World banks, led by the US Federal Reserve, are pumping an extra $US360 billion ($450 billion) into global markets in a coordinated effort to avert a lock-up of the financial system.I just watched the evening news on Australia's ABC. It started off with the words:
The Fed, along with the central banks of Canada, England, Europe, Japan, and Switzerland, are auctioning off billions of US dollars to European banks in a move to ease the liquidity constraints brought on by the global credit crisis. The Reserve Bank of Australia is not participating in the cash infusion.
The move is in response to a chronic shortage of US dollars in Europe over the past couple days, said a person familiar with the situation. European banks have found themselves short of the US dollars needed to service US-dollar denominated short term finance.
The Fed's announcement comes after global share markets plunged yet again today, rattled by the recent collapse of US investment bank Lehman Brothers, the emergency rescue of Merrill Lynch by Bank of America and yesterday's $107 billion bailout of AIG by the US government.
The ECB and the Bank of England said they would each offer up to $US40 billion in overnight funds. The Fed said it would authorise $US180 billion expansion of temporary foreign currency swap arrangements and Bank of Japan announced it would launch dollar-supply operations as part of the worldwide effort to tackle the dollar shortage.
Capitalism is in crisis tonight...Bush's friends will tell you this is an example of media bias.
It is NOT an example of media bias!
This is how far we have come.