Link of the Day

Felix Salmon has an outstanding piece on how the national Central Banks in Europe are lending between each other. To be brief, the Germans are financing everyone else and money is being printed in vast quantities to do so. Here's an excerpt.

Since then, the Bundesbank has essentially been singlehandedly financing the PIGS central banks: it’s now owed a whopping €325 billion, and rising. (That’s about $470 billion, at today’s exchange rate; we’ll surely hit the half-trillion-dollar level soon.)

What’s being done with all this money? “Let us call a spade a spade,” says Wolf: “This is central bank finance of the state.”

Read the whole thing.