I have learned that watching what people do is much more important
than listening to what they say. Back in 2008, financial authorities in
the United States insisted that everything was gone to be okay. But we
all know now that was a lie. Well, right now financial authorities in
the U.S. and Europe are once again trying to assure us that everything
is under control and that we are not headed for a global recession. Unfortunately, their actions are telling a very different story. All
over the world, bailouts are flying around as if the end of the world is
coming. Governments and central banks are stepping in with gigantic
mountains of money to prop up bond yields, major banks and even stock
markets. What we have seen over the past few months has been absolutely
unprecedented. So why are such desperate measures being taken if
everything is going to be just fine? Unfortunately, debt problems are
never solved with more debt, so these bailouts really aren't solving
anything. We are still headed for a massive amount of financial pain. It would just be nice if the authorities would quit lying to us and
would actually admit how bad things really are.
Today it was announced that the European Central Bank has agreed to make $638 billion in 3 year loans to 523 different banks. Never before (not even during
the last financial crisis) has the ECB loaned so much cheap money to
European banks at one time.
This move by the ECB made headlines all over the globe. CNBC is calling them "ultra-long and ultra-cheap loans".
European authorities are hoping that European banks will use this
money to make loans to businesses and to buy up the debt of troubled