#1 When we learn that the Fed is funding Europe with big money there will be a backlash. The Fed is already in hot water for their easy money policy. A $500b loan to Europe by the Fed will not go over too well with the folks in America. If something like this were agreed to over the weekend and we wake up on Monday with a new bailout there will be a very sharp reaction. Several in D.C. (Grayson) will attempt to stop it. Bernanke understands this, Geithner does as well (maybe). A new Marshall Plan for Europe is simply not in the cards. If that is what is attempted it will fail miserably. The most likely outcome will be that the US is rapidly sucked into the European sovereign debt crisis
Wow. Not sure how much truth there is in this, or if the magnitude of the mooted US commitment is at all on the mark, but the author's right: there is absolutely zero appetite for yet another bailout of idiot bankers-- and these aren't even American bankers. |