This is another seigniorage scam: trying desperately to recyclate US dollars as a debt for Europe...

Federal Reserve, ECB, other central banks open credit line to send dollars to Europe

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WASHINGTON (AP) — The Federal
Reserve late Sunday opened a program to ship U.S. dollars to Europe in a
move to head off a broader financial crisis on the continent.

Other central banks, including the Bank of Canada, the Bank
of England, the European Central Bank, the Swiss National Bank and the
Bank of Japan also are involved in the dollar swap effort.


The move comes after the
European Union and International Monetary Fund pledged a nearly $1
trillion defense package for the embattled euro, hoping to calm jittery
markets and halt attacks on the eurozone's weakest members. The ECB also
jumped into the bond market Sunday night, saying it is ready to buy
eurozone bonds to shore up liquidity in "dysfunctional" markets.

The Fed's action reopens a program put in place during the
2008 global financial crisis under which dollars are shipped overseas
through the foreign central banks. In turn, these central banks can lend
the dollars out to banks in their home countries that are in need of
dollar funding to prevent the European crisis from spreading further.

The Fed said action is being taken "in response to the
reemergence of strains in U.S. dollar short-term funding markets in
Europe," and to prevent the spread of that strain to other markets and
financial centers.

A so-called "swap" line with the Bank of Canada provides up to $30 billion. Figures weren't provided for
the other central banks. The arrangements are authorized through
January 2011.

The debt crisis first erupted in Greece. Fears that it could spread to Spain, Portugal and other eurozone
countries. The crisis has pushed up demand for the U.S. dollar and has
sharply weakened the value of the euro, the currency used by 16 European
countries. Eurozone ministers and the IMF this weekend approved a $140
billion rescue package of loans to Greece for the next three years to
keep it from imploding.

The Fed had wound down these crisis-era programs with other central banks in February, along
with other emergency programs to get lending flowing more freely again
and return stability to financial markets. At that time, financial
strains in the United States were easing, and the Fed began to take
steps to move policy closer to normal.

It also had begun to lay out a plan to reel in the unprecedented stimulus money
pumped out during the crisis. The Fed's balance sheet ballooned to $2.3
trillion, more than double where it stood before the crisis struck. The
program reopened on Sunday will expand the Fed's balance sheet,
economists say. However, the program poses little credit risk to the Fed
because the arrangements are with other central banks, they added.