How American Taxpayers Could End Up Paying for ECB Liquidity Flood

Posted by Kendall Harmon

It sounds like a good plan, but here’s the real risk: even after this restructuring, Greece ends up defaulting on those new EFSF-backed bonds. Remember, this is a solvency problem not a liquidity issue.

So the EFSF takes a loss, and maybe even its partner, the IMF. The debt is removed from bank balance sheets and put directly on the taxpayers of Europe and, via Washington’s 17% stake in IMF loans, Americans.

Read it all.

Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankTaxesThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--The U.S. GovernmentFederal Reserve

0 Comments Posted September 15, 2011 at 3:15 pm

To comment on this article: To article and comments

<< Back to main page

The URL for this article is

© 2014 Kendall S. Harmon. All rights reserved.

For original material from Titusonenine (such as articles and commentary by Dr. Harmon) permission to copy and distribute free of charge is granted, provided this notice, the logo, and the web site address are visible on all copies. For permission for use in for-profit publications, please email KSHarmon[at]mindspring[dot]com