Chronicles Of Depression 2.0: #275: Euros

Banks flood Europe with cash
EU’s central bank launches special operations, Bank of England enacts $10B tender, Swiss National Bank offers auction at 1.85% to stem trouble.

FRANKFURT, Germany (AP) — The European Central Bank said Monday it launched a special operation to provide more cash to banks in the euro zone as the financial meltdown’s tendrils enveloped banks in Britain, the Benelux and Germany.

At the same time, the Bank of England launched a $10 billion overnight tender Monday which was oversubscribed by more than $3 billion by 10 bidders, indicating demand for credit exceeded supply.

In Zurich, the Swiss National Bank said it had offered markets a one-week auction at 1.85% and would continue to provide liquidity in a “generous and flexible manner,” its standard communication, without further details.

Emphasis added by me.

In a normal world, banks lend money to one another all the time. This is how the credit market works.

In this abnormal world, banks now refuse to lend to one another and are borrowing money from all of us.

Do you think the government is watching as closely as it needs to, in order to model the consequences to all of us if bank after bank fails with no funds to repay?

Stop and think about what is going on here.

We are simultaneously bailing out the greedy bastards to save our own necks while tightening the noose around our own necks!

This is absolutely upside down.

In the next iteration of the financial markets, value must flow from the bottom, not from the top.

I’m reminded of a passage from a book I read ten years ago, Global Squeeze: The Coming Crisis for First-World Nations by Richard C. Longworth:

What is the purpose of an economy? If it is not solely for the well-being of the people who live within it, what is an economy for?

Emphasis added by me.

So, what is the purpose of an economy?

Explore posts in the same categories: Bank Collapse Watch, C.O.A.T. - Belief, C.O.A.T. - Money, C.O.A.T. - Politics, C.O.A.T. - Scams, C.O.A.T. - Self-Defense, Depression 2.0, Uncategorized

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