OK. Could someone with greater international economic savvy explain this one to me:

We're giving European banks $50 billion to help recover from attacks

Shouldn't it be the other way around? Shouldn't they be giving money to us?

I mean, I'm glad we're generous and I know that we have a high stake in their being a healthy international economy. I'm just confused as to how this move helps when we're not sure how we're going to raise enough money to pay for our recovery efforts.

I realize I must be missing something. Can anyone explain it to me in layman's terms?

I don't think we are "giving" them the money. American dollars are used as standard currency throughout the world. The events this week affected the flow of dollars that are necessary. Thus, we are doing a currency "swap" with them.

Amy

It is not we are 'giving' them money so as much as we are supplying a liquidity of currency to help stabilize the US dollar and the foreign markets. Most other countries use the US dollar as a 'secure' base to back up their markets and economies. During times of crisis, even in the US, many foreign countries turn to our dollar as a relativity safe place to put their investments. Just as their countries are investing in the dollar, so do individuals. However, if the demand for the US dollar far exceeds the supply of the dollar, the cost of the dollar skyrockets. This devalues their own currency, thus causing a major downturn in their own economies.

What the treasury is trying to assure is that the world economies remain as stable as possible and people still turn to the US dollar as a source of security.