Thursday - December 02, 2010

Is the U.S. set to be dragged into Europe’s financial troubles? Euro soars on rumor.

We no longer live in a world where we can isolate ourselves and pretend we aren’t affected by outside influences.  I wish that were not so.  I wish we could actually build a wall around ourselves and tell the rest of the world to buzz off. Being me of course I’d use cruder terminology. And I very definitely do not want to be the world’s policeman.  I do not care how China treats its people in its own back yard. I don’t care what Putin and Russia do so long as it doesn’t cause problems for the USA.  If I get PO’d when outsiders stick their nose in our internal affairs, I can hardly be surprised when others get a nose out of joint when we do the same.  But okay .. the world is connected as it has never been before.  We have enemies the likes of which we have not known in the past. At least not to the degree we now face.  So we are indeed connected, like it or not.

Which leads me to .....

Don’t be coy and don’t misrepresent this story. The US has already contributed to the fund and even more than that, it stopped the slide of the Euro during the Greek crisis through Currency Swaps. The ECB needed US Dollars to buy up the bonds the PIIGS were issuing, that the capital markets were rejecting. Without the Swaps the Euro would have fallen to who knows where, leading to much higher costs for Europeans to bail out the PIIGS. The reason the US Fed did this was to protect the Trillion dollar investments US banks have in the PIIGS alone. When Trichet spoke of the possibility of buying bonds from the PIIGS today he was signaling a further round of Currency Swaps between the ECB, the BoE and other foreign Central Banks. If all you great Brits are ignorant of what Currency Swaps are, look it up on Wikipedia, they explain it simply enough for you to understand.

- Jeff, Boulder, CO USA, 02/12/2010 00:53

We can’t save ourselves. We are headed the same way. If we aren’t working we aren’t paying taxes, and if we aren’t paying taxes our government has to print money that isn’t worth what people expect of it--so if we write Europe a hot check for aid, what will come of it for all of us?

- Sheri, OKC, Oklahoma, USA, 02/12/2010 02:52

The title of this story is very misleading - it should be the opposite way around. Europe was dragged into the US’s financial troubles when our greedy bankers invested in the US sub-prime mortgage market. The sub-prime mortgage fiasco was essentially that US financial institutions were pressured into lending mortgages to people with low credit ratings. Many then went on to default and the rest is history. Those who set this in motion were of course on the Democrat-Left and included the ‘Clintonistas’ and the soon to be President Mr Obama himself.
All part of the ongoing destruction of the West by the Liberal-Left. By the way the US National Debt is nearly $14 Trillion - and they’re going to bail us out via the IMF? Don’t make me laugh.

- A Richards, London, England, 02/12/2010 01:37

So just what are these people commenting on?  Well, the morning news here at 7am UK time.  See what you think of all this. And is the USA going in deeper? 

Is the U.S. set to be dragged into Europe’s financial troubles? Euro soars amid claims America will support IMF bailout

By Daily Mail Reporter

Last updated at 4:05 AM on 2nd December 2010

The euro soared today after a report that the U.S. would support a larger aid package for Europe through the International Monetary Fund.
In midday trading in New York, the euro traded at $1.3140 from $1.3011 late Tuesday. It popped by more than one cent immediately after the report came out.
Reuters reported at midday that an unnamed U.S. official said the U.S. would be willing to have the International Monetary Fund give more money to the European Financial Stability Facility.

The U.S. is the IMF’s biggest stakeholder.
The EFSF is a 440billion euro fund the Europeans put together as part of a broader 750billion euro rescue package in May during the Greek debt crisis.
The IMF has already pledged up to 250billion euro.  The Obama administration would not comment on the report.

Treasury Secretary Timothy Geithner did dispatch Treasury Undersecretary Lael Brainerd, Treasury’s top official on international matters, for talks with European officials. Mr Brainerd had meetings in Madrid with economic officials on Wednesday and was scheduled to be in Berlin on Thursday and Paris on Friday.

The U.S. ‘can’t afford to let Europe implode,’ said David Gilmore of Foreign Exchange Analytics.
But the statement might not mean that the U.S. has already agreed to a deal allowing the IMF to contribute more money or ponying up more money for Europe itself.

One possibility is that the Americans are ‘flying a kite to the Europeans to push them in the direction of increasing the stability fund,’ Mr Gilmore said.
The euro has fallen 10 per cent since early November as Ireland, after Greece, accepted billions in emergency financing. Investors now worry Portugal may be next, or even Spain.

Spain, due to the size of its economy, would be a much greater financial burden that the other countries should it require a bailout.
A spokesman for the EU’s monetary affairs chief Olli Rehn said he had not heard of talks about extending the EFSF fund.

SOURCE

Posted by peiper     on 12/02/2010 at 02:15 AM   
Filed Under: • Economics • International • USA •  
• Comments (0) • Trackbacks(0)  Permalink •  

DISCLAIMER

THE SERVICES AND MATERIALS ON THIS WEBSITE ARE PROVIDED "AS IS" AND THE HOSTS OF THIS SITE EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, TO THE EXTENT PERMITTED BY LAW INCLUDING BUT NOT LIMITED TO WARRANTIES OF SATISFACTORY QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE SERVICE OR ANY MATERIALS.

Not that very many people ever read this far down, but this blog was the creation of Allan Kelly and his friend Vilmar. Vilmar moved on to his own blog some time ago, and Allan ran this place alone until his sudden and unexpected death partway through 2006. We all miss him. A lot. Even though he is gone this site will always still be more than a little bit his. We who are left to carry on the BMEWS tradition owe him a great debt of gratitude, and we hope to be able to pay that back by following his last advice to us all:

1. Keep a firm grasp of Right and Wrong
2. Stay involved with government on every level and don't let those bastards get away with a thing
3. Use every legal means to defend yourself in the event of real internal trouble, and, most importantly:
4. Keep talking to each other, whether here or elsewhere

It's been a long strange trip without you Skipper, but thanks for pointing us in the right direction and giving us a swift kick in the behind to get us going. Keep lookin' down on us, will ya? Thanks.

THE INFORMATION AND OTHER CONTENTS OF THIS WEBSITE ARE DESIGNED TO COMPLY WITH THE LAWS OF THE UNITED STATES OF AMERICA. THIS WEBSITE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE UNITED STATES OF AMERICA AND ALL PARTIES IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE AMERICAN COURTS. IF ANYTHING ON THIS WEBSITE IS CONSTRUED AS BEING CONTRARY TO THE LAWS APPLICABLE IN ANY OTHER COUNTRY, THEN THIS WEBSITE IS NOT INTENDED TO BE ACCESSED BY PERSONS FROM THAT COUNTRY AND ANY PERSONS WHO ARE SUBJECT TO SUCH LAWS SHALL NOT BE ENTITLED TO USE OUR SERVICES UNLESS THEY CAN SATISFY US THAT SUCH USE WOULD BE LAWFUL.

Copyright © 2004-2015 Domain Owner