Skip to comments.US taxpayers could be on hook for Europe bailout
Posted on 09/16/2011 2:21:38 PM PDT by BradtotheBone
The U.S. is coming to Europe's financial rescue.
So far, America's role is fairly limited. But if the crisis continues to grow and the U.S. takes on a wider role, U.S. consumers and taxpayers could feel a bigger impact. The biggest exposure could come from America's status as the single largest source of money for the International Monetary Fund.
The latest round of American financial assistance came Thursday with a promise by the Federal Reserve to swap as many dollars for euros as European bankers need. In the short run, those transactions won't have much impact because the central banks are simply swapping currencies of equal value. If the move helps avert a wider crisis, it could help spare the global economy from another recession.
But over the long term, consumers could feel the impact of central bankers flooding the financial system with cash, according to John Ryding, chief economist at RDQ Economics.
"This is a lender of last resort function," he told CNBC. "With the dollar injections that the Fed has done, it's like giving a patient medicine with really bad side effects." Ryding said the bad side effect in the U.S. has been inflation, which has picked up to 3.8 percent year over year.
Fed policymakers meet next week to decide whether the flagging U.S. economy needs another round of easy-money measures that could include buying more Treasury bonds to push more cash into the financial system.
So far, no one has floated publicly the idea of the U.S underwriting a broader bailout of the European financial system. But Senate Republicans have already voiced concerns over such a move.
(Excerpt) Read more at bottomline.msnbc.msn.com ...
How’s that ‘audit the fed’ bill coming along?
Federal Reserve Audit Uncovers Secret Foreign Bailouts
In one year, Fed officials offered indiscriminate loans of $16 trillion to a host of European banks, as well as Wall Street titans like CitiGroup, Bank of America, and Goldman Sachs. The GAO found that 65 percent of those emergency loan handouts went to foreign companies and banks.
and the beat goes on...
Limited hell, trillions of debt is not limited.
Bernake has some ‘splainin to do.
It’s getting closer and closer to Tar and Feather Time in old Dee-Cee.
Noone axed me about this. I didn’t sign up to bail them out.
(I can't say what I'm really thinking!)
Equal value? The Euro has been dropping as of late - it all depends upon who is printing the most - and fastest.
Like trading ice cubes in the summer time.
It's time for trials and hangings on the Capitol steps.