Sept. 29 (Bloomberg) — The Federal Reserve will pump an additional $630 billion into the global financial system, flooding banks with cash to alleviate the worst banking crisis since the Great Depression.
The Fed increased its existing currency swaps with foreign central banks by $330 billion to $620 billion to make more dollars available worldwide. The Term Auction Facility, the Fed’s emergency loan program, will expand by $300 billion to $450 billion. The European Central Bank, the Bank of England and the Bank of Japan are among the participating authorities.
The Fed’s expansion of liquidity, the biggest since credit markets seized up last year, came hours before the U.S. House of Representatives rejected a $700 billion bailout for the financial industry. The crisis is reverberating through the global economy, causing stocks to plunge and forcing European governments to rescue four banks over the past two days alone.
I was watching this news well before the market opened, and watched the futures tanking through the night. After the opening bell (and before the impasse was made public), the indexes were already quickly decending as did the overseas markets.
They are trying to blame the “record drop in the markets” on the Republicans who voted against the bailout. This is not true.
With all due respect, $700 billion would literally vaporize into thin air within a few weeks, and taxpayers would be that much poorer.
If I believed this would actually save our economy, even I would vote for it; but it will not help our economy nor assist anyone who will need a job in the next few months/years.
Let’s keep up the good work and keep calling our representatives (also might help if we called the guard dogs who kept this from passing…they need to be made aware of our support, too).
