Inter-galactic bailout?! The Fed reaches beyond borders
According to some reports, the U.S. Federal Reserve plans to bail out Europe by adding cash from the International Monetary Fund. What next?
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Not only that, collapse of European economies would kill world trade. Exporters would be out of business. Importers would be out of money. The whole planet would be out of luck. The crisis would make its way around the world like a giant tsunami…wiping out stock markets immediately…and then swamping almost all economies.Skip to next paragraph
Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning (dailyreckoning.com).
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Yes, dear reader…this is the downside of globalization.. One region’s problem can easily become a disaster for everyone.
So, what’s going to happen? We wish you wouldn’t ask us questions like that, dear reader.
But we’ll take a guess.
The European situation is more dangerous than most Americans realize.
It could still melt down. US authorities must know this. And they must know too that if Europe melts down, so will the USA.
So, the rumors will probably turn out to be true. The US will back the IMF. The IMF will back Europe. Europe will back Ireland. Ireland will back its banks. And the banks will back their lenders.
Meanwhile, the euro will be backed by the dollar, which will also back the US economy, US banks, the US government, and about half the households in Christendom…not to mention the others!
Who’s got the kind of money you need to do all this backing?
Ah…there’s the rub… There’s the weak link in this strange and magical chain.
Let’s see, if all the world’s debts are guaranteed by paper money…isn’t the paper money itself impaired by the amount of the losses? Won’t the losses be passed along to dollar holders everywhere?
Yes. But, no one knows how much the losses are. And no one knows how much extra “stimulus” money the feds are going to put out. And no one knows when people will get scared and flee the dollar…the euro…and all paper currencies. And no one knows what a panic out of the dollar would produce. And no one wants to find out.
So, what’s the solution? We won’t bother to offer a solution to the world’s financial authorities. They won’t pay any attention anyway.
But how about a solution for you? Did you buy gold when we suggested it, dear reader?
We hope so.
And more thoughts…
The New York Times tells us that astronomers had seriously underestimated the number of stars in the universe. They can’t see the little ones. Which means, their last count was probably a few trillion off. Or maybe a few gazillion off.
Which suggests to us that astronomers and federal debt analysts must be using the same calculators. Both are trillions off the mark.
But the reason we bring this up is to give dear readers hope. Maybe…circulating around one of these invisible stars…a few billion light years away from earth…is a habitable planet. And maybe, the people who live there are very good with figures…and money. And maybe they’re also very accomplished space travelers. And very generous.
And maybe they’ll show up – any time now – and offer to bail out the whole Milky Way …if not the whole universe.
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