In our Crisis Investing call yesterday with the VIP subscribers, swap lines came up. I've been reading Marin Katusa's work for almost as long as I have known Doug Casey. As a result, and although I'm no expert, I'm comfortable enough as a writer and teacher to submit to you this summary of the swap line. This is for those readers who hear the term but haven't had time to make heads or tails of it.

A swap line is an agreement between the Federal Reserve and a foreign central bank to exchange currencies at a fixed rate, with a promise to reverse the trade in the near future at that same rate (plus a tad). The Fed prints up dollars and loans them to, say, the European Central Bank. The ECB prints up some digital euros and provides them to the Fed as collateral. The ECB then lends the dollars to banks in its own system that are short of them.