Over the past few month we have made it expressly clear that as part of its bailout of European banks, all Greek "bailout" funding in the form of super senior first lien debt funded by the Troika (since the Greek balance sheet now has 7 distinct debt classes), which counts the IMF among its backers, which in turn means you, US taxpayers, will go to European banks and most importantly, that most undercapitalized hedge fund of all, the ECB, LLC. Said funding has now officially commenced. There are those Greeks who may read the following headline from Reuters with delight "Greece receives first tranche of new bailout aid", at least until they get to the following part: "Greece has received the first 7.5 billion euros of aid from its new EU/IMF bailout, with the bulk of the payment going to repay bonds held by the euro zone's central banks, government officials said on Tuesday." So while the Greek may particularly care that not only will they not see much if any of the actual bailout cash, and in fact will soon have to start using their gold to fill the capital shortfall as reported here, we are curious what the response will be from US taxpayers, who are on the hook for about 17% of IMF funding, as the money starts trickling in, however not for some old-fashioned concepts such as stimulating jobs, but simply to indirectly, with Greece as a conduit, bailout Europe's insolvent central banks.
The International Monetary Fund and Greece's euro zone partners last week approved a second 130 billion euro ($172.15 billion) rescue to keep the debt-choked country afloat through 2014.
"We received 5.9 billion euros from the euro zone and 1.6 billion euros from the IMF," a finance ministry official told Reuters.
The official said Greece would use this money to pay 4.66 billion euros to the European Central Bank and other euro zone national central banks for the capital amount of a 3-year bond which expired on Tuesday. The amount will also cover about 200 million euros in interest on the same bond, with the rest going to cover budget needs, the official said.
For now the US-sourced funding is de-minimis in the grand scheme of things. However, if history is any precedent, the number will only rise. Another precedent also is that US response will be largely muted. After all iTrinkets abound.