Thursday, October 30, 2008
Ben on his Hind...
(From an email conversation earlier today)
Back to the swap line problem.
The swap lines world wide are now over 522Bln. This is the ECB (and
now many others, like Brazil and Mexico) borrowing unsecured from the
U.S. in order to stave off deflation. Who knows what the process is
for granting these swap lines.
its the old-fashioned external debt problem and I don't expect some of
these funds to return (especially in ECB dollar funding to Eastern
European countries...plenty of room for outright fraud there as
regional banks give sweetheart loans to their future business
A massive transfer of wealth with no congressional approval, as I have
stated before. Forget lower interest rates, this is Ben Bernanke on a
Hind Helicopter, strafing the world with dollars. And why unlimited
lines for the Euro area alone, which in my mind now has the biggest
incentive to break up the Euro and simply keep the dollar wealth.
If/when, BHO takes office, I expect these types of facilities to be
extended to sub-saharan African banks, not with any "systemic risk to
the financial architecture" argument, but on any grounds the Executive