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I Smell a New York Rat

What the hell?! I woke up and wondered how markets around the world were finding some way to rebound. It looks like the Fed has figured out a way to get all $700B without congressional approval. Excerpted from the NYT here:

With money markets around the world seizing in fear, the Fed on Monday announced that it would provide an extra $150 billion through an emergency lending program for banks, and an additional $330 billion through so-called swap lines with foreign central banks to help money markets from Europe to Asia.

That was on top of the $230 billion the Fed borrowed last week so it could finance its previous efforts to prop up the American International Group and other institutions.

In other words, either the money is completely and totally funny money, or they just flat out stole it. Which one it turns out to be probably depends on the reaction of the people they lifted it from.

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September 30, 2008 - Posted by | Death Notice, observational humor

2 Comments

  1. Oh shit! – as they say.

    Comment by Anthony Paul Smith | September 30, 2008

  2. The Fed has a printing press (or rather, the Treasury department has the printing presses). They didn’t steal it, they created it. The amounts may be (much) larger than usual, but this has been standard procedure ever since we went off the gold standard. The Fed also has no problem borrowing money – it’s real interest rates right now are actually negative (investors essentially pay the Fed additional money to take their money at the moment). The scale is larger, but the Fed was set up precisely to do this type of thing.

    Comment by burritoboy | September 30, 2008


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