FREE WORLDVIEW MAG FREE WORLDVIEW RALLIES
Support World View Weekend

WHAT HAVE THE CENTRAL BANKS OF THE WORLD DONE NOW?



Posted: 11/30/11

What Have The Central Banks Of The World Done Now?

The central banks of the world are acting as if it is 2008 all over again. Desperate times call for desperate measures, and right now the central bankers are pulling out all the stops. The Federal Reserve, the European Central Bank, the Bank of England, the Bank of Canada, the Bank of Japan and the Swiss National Bank have announced a coordinated plan to provide liquidity support to the global financial system. According to the plan, the Federal Reserve is going to substantially reduce the interest rate that it charges the European Central Bank to borrow dollars. In turn, that will enable the ECB to lend dollars to European banks at a much cheaper rate. The hope is that this will alleviate the credit crunch which has gripped the European financial system by the throat. So where is the Federal Reserve going to get all of these dollars that it will be loaning out at very low interest rates? You guessed it - the Fed is just going to create them out of thin air. Our currency is being debased so that Europe can be helped out. Unfortunately, the impact of this move will be mostly "psychological" because it really does nothing to address the fundamental problems that Europe is facing. It is up to Europe to solve those problems, and so far Europe has shown no signs of being able to do that.

The major central banks of the world say that they want to "enhance their capacity to provide liquidity support to the global financial system." But essentially what is happening is that the Federal Reserve is going to be zapping large amounts of dollars into existence and loaning them out to the ECB very, very cheaply. Think of it as a type of "quantitative easing" on a global scale.

The decision to do this was reportedly made by the Federal Reserve on Monday morning. For the moment, this move seems to have stabilized the European financial system. It is quite unlikely that any major European banks will fail this weekend now.

But as mentioned above, this move does nothing to solve the very serious financial problems that Europe is facing. This intervention by the central banks is merely just a speed bump on the road to financial oblivion.

Most Americans are not going to understand what the central banks of the world just did, but it really is not that complicated.

The following is how CNN chief business correspondent Ali Velshi broke down what the central banks have done....

In an attempt to stave off the consequences of a global credit freeze, the Federal Reserve, in coordination with major central banks, has created a credit line available to those central banks, whereby they can borrow dollars at reduced interest rates for periods of three months. The central banks, in turn, can lend to commercial banks in their respective countries. This is meant to reduce the cost of short-term borrowing for troubled European banks and to give them immediate access to dollars.

This was done immediately after the collapse of Lehman Brothers as well, to alleviate the consequences of banks being largely unwilling to lend to other banks, even for short periods, for fear that the borrowing banks could fail.

Okay - so the Federal Reserve is loaning giant piles of cheap money to the European Central Bank.

So where in the world does all of that money come from?

As a CNBC article recently explained, all of this money is created right out of thin air by the Federal Reserve....

Neither the dollars nor the Euros come from anywhere. They aren't moved or debited from anywhere. They are invented right on the spot with a few taps on the key pad. And that's all. There's no printing press fired up to make new dollars or euros.

This is sometimes called "fiat money." But that makes it sound as if some command from a sovereign created the money. It's really closer to "keyboard money," since it is created by data entry in a computer.

Does that sound bizarre to you?

Click here for complete article:
http://theeconomiccollapseblog.com/archives/what-have-the-central-banks-of-the-world-done-now

Distributed by www.worldviewweekend.com

Disclaimer: Worldview Weekend, Christian Worldview Network and its columnists do not necessarily endorse or agree with every opinion expressed in every article posted on this site. We do however, encourage a healthy and friendly debate on the issues of our day. Whether you agree or disagree, we encourage you to post your feedback by using the feedback button.

906 Views

Printer Friendly Version | Return to home | Send this article to a friend

READER FEEDBACK


Post Feedback

Ebook Documentary
Special Video

Click Here to Watch Now


Limited Time
Special Offer:

Ebook + Hard Cover
Click Here for Details





Sign up to receive our
FREE Biblical Worldview Newsletter!

* Your Email Address:
* State: 
* Country:
   
for even MORE alerts sign up here
Bookmark and Share
Find us: Twitter / Facebook
Search Worldview Weekend:
Worldview Tube
Watch the latest commentary by Brannon Howse
Worldview Radio
Listen to the latest Worldview Weekend Radio with Brannon Howse
Roku Channel

iPhone/Android App

Worldview Weekend Online Academy for Students and Adults






Worldview Weekend
Family Reunion

Branson, Missouri
April 26, 27, 28, 2013

Worldview Weekend Radio
with Brannon Howse

Listen live to Worldview Weekend Radio with Brannon Howse M-F at 1-2 pm CT.





NEW! Visit Worldview Weekend.com on your mobile phone for latest news, audio and video!





Brannon Howse
Worldview Weekend
President and Founder
Find us on Twitter and Facebook!
Contact Us
Copyright © 2010 Worldview Weekend.com