It was only a matter of time:
(Reuters) – The world’s major central banks acted jointly on Wednesday to provide cheaper dollar funding to European banks facing a credit crunch as the euro zone’s debt crisis drove EU ministers to urge more IMF help to avert financial disaster.
The emergency move by the U.S. Federal Reserve, the European Central Bank, and the central banks of Japan, Britain, Canada and Switzerland recalled coordinated action to stabilize global markets in the 2008 financial crisis after the collapse of Lehman Brothers.
Since Germany’s Supreme Court ruled against letting the ECB turn the euro spigot on high without the approval of German’s parliament, the rest of the developed world will be forced to come to the rescue.Â What that really means is taxpayers will foot the bill for another big kick of the financial can down the road.Â As Mises wrote:
The assistance of inflation is invoked whenever a government is unwilling to increase taxation or unable to raise a loan; that is the truth of the matter.
With bond yields in Euro zone countries creeping upward and outbursts of social unrest due to higher taxes and cuts in welfare spending, the last resort of currency devaluation is being employed yet again. Â To paraphrase investor Marc Faber on the mindset of Keynesian central bankers, the solution is always to print money and if that doesn’t work, print more money.Â The global currency race to the bottom is as fascinating to watch as it is demoralizing.