Article

2009-10-20 Economy

How The Federal Reserve Bailed Out The World

Archived material is restricted to Rantburg regulars and members. If you need access email fred.pruitt=at=gmail.com with your nick to be added to the members list. There is no charge to join Rantburg as a member.

Posted by tipper 2009-10-20 09:36|| || Front Page|| [4 views ] Top

#1 that's an article that needs a summary :-)

Posted by Jumbo Slinerong5015 2009-10-20 14:15|| 2009-10-20 14:15|| Front Page Top

#2 Foreigners were about to lose their shirts bankrolling the US housing industry's Ponzi scheme. The Fed bought their shirts at a slight. A foreigner could then go and buy another shirt. Now the Ponzi scheme can keep going a little longer.

Posted by Maggie Ebbuter2991 2009-10-20 15:02|| 2009-10-20 15:02|| Front Page Top

#3 In a nutshell, banks globalized their lending and much/most that cross border lending was in USDs and backed by USD securities (including mortgage backed securities). When the financial crisis hit there was a huge demand for USDs to settle the many USD denominated liabilities, while banks were hoarding USD cash.

Exactly the same thing happened in the USA.

It then goes on to discuss improper pricing and hedging of risk. The cause of the financial crisis in the first place.

'Bailed out' is a misleading term. What the Fed did was provide sufficient liquidity (moreorless cash) for the world's banking system. Which is its function for the US banking system. And if you think that having the USD as the world's reserve currency is a good thing (which I don't) then the Fed must do the same for the world's banking system in order for the system to work.

Posted by phil_b 2009-10-20 21:20|| 2009-10-20 21:20|| Front Page Top

23:54 Anguper Hupomosing9418
23:44 Jumbo Slinerong5015
23:24 ExtremeModerate
23:15 Jumbo Slinerong5015
23:09 gorb
23:07 gorb
23:04 gorb
23:03 gorb
23:01 gorb
22:59 linker
22:55 USN, Ret.
22:18 Remoteman
22:09 linker
22:08 tipper
21:58 Frank G
21:50 Redneck Jim
21:45 Plastic Snoopy
21:43 Chuck Simmins
21:40 Pappy
21:36 KBK
21:34 Helmuth, Speaking for Grerelet4852
21:31 phil_b
21:30 Helmuth, Speaking for Grerelet4852
21:28 Pappy