In an effort to help alleviate the symptoms of Europe’s debt crisis, the Federal Reserve, the European Central Bank, and other international banks funneled U.S. dollars into European financial systems on Wednesday. The move helped markets by making American dollars more easily available outside the U.S. Stocks shot up in reaction to the news. The increased liquidity had the immediate effect of boosting the Dow Jones industrial average by 484 points. It was the biggest single day gain since March 2009. Some wondered, however, whether the move was a smart long-term investment, or just a temporary fix. Simon Johnson, former chief economist for the International Monetary Fund, talks about the underlying problems of overburdened European governments.
The story you just read is not locked behind a paywall because listeners and readers like you generously support our nonprofit newsroom. If you’ve been thinking about making a donation, this is the best time to do it. Your support will get our fundraiser off to a solid start and help keep our newsroom on strong footing. If you believe in our work, will you give today? We need your help now more than ever!