Grab your wallet: Obama says US 'stands ready' to help in euro zone crisis

As the European debt crisis continues to escalate, President Obama urged European Union leaders today to act quickly to resolve the eurozone crisis, saying that "the United States stands ready to do our part to help them resolve this issue.

"This is of huge importance to our own economy. If Europe is contracting or if Europe is having difficulties, then it's much more difficult for us to create good jobs here at home because we send so many of our products and services to Europe; it is such an important trading partner for us," the president said following an annual meeting between U.S. and EU officials. "We've got a stake in their success, and we will continue to work in a constructive way to try to resolve this issue in the near future."
While Obama did not say what kind of assistance the U.S. would be willing to provide, earlier today the White House ruled out any financial contributions from U.S. taxpayers. "We do not in any way believe that additional resources are required from the United States or from American taxpayers," White House Press Secretary Jay Carney told reporters.
"This is a European issue, that Europe has the resources and capacity to deal with it and that they need to act decisively and conclusively to resolve this problem," Carney said.

Do these guys even understand the huge irony in lecturing the europeans about how to solve their debt crisis when Obama has sat on the sidelines and failed to address ours?

Considering the track record of this administration, everything they say is true - until it isn't. If the debt crisis looks like it is going to spin out of control, the administration could turn on a dime and make that statement above moot.
The possibility of direct US aid is remote. But considering the cavalier way this administration - and the Federal Reserve - has treated our money, anything is possible.

What a moron. Not only is it not our problem, but why would we bail out a currency that was designed to compete with the dollar. And why would we bail out anyone anywhere right now? We're barely staying afloat ourselves. Why would we willing to bail out socialist economic systems? Maybe he's trying to be vogue, but I can't possibly see where this could help his re-election effort. This decision making thing really isn't like him. Oh right......it's a bad decision.

We were there during the Cold War in force, but now not so much. It's their problem; they should deal with it. I'm with the Germans. Why should we help bail out a country where people retire at 55 when our retirement age keeps going up?

Let him try. It will just play badly at election time.

why would we bail out a currency that was designed to compete with the dollar. And why would we bail out anyone anywhere right now? Originally Posted by OliviaHoward

Contagion. If Italian debt fails, then Spain likely fails, too. French banks, which are substantially larger than U.S. banks, hold very large amounts of Euro denominated debt. They then fail. France becomes financially unstable, thereby dragging down Germany and the rest of the Northern
Euro block that have had no borrowing problems.

Then the chain reaction spreads to the U.S. U.S. banks start to fail for two reasons. First, interbank lending dries up. Second, nervous depositors all start withdrawing deposits. Banks only hold a small portion of deposits in liquid assets. So you have runs on U.S. banks who must start selling financial assets, including bonds and stocks. Markets crash. World wide depressions (not recession) results.

What role we choose to take -- e.g. Whether we assist in persuading the ECB to become a lender of last resort (LOLR), encourage Germany to relent on Euro back bond, etc. -- in helping divert disaster in Europe is, and should be, the subject of robust debate. What is not open to debate is whether we have a very strong interest in seeing that the Euro-zone countries don't fall apart financially. We do. Of course, so does China and the other BRIC countries, as do the oil countries of the Middle East.

And contrary to Marshall's initial post, wherever he stole it from, we have no debt crisis in the European sense. Both long and short term interest rates for sovereign borrowing are increasing in Europe, going as high as the 7% range for Italy and Greece. Our borrowing costs are at historic lows and are actually in the negative range when adjusted for inflation. People are paying the U.S. to hold their money when you take account of inflation. Plus, unlike Portugal, Ireland Italy, Greece, Spain, etc. (PIIGS) the U.S. has it's own currency and can inflate it's way out of debt (although there is no need to do so at this time). The problem facing the PIIGS is that they do not control their currency and while they would like to pursue a loose money policy, that would decimate the countries of Northern Europe that thrive under a tight money economy.

Oh, TTH! You sound so smart, but say such ignorant things. We can inflate our way out of debt? That would destroy the dollar. Do you really think we can shore up the European economy, when ours is on the brink of disaster? Anything we do may, at the very best, forestall the inevitable crash. The US is in no shape to assist anyone, let alone Europe. Hell, even the Chinese are warning us about our fiscal and monetary policies. The best thing we can do for Europe, and the world, is to get our own house in order. However, that might require our politicians of every stripe to surrender some control. Won't happen, so down we will go.

Actually, inflating your way out of debt is a classic way to make the real cost of the debt go down. And depending on what you mean by "destroying the dollar," that may actually help. Reducing the value of our currency viz a viz other currencies helps exports and reduces the real cost of paying off the debt. But we're no where close to having to do that. The warning sign that you have a debt problem is your interest rates. Ours have never been lower.

And you can be an isolationist if you want, but please draw out for me any scenario where the Euro zone breaks up and defaults on it's sovereign debt where we (and the rest of the world) don't end up in a deep depression. Once the French banks start to go, the whole world goes with them. They are the last firewall.

The simple fact is the reason that interest rates are so low is that no one wants the dollar. It's like dollars are in the closeout aisle in Kmart. The Fed is keeping interest rates low in the hopes that somebody will buy them. It also is a way to keep probing eyes away from the misdeeds of the Fed. They can say "Hey, we kept interest rates low, so STFU." But our economy is so bad, and no one is doing anything about it. Sure, we could inflate our way out of debt, but how does that help? It would destroy retirement plans, and much of the economy. No one wants to be repaid in full with dollars that have 1/10 or less of the purchasing power they lent. Our credit rating is lowered, and will be lowered again because there is no way we can pay back what we owe with similarly valued dollars. Add to this a bunch of power hungry politicians getting all they can for themselves and ignoring the problem of spending. WE SPEND TOO MUCH MONEY! Sure you can tax the rich, but there isn't enough wealth there even if we took it all to make much of a dent in the debt. Spending HAS to be drastically cut. So we are in the tank. If we help Europe, we will slow their demise, and quicken ours. The result is the same. We both fail. We're placing a band-aid on a severed carotid artery.

The only way we can get out of this mess is to immediately end the Fed, and replace the income tax with a consumption tax. We need to have a business climate unsurpassed in the world to get companies to come back here, and to emigrate here. Then we may be able assist Europe, and hold back the Chinese and maintain our place in the world economy. But it won't happen, because politicians would have to cede power.

On our current course, an economic crash is inevitable, as well as the resulting police state. It's too bad, this country was founded on liberty. It's sad to see the last light flicker out.

What happens when a currency is not in demand is that no one purchases debt at auction (or will only purchase it at very high interest rates) as has been happening in Europe recently. Our currency sells at a very low price. We're auctioning off future dollars at ridiculously low rates. Historically unprecedented rates. You post makes no sense in light of the economic evidence.

Speaking, as I was a few posts earlier, of a solution in Europe, here is an interesting graph on Lender of Last Resort lending. It shows that when a central bank shows that it's willing to use it's power, that it effectively stops the bleeding and that the power only has to be used once or twice to get the point across.

http://blogs.reuters.com/felix-salmo...ilout-edition/

I will see that article, and raise you this one.

http://www.naturalnews.com/034270_de...e_tyranny.html

And to the point of how our economy and that of Europe are intertwined, look at this graph:

That's true. That's why we will both fail. Because we have both spent much more than we take in. In our case, we have spent more than we can possibly take in with the system we have. Borrowing more money to give to Europe to reduce their debt doesn't make any sense. The overall debt remains the same, and continues to grow on both sides of the pond. I think we have passed the point of no return. I hope I'm wrong, but if we haven't, we are damn close. We really only have two choices at this point. More government (fascism) or more liberty. And I know the power structure is opposed to more liberty.

I read your article. You obviously didn't read mine. I didn't give yours much credence, because it was written by an insider who obviously benefits from the system.

Well, since yours was from the health editor of Natural News, yes, I just skimmed it. That doesn't seem a very good qualification to make international economic policy.

But you didn't refute what he said. And he's not an insider with a vested interest in the Fed.

Those who say the economic crisis in Europe is not "our" problem, do not understand the fundamental fact that today we live in a global economy.

The European economy is about four times larger than the US economy and if Europe was to go down in flames, the repercussions would be felt around the entire world for generations to come.

President Obama is wise to bring a measure of confidence to the European market at a time when it sorely needs it.

The European economy is about four times larger than the US economy

HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA!

Fast Cum, you dumbfuck!.....your numbers are as wrong as your opinions....another Chicken Little running around screaming that the sky is falling.....you are aware that you are one of the white working class without a college degree that Odumbo abandoned and doesn't give a shit about?