Privatizing Money

Yesterday the European Central Bank (ECB) announced that it will hand out $645 billion in three-year loans to European banks, which the ECB printed out of thin air, like Monopoly money! The interest rate will be 1 percent per year.

The ECB will not be lending this money to the government of Greece, even though that government is running a budget deficit of just under 10 percent of GDP -- and the Greek GDP dropped by 5 percent this year. The government of Greece is now paying 37 percent per year on its 10-year bonds, when it can borrow anything at all.

The ECB will not be lending this money to the people of Spain, even though official unemployment in Spain is now at 23 percent. Spain's Economy Minister said recently that "Spain faces its deepest recession in half a century." Tough luck; their Christmas tree has nothing under it.

And when the European banks get this $645 billion, to whom will the banks be lending? Anybody, or nobody. No strings attached. They can borrow from the ECB at 1 percent, lend it back to the German government at 2 percent, lock in that profit, and take the next three years off.

I just have one question: why?

The world continues to face the greatest economic crisis since the Great Depression. Unemployment throughout Europe is over 10 percent. Entire national governments are on the verge of going broke. Why would anyone think that the thing that we have to do right now is hand out $645 billion in more funny money to the banks? In Europe or anywhere else?

The ECB is a public institution. How can it possibly justify yet another bailout for selfish private interests while the public is sent straight to hell?

If a Martian were to land in Paris today and just read the headlines of the newspapers, he could reach only one conclusion: that there has been a coup in Europe, that the banks are now in charge, and that they're grabbing everything that they can get their hands on.

Mark my words: at some point, people are just not going to take it anymore.


Alan Grayson