foreign central banks

Federal Reserve Sending Billions to Foreign Central Banks

If you haven't seen this one yet from the Huffington Post, the article goes into shocking detail on how the U.S. Federal Reserve has been dumping money into foreign central banks:

The most recent balance sheet released by the Fed shows that $314 billion U.S. dollars are currently doled out to foreign central banks under the foreign exchange program. That's down from a December peak of nearly $600 billion, as central banks have repaid some of the loans.

In exchange for U.S. dollars, the Fed has received foreign currency of equivalent value in an exchange known as a swap. To protect the Fed from losses due to currency fluctuation, the deals include a provision that when the moneys are swapped back, the transaction will be done at the same exchange rate as the initial transaction.