With Obama’s apparent strategy leaning towards exploring every single way to collapse the United States, it isn’t a surprise that we are bailing out Europe. Ah, all the wonderful leftists love to crow about this or that European fashion, ridiculous pensions, life time employment, huge bureaucracies, nanny state, check, check, check, check and check, leftists in the US want all of that! Don’t worry though because it is the rare conservative indeed who will speak out against the “safety net” indeed finding a so-called right wing politician who will admit forthrightly that he intends to cut spending is akin to finding a leftist questioning the idea that someone’s “needs” trumps my freedom. (This makes Conservative NJ Governor Chris Christie a real up and comer and Ron Paul a saint) We are going straight to hell and the goddamn hand basket is in flames! Anyways Zero Hedge as usual is all the way around the story. Really if you aren’t reading Zero Hedge, The Market Ticker ®, Financial Armageddon, Calculated Risk, Dollar Collapse and a few others then all of what is happening is a big ass shock to you. Being surprised is only fun for your birthday.
We are rapidly approaching a point where it simply won’t matter whether the politicians and their needy minions want to cut this or that “safety net”…we have outgrown our ability to pay for all we have promised. As economist Robert Samuelson points out in a recent article we are witnessing the Welfare State’s Death Spiral. And this European Bailout is the sort of dumb move, that will accelerate our final reckoning. What is hilarious and indicative of Obama’s desire to destroy this country is that at the VERY the same time we rushing to adopt all of the sorts of policies that put Europe in that position. Weee!
Well guess what: with about $500 billion in liquidity swaps about to hit the asset side of the ledger (that’s a conservative estimate based on the last time the Fed went full bore on bailing out Europe, and sorry, that European bailout does not come cheap), Excess Reserves (fed liabilities) are about to skyrocket by a comparable amount to match the assets. And here is the double whammy: $500 billion in new excess reserves earning 0.25% for holder banks, means US banks are about to earn an additional $1.25 billion a year risk-free courtesy of US taxpayers, who already are getting the shaft by paying more for gas thanks to the privilege of having bailed out Europe and drowned the world in new and unprecedented gobs of excess liquidity! Simply stated, the Greek “bailout” is a roundabout way of funneling over another extra billion to US banks! Direct cost to US taxpayers to bailout Europe via IMF: $50 billion; Indirect cost to fund incremental bank excess reserves: $1.25 billion; The joy of being raped daily by the Fed-Wall Street complex and assuring another year of record Wall Street bonuses: priceless. Some things money can’t buy. For everything else there are trillions in Federal Reserve Notes appearing each and every day out of thin air. Fed Pretends It Is Preparing To Soak Up Excess Reserves, Even As Currency Swaps Are Sure To Add About $500 Billion To Fed’s Assets | zero hedge (emphasis mine)