We took a big step toward nationalization this weekend as the Federal Reserve and Great Britain decided to inject taxpayer money into the banking system to stabilize things, emphasis mine.
Before markets opened in Europe, a statement from the Federal Reserve in Washington said that it, along with the Bank of England, the European Central Bank and the Swiss National Bank would provide funds at a fixed interest rate in advance of each operation â€œagainst the appropriate collateral in each jurisdiction.â€
The Federal Reserve said it would increase its swap lines with those central banks â€œto accommodate whatever quantity of U.S. dollar fundingâ€ institutions demand. The Bank of Japan was considering joining the plan, the Federal Reserve said in a statement. [via NY Times]
This bailout plan is probably going to work but it will come at the expense of the US Dollar and a lot higher inflation.
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