It is what has turned a normal recession into a long term depression.
QE2 was a $600 Billion bailout of European banks according to released Federal Reserve documents.
And the latest bailout tranche paid to Greece by the IMF was nothing more than another $780 million dollars given by US taxpayers to hedge funds.
That's because the actual Greek debt is no longer owed by European banks to the extent it had been previously expected.
As the banks have been selling Greek debt, it has been mostly hedge funds who have been buying it. The IMF just approved a €3.2 billion ($4.6 Billion) disbursement of cash for Greece, its fifth, as part of the €12 billion in money that Greece needs in order to continue operating in the months f July and August. The entire amount will be promptly recycled by global financial institutions in the form of debt maturities and interest payments, which amount to €18.2 billion in the months of July and August. Simply put - ECB, EU and IMF money in, money owed to bankers out. And 17.09% of the money coming from the IMF, comes from the US taxpayer.
Thus US taxpayers have just paid out about $780 million (of the $4.6 billion IMF bailout) in order to fund interest owed to hedge funds.
If it wasn't paid, Greece would default... triggering massive losses from the OTC derivatives and credit default swaps to the 'too big to fail' banks and companies.
There are only two ways for this to go: allow debt to be destroyed (and trigger a massive Depression) or print massive amounts of money.
The financial crisis still has a long ways to play itself out.
And you know which way things are going to go: QE3 will happen.
The printing presses haven't even begun to crank out their excess dollars yet.
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