Joel Bowman

Big news out of the gate today is that the central banks of the world are about to do more. More what, you ask? More of what central banks do best, of course…more money printing!

They don’t call it that, obviously. They call it “swapping” or “easing” or “recapitalizing” or “saving us from the abyss.” Or they call it “bolstering financial markets,” as The New York Times breathlessly explains…

“The Federal Reserve, the Bank of England, the European Central Bank, the Bank of Japan, the Bank of Canada and the Swiss National Bank all moved to bolster financial markets by increasing the availability of dollars outside the United States.”

And some forgotten voice, somewhere up in the peanut gallery groans, “We’re all Keynesians now.”

But never mind all that. The markets are up. The Dow stacked on 400 points before lunch. There’s no time to think, Fellow Reckoner. No time to wonder on the whys and whatfors. The money is coming! There’s celebrating to do! Hooray!

If only we’d worked this out years ago. Can you imagine? Whenever there was a crisis, we’d just add more liquidity to the system and hey, presto…problem solved!

Unless, that is, the problem has to do with solvency and not liquidity. Broke individuals usually don’t benefit much from extended lines of credit. Not in the long run. They are broke because they have a tendency to overindulge, to consume more than they produce. They need to kick their nasty habit…not reinvigorate it. They need to pay their debts, not put them off, accruing interest in the process.

To switch metaphors for a second, the last thing a man in a hole needs is a shovel. But here are the feds…ready to beat him over the head with it and fill his grave in over the top.

Joel Bowman
for The Daily Reckoning

Joel Bowman

Joel Bowman is a contributor to The Daily Reckoning. After completing his degree in media communications and journalism in his home country of Australia, Joel moved to Baltimore to join the Agora Financial team. His keen interest in travel and macroeconomics first took him to New York where he regularly reported from Wall Street, and he now writes from and lives all over the world.

  • Dave M

    This is great, the Bank of Canada is going bail out the Eurotrash [again] meanwhile the Europeon [that is not a spelling mistake] parliment is working on ways to ban oil from Canada.

    I think it is time we gave Europe to Germany.

  • CT

    That is funny. A good laugh. Broke banks bailing out other broke banks with electronic credit still called money and the idiots in the market go wild. I guess the only thing that is going to save us is another world war. So what is going on with all those Chinese tunnels being built?

  • Englischer

    Yeah Dave definitely, Germany could fix it.

    But who do we give the USA to? Canada?

  • gman

    “The money is coming! There’s celebrating to do! Hooray!”

    sounds great, don’t it? but recall, the dollar is debt currency. money is debt.

    “The debt is coming! There’s celebrating to do! Hooray!”

    doesn’t have the same ring to it ….

    unless of course you’re a banker issuing the debt ….

  • *Sparkie*

    Boy,the people on this whole page get it! Thank u DR 4 all your Wisdom that u have bestowed upon us! Yeah give the EU 2 Germany they always wanted it anyway. Now they can have it with out firing a shot! And the gr8est Empire since the Roman1! Well u know who owns them? All i can say is teach your children Mandarin! *S* PS look @ the Euro,Slv Gld & Oil and the $. Well 4 out of 5 ain’t bad! Its good 2b a Trader in ridiculousness. Ain’t it???

  • juniorGurooo

    D00MED RUs!!!

  • Digby

    Yes I think Greenspan has a lot to answer with very low interest rates for the last 10 years.
    The world can’t have China with its low currency.
    The World can’t have the USA keep printing money and devaluing the US dollar to make US exports cheaper.
    The World can’t have Europe keep stuffing around.

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