El BCE recircula liquidez en esfuerzo inútil por salvar el sistema

3, 2008 (LPAC)--In a schizophrenic drive to save the financial system, the European Central Bank yesterday again "mopped up" some of the hundreds of billions of dollars in liquidity that it had pumped into the collapsing interbank market over the past few weeks -- while then adding today, about another $200 billion in new liquidity to the system.

The ECB drained about $300 billion out of the system, in the last few days, re-absorbing part of the flood of liquidity that it had poured out as part of an unprecedented coordinated action by central banks starting in mid-December. Last week, the ECB had drained out another $150 billion, and more is expected to be mopped up on Friday, Jan. 4, even after pumping new liquidity in on Thursday.

Reportedly, the ECB has vast difficulty in creating "equilibrium conditions" on the markets, because banks "remain unwilling to lend among one another," since they are unable to measure the exact degree of exposure to the damage caused by the subprime blow-out.

Leading economist Lyndon LaRouche said that the ECB draining the liquidity from the banks was one of examples of financial turbulence that he expected would hit on January 3. The point is, there is no monetarist solution, he said, even though the financiers keep looking for one. The only way to understand the crisis now faced is from the global standpoint, LaRouche reiterated.