Fed saves Europe's banks....AGAIN.

Let's get this straight....citizens need to use their nations borrowing power to borrow money from banks to lend back to the bank so the banks can lend money to the people?

It all makes perfect sense.

9:01PM GMT 30 Nov 2011
The interwoven banking and sovereign debt crisis in the eurozone has become so dangerous for the world that the US Federal Reserve has been forced to take emergency action, acting as global lender of last resort to shore up Europe's banking system.

That it should have to do so as Germany and the European Central Bank hold back for legal reasons and refuse to commit decisive power adds a strange diplomatic twist.

The move came once it was clear that Europe's prostrate banks would struggle to roll over $2 trillion (£1.3 trillion) of debts denominated in dollars. Data from ratings agency Fitch shows that US money markets have slashed funding for French banks by 69pc and German banks by 50pc.

Strains have been ratcheting up over the past two weeks. European banks are mostly shut out of the dollar market, or only able to raise money for a week at a time.

The so-called "stress alarm" – the euro/dollar three-month cross currency basis swap – spiralled down to minus 166 points early on Wednesday, uncannily like the last days before the Lehman crisis metastasized in October 2008.
Could it possibly be that darkbeaver has been right all these years? His naysayers will gird their loins in sackcloth.
Ron Paul FTMFW!

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