May 10 (Bloomberg) -- The U.S. Federal Reserve will restart its emergency currency-swap tool by providing as many dollars as needed to European central banks to keep the continent’s sovereign-debt crisis from spreading.
The swaps with the European Central Bank, Bank of England and Swiss central bank, as well as the Bank of Japan, will allow them to provide the “full allotment” of U.S. dollars as needed, the Fed said late yesterday and today in statements in Washington. A separate swap line with the Bank of Canada will support as much as $30 billion, the Fed said. The swaps were authorized through January 2011.
The Fed action was a complement to European policy makers’ announcement of an unprecedented loan package worth almost $1 trillion to stop a crisis that threatened to shatter confidence in the euro. The U.S. central bank on Feb. 1 had closed all swap lines opened during the last crisis, triggered by the subprime- mortgage meltdown in 2007.
http://www.bloomberg.com/apps/news?pid=20601087&sid=amiI5qIW8gDIWhere does all that wonderful money come from?
One ponzi scheme swaps to support another ponzi scheme!
When the crash occurs, the whole world will be Bernie Madoff. Grab your ankles folks, we're hosed!
First is was bad loans. Now we a swapping the USD for a declining EURO.
Just Brilliant!I say equal exchange for Dollars and Beer.That euro there soon will worthless.Waste of time. Eurobanks are refusing to lend, even to each other. Now the Fed steps in and becomes yet another place for them to park their cash for an overnight rate of return.The Fed said today it's not at risk of any losses on the swaps, because the ECB European Central Bank) is obligated to repay the dollars the Fed provides at the same exchange rate.
Somehow this just doesn't give me the warm fuzzies. GTO Say your Peace now...........
