Covert QE Begins in Europe

Posted by Brittany Stepniak - Tuesday, January 17th, 2012

The Fed and central banks are off to a questionable start this year...

Quantitative easing has already begun in Europe. And they've got the U.S. to thank for the bail out.

"Essentially, we just bailed out Europe’s banking system with the full faith and credit of the United States" according to the New York Post's Jonathon Trugman. He goes on:

"Most Americans associate a covert action with the CIA, not the Fed. But that’s exactly what Ben Bernanke did at the end of November...In reality, the Federal Reserve has just extended essentially unlimited lines of credit, camouflaged as a swap to the world in US dollars."

Here's a run down on why you should be concerned:

* The Fed essentially borrows or is backed up by US taxpayers, already in debt through mortgages, credit cards, student loans.

* The ECB in turn borrows from the Fed and then leverages that money up under its ECB umbrella.

* The ECB then lends it out to 523 of Europe’s most overleveraged banks.

* The desperate banks keep some to fortify their balance sheets, and use the rest to buy sovereign debt in some of the most overleveraged countries in the world, like Italy and Spain, which were just downgraded Friday by S&P.