ZeroHedge: Fed's QE2 money-printing "stimulus" was stealth European bank bailout

ZeroHedge ^

[quesney]

In summary, instead of doing everything in its power to stimulate reserve, and thus cash, accumulation at domestic (US) banks which would in turn encourage lending to US borrowers, the Fed has been conducting yet another stealthy foreign bank rescue operation, which rerouted $600 billion in capital from potential borrowers to insolvent foreign financial institutions in the past 7 months. QE2 was nothing more (or less) than another European bank rescue operation!

[quesney]

When does this end? 2012 might be too late.

[Eric in the Ozarks]

Monstrous !

[Buckeye McFrog]

Clearly Barry has chosen the interests of George Soros over the interests of his 300 million constituents. Tells you all you need to know.

[quesney]

One of the interesting comments (basically, a global Ponzi Scheme is unraveling):

Maybe foreign banks, particularly EU banks, are feeling the 1 - 2 punch of collapsing MBS foolishly purchased from the squid and collapsing bonds foolishly purchased from PIIGS.

Thet’ye close to insolvecy now, maybe already insolvent, something’s gotta be done, can’t go back against PIIGS without collapsing the Euro, so they threaten Bernanke they’ll all dump their MBS at the same time (they’re worthless anyway), taking the Fed, Fannie, and Freddie down with them.

So Bernanke folds, handing mountains of digital cash to them ...which of course debases the dollar further.

There’s simply not enough wealth in the world to keep feeding hundreds of TBTF banks around the world to make up for hundreds of trillions of collapsing bond values.

There’s just too damn much debt paper around the world, and it’s all collapsing now.

Sure, they can print currency till it fills the oceans and bail out everybody’s collapsing balance sheet.

But they can’t print wealth, and those oceans of currency chasing limited wealth dilutes those oceans of currency to worthless toilet paper.

And yes those damn bankers will keep printing currency and bailing each other out till every damn currency around the world is worthless and the whole damn worldwide financial system collapses, then every damn government around the world collapses, then every damn nation around the world collapses.

[ilovesarah2012]

And congress knew nothing about this?

[Wolfie]

When so many of your corporate masters are trans-national and owe nothing to the U.S. in particular, they depend on those foriegn banks, and you damn well better bail them out.

[Piranha]

This may be the most important article I’ve read in months.

The information in this article leads to the best theory I’ve been able to piece together about why Geithner repeatedly warns that the failure to raise the debt ceiling with no conditions will lead to the dollar’s collapse: he knows it’s about to happen this summer and he’s setting the table to blame the Republicans.

[Melchior]

One of the scariest articles I have read in a long time.

[Uncle Ike]

” But they can’t print wealth, and those oceans of currency chasing limited wealth dilutes those oceans of currency to worthless toilet paper. “

You mean “money” is NOT the same thing as “wealth”????

Hold the rest of the calls - I think we have a winner, here....

[cowtowney]

Yes
2012 will be too late

[Sgt_Schultze]

I’m ready to repudiate US Treasury debt obligations held by the Federal Reserve.

[Uncle Ike]

” 2012 will be too late “

It became ‘too late’ on October 3, 2008....

(To save wear and tear on Google - that’s the day that Pres. Bush signed TARP into law....)

(”We have to violate Free Market Principles in order to save them...”

[PGalt]

DEFUND all socialist collectives. Eliminate the FED. Imprison Bernanke.

[M-cubed]

And yes those damn bankers will keep printing currency and bailing each other out till every damn currency around the world is worthless and the whole damn worldwide financial system collapses, then every damn government around the world collapses, then every damn nation around the world collapses.<<<

and that my FRiend is how we get to 1 world government where we all become slaves to the “elite”....Can U think of a better way??????

[DaxtonBrown]

Please, is there someone here smart enough to debunk tis article? Otherwise I’m going to crap my pants.

[expatpat]

In an indirect sense, QE2 may be trying to save US banks. A great deal of the bad EU loans at EU banks are hedged by CDS's from US banks. In other words, the bad loans are insured by the US's own brilliant bankers, who stand to lose a ton of $ if the EU loans default.

[TexasFreeper2009]

Seriously, congress needs to outlaw this and make it mandatory for the fed to get permission from congress to take such actions.

[Former Proud Canadian]

Good post, but do you think EVERY currency will collapse? Norway? Germany? Switzerland? Australia? Canada? Are there no safe havens?

[Cobra64]

When is the DOW going to crash?

[A Strict Constructionist]

It’s time we put the FED and WS on a very short leash, with a choker collar. I prefer them in the soup line instead of me.