Busted: Bankers and The Global Economy

July 30, 2008

Federal Reserve Installs More Confidence

Rhetoric aside, tough times are clearly ahead in the eyes of the U.S. Federal Reserve system. Not one to be outdone, the Fed has moved to expand and strengthen confidence in the U.S. financial system.

The Fed is adopting longer terms for banking institution loans through its lending provisions. Since other central banks are involved in the economic bailout, the European Central Bank and the Swiss National Bank are “adapting the maturity of their operations” as well.

In the words of the Federal Reserve, “continued fragile circumstances in financial markets” continue to exist. Federal Reserve provisions would be withdrawn should the FOMC Board decide that “conditions in financial markets are no longer unusual and exigent.”

Provisions include:
1. Extension of the Primary Dealer Credit Facility (PDCF) and the Term Securities Lending Facility (TSLF) through January 30, 2009.
2. The introduction of auctions of options on $50 billion of draws on the TSLF.
3. The introduction of 84-day Term Auction Facility (TAF) loans as a complement to 28-day TAF loans.
4. An increase in the Federal Reserve’s swap line with the European Central Bank to $55 billion from $50 billion.

~ E. Manning

May 7, 2008

Central Bankers Sound Alarm Over Food Prices

Soaring food prices are helping to push up inflation all around the world, say central bankers. They urge more market competition and free trade to even out prices.

Which came first: the chicken or the egg? In this case, central bankers are not admitting that high food prices are not only caused by tighter supplies but higher inflation is caused by the central bankers themselves. Central bankers, by nature are quiet animals that never point at themselves. In this instance, global inflation has been boosted by the excessive printing of money and overextension of bank credit coupled with the inflation and devaluation of the dollar, which still operates as the tour de force of the global economy.

Global rises in food, energy and other commodity prices (more…)

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