Moral Outrage
Whew! God help us!

Central Banks move to ease debt crisis

Major Central Banks around the world have announced a program of coordinated action designed to support the global financial system. The European Central Bank, the US Federal Reserve, the Bank of England and the Central Banks of Canada, Japan and Switzerland are all taking part in the initiative.

The possibility that one or more European governments might default on loan payments has raised fears of a shock to the global financial system that would lead to severe losses for banks, recessions in the US and Europe, and a stranglehold on lending. And a ratings downgrade by Standard & Poors for six major US banks on Tuesday added to fears that Europe’s woes would hurt the global financial system.

Fears of more financial turmoil in Europe have already left some European banks dependent on Central Bank loans to fund their daily operations. Other banks are wary of lending to them for fear of not getting paid back.

The Central Banks agreed to reduce the cost of temporary dollar loans they offer to banks, called liquidity swaps, by a half percentage point. It will be now cheaper for banks to buy US dollars, which will ultimately help businesses and households access finance more easily.

Non-US banks need dollars to fund their US operations and to make dollar loans to companies that need the US currency.

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2 Responses to “Central Banks move to ease debt crisis”

  1. This coordinated plan lower prices on dollar liquidity swaps beginning on Dec. 5, and extending these swap arrangements to Feb. 1, 2013.

    A swap takes place when the Fed provides U.S. dollars to a foreign central bank in exchange for the equivalent amount of foreign currency from that central bank.

    The six central banks also created a temporary mechanism, making it easier for them to exchange their foreign currencies — not just U.S. dollars. That tool gives any of these central banks easier access to euros, Japanese yen, British pounds, Swiss francs and Canadian dollars should they need those currencies to assist their region’s banks in the event of a crisis.

  2. In America: governments, businesses, individuals are now buried under a mountain of debt. A mountain of debt that will never be repaid.

    Who will borrow when they can’t make the payments on the debt that they have already? The math alone calls for a system reset, a debt jubilee.

    Investors are already losing… in a rigged monetary casino that rewards usury, speculation, and currency manipulation while looting main street.

    There is a moral principle that debts should be honored. That is, debts between businesses that buy and sell real products, not bundled ponzi schemes, debts between individuals, between friends and businesses that know each other to be rational and moral, debts based on investments where there is a rational expectation of return.

    There is also a moral principle that unjust debts should be cancelled, and usury legislated against. Debts that are ‘odious’, debts based on fraud, debts to dictators, debts arranged by oligarchs without the consent of the general population (the 99 percent who have been left out of the equation), debts based upon compound interest upon compound interest, that should have been written off long ago, the debts need to be cancelled in a general jubilee. Think outside the box. It’s time for a jubilee.


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