to control it. The supporters of the EURO hoped a Centralized Currency Hoped a shared currency would push Member states into giving up more sovereignty to the Central Government. They were wrong, There is no common ground for Europe to Come together as one Nation. It's not going to happen.

As far as the spelling, lol, I guess my dictionary and spell checker must not be "English" lol

The debt burdens in europe are a result of the problems, which are (excepting Greece) massive deregulation of the financial industry. Two of the biggest problem countries, ireland and Spain, actually had very low national debt (30ish% of GDP IIRC) and budget surpluses going into the meltdowmn. now they're both effectively insolvent due to the debts they've had to take on from their banks due to their massive private sector market failure.

Your dictionary is American English, which is a very good and impressive version of the English language, but not English.

 

[Charles_Main]

In English it's "capitalisation". The reaosn things are so bad in europe is down to them having a common currency but no central authority with unified taxing and spending powers. That's not a problem we have in America. The problem we share is a badly regulated and undercapitalised banking system, and belive it or not europe is in a worse position than we are on that one. They were even more free market deregulationist than we were!

So, you don't think the Debt Burdens in Europe have anything to do with the Problems eh?

I actually agree with your point about their Centralized Currency. I said when the Euro Started that it was not wise to try and have a Central Currency with out a Strong Central Governing Body to control it. The supporters of the EURO hoped a Centralized Currency Hoped a shared currency would push Member states into giving up more sovereignty to the Central Government. They were wrong, There is no common ground for Europe to Come together as one Nation. It's not going to happen.

As far as the spelling, lol, I guess my dictionary and spell checker must not be "English" lol

The debt burdens in europe are a result of the problems, which are (excepting Greece) massive deregulation of the financial industry. Two of the biggest problem countries, ireland and Spain, actually had very low national debt (30ish% of GDP IIRC) and budget surpluses going into the meltdowmn. now they're both effectively insolvent due to the debts they've had to take on from their banks due to their massive private sector market failure.

Your dictionary is American English, which is a very good and impressive version of the English language, but not English.

Ah, You meant English English. lol

 

[Charles_Main]

In English it's "capitalisation". The reaosn things are so bad in europe is down to them having a common currency but no central authority with unified taxing and spending powers. That's not a problem we have in America. The problem we share is a badly regulated and undercapitalised banking system, and belive it or not europe is in a worse position than we are on that one. They were even more free market deregulationist than we were!

So, you don't think the Debt Burdens in Europe have anything to do with the Problems eh?

I actually agree with your point about their Centralized Currency. I said when the Euro Started that it was not wise to try and have a Central Currency with out a Strong Central Governing Body to control it. The supporters of the EURO hoped a Centralized Currency Hoped a shared currency would push Member states into giving up more sovereignty to the Central Government. They were wrong, There is no common ground for Europe to Come together as one Nation. It's not going to happen.

As far as the spelling, lol, I guess my dictionary and spell checker must not be "English" lol

The debt burdens in europe are a result of the problems, which are (excepting Greece) massive deregulation of the financial industry. Two of the biggest problem countries, ireland and Spain, actually had very low national debt (30ish% of GDP IIRC) and budget surpluses going into the meltdowmn. now they're both effectively insolvent due to the debts they've had to take on from their banks due to their massive private sector market failure.

Your dictionary is American English, which is a very good and impressive version of the English language, but not English.

I don't Disagree with what you are saying, I just think you are Ignoring that underlying issues these counties have with Massive Entitlement programs that would be a problem with or with out the Euro Experiment. What the Lack of regulation of the Finance Industry has simply exacerbated the underlying problems.

 

[Raoul_Duke]

So, you don't think the Debt Burdens in Europe have anything to do with the Problems eh?

I actually agree with your point about their Centralized Currency. I said when the Euro Started that it was not wise to try and have a Central Currency with out a Strong Central Governing Body to control it. The supporters of the EURO hoped a Centralized Currency Hoped a shared currency would push Member states into giving up more sovereignty to the Central Government. They were wrong, There is no common ground for Europe to Come together as one Nation. It's not going to happen.

As far as the spelling, lol, I guess my dictionary and spell checker must not be "English" lol

The debt burdens in europe are a result of the problems, which are (excepting Greece) massive deregulation of the financial industry. Two of the biggest problem countries, ireland and Spain, actually had very low national debt (30ish% of GDP IIRC) and budget surpluses going into the meltdowmn. now they're both effectively insolvent due to the debts they've had to take on from their banks due to their massive private sector market failure.

Your dictionary is American English, which is a very good and impressive version of the English language, but not English.

I don't Disagree with what you are saying, I just think you are Ignoring that underlying issues these counties have with Massive Entitlement programs that would be a problem with or with out the Euro Experiment. What the Lack of regulation of the Finance Industry has simply exacerbated the underlying problems.

Ireland and Spain have massive entitlement programmes (like the spelling?) and were running budget surpluses and low levels of government debt before the meltdown -- it's quite possible to have a strong social safety net and good universal healthcare and still run a prosperous economy you know -- now they're effectively insolvent. The only real difference between America and Europe is Europe tends to have single payer healthcare systems and better unemployment benefits. but the single payer systems make their economys much more efficient as they cost a much smaller percentage of GDP and costs rise much slower than US healthcare.

 

[Toro]

I see Raoul has everything under control here.

First, Obama is not "spending money bailing out the European banks." That's just flat out wrong. This is the Federal Reserve, in coordination with other central banks, supplying dollars into the funding markets through dollar swaps to meet the demand for dollars so European banks can roll their dollar liabilities. A swap is not "spending money." It is a swap that supplies dollars now for euros to be reversed in the future. Zero dollars are spent out of the federal budget.

It is true that at its core, European banks are in trouble because they hold a mountain of crap sovereign debt on their balance sheet, caused by these countries having massive fiscal imbalances. But that is irrelevant now. Right now its a liquidity issue, not a solvency issue. (That's later.) A squeeze on dollar funding could cause a chain reaction, freezing up inter-bank lending over here. There is no reason to risk this. So the Fed is supplying dollars into the market, which they should.

 

[Toro]

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.

That's not what's happening. We are exchanging dollars for euros so European banks can meet their dollar liabilities. The central banks are doing this because there aren't enough dollars in the world. This is a liquidity problem, not a solvency problem.

The European banks will attempt to fund out their dollar liabilities into euros over the next few months.

 

[Mr.Nick]

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

Federal Reserve intercedes in Euro debt crisis | Dylan Ratigan

He's a globalist....

"Money" means nothing to these people....

They have no respect for the capitalist model, hence they have no respect for money.

 

[Quantum Windbag]

I see Raoul has everything under control here.

First, Obama is not "spending money bailing out the European banks." That's just flat out wrong. This is the Federal Reserve, in coordination with other central banks, supplying dollars into the funding markets through dollar swaps to meet the demand for dollars so European banks can roll their dollar liabilities. A swap is not "spending money." It is a swap that supplies dollars now for euros to be reversed in the future. Zero dollars are spent out of the federal budget.

It is true that at its core, European banks are in trouble because they hold a mountain of crap sovereign debt on their balance sheet, caused by these countries having massive fiscal imbalances. But that is irrelevant now. Right now its a liquidity issue, not a solvency issue. (That's later.) A squeeze on dollar funding could cause a chain reaction, freezing up inter-bank lending over here. There is no reason to risk this. So the Fed is supplying dollars into the market, which they should.

It does pose an enormous risk of inflation though, which is a negative.

 

[Toro]

I see Raoul has everything under control here.

First, Obama is not "spending money bailing out the European banks." That's just flat out wrong. This is the Federal Reserve, in coordination with other central banks, supplying dollars into the funding markets through dollar swaps to meet the demand for dollars so European banks can roll their dollar liabilities. A swap is not "spending money." It is a swap that supplies dollars now for euros to be reversed in the future. Zero dollars are spent out of the federal budget.

It is true that at its core, European banks are in trouble because they hold a mountain of crap sovereign debt on their balance sheet, caused by these countries having massive fiscal imbalances. But that is irrelevant now. Right now its a liquidity issue, not a solvency issue. (That's later.) A squeeze on dollar funding could cause a chain reaction, freezing up inter-bank lending over here. There is no reason to risk this. So the Fed is supplying dollars into the market, which they should.

It does pose an enormous risk of inflation though, which is a negative.

It doesn't increase the money supply QW. What's happening is that dollars are being withdrawn in Europe, so the Fed is supplying dollars into Europe and euros are being withdrawn. The swaps are for three months, I believe, and will be wound down like they were in 08.

European banks were funding themselves in the wholesale market, and the supply was coming from US money market funds. A few months ago, the Fed ordered the banks to reduce their lines to Europe because of concerns about the banks' assets, which has contributed to the crunch.