Here We Go Again

From Reuters: Federal Reserve statement on financial liquidity measures
The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing coordinated actions to enhance their capacity to provide liquidity support to the global financial system.
The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity.
These central banks have agreed to lower the pricing on the existing temporary U.S. dollar liquidity swap arrangements by 50 basis points so that the new rate will be the U.S. dollar overnight index swap (OIS) rate plus 50 basis points.
This pricing will be applied to all operations conducted from December 5, 2011. The authorization of these swap arrangements has been extended to February 1, 2013. In addition, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank will continue to offer three-month tenders until further notice.
As a contingency measure, these central banks have also agreed to establish temporary bilateral liquidity swap arrangements so that liquidity can be provided in each jurisdiction in any of their currencies should market conditions so warrant.

My view:

In true Keynesian fashion, the masters of the universe are once again offering liquidity to the global financial system.

The fact that we have a solvency problem seems to continually evade them.

Another day, another band-aid brought to you at tax payers expense by your friendly neighborhood central bank..

Have you purchased gold yet?


  1. To Keynesians more money printing is never enough. When it doesn't work out the 'solution' is just print more!

    I pray that the dustbin of history heeds it call and consigns this cargo-cult to oblivion, before it destroys us all.


  2. Thank you for your comment John.

    My hope too is that rational thought will prevail.

    In the meantime, physical gold looks better all the time.


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