Perhaps the most portentous result of the financial crisis has been the way central banks have taken extraordinary and unprecedented measures to maintain credit and liquidity.

Bank of England chief Mervyn King has claimed that they "saved the world from a new Great Depression." Certainly they have taken actions never previously envisaged in central banking.

They began with the conventional step of slashing interest rates to 1 percent or less in the United States, Europe and Japan. Then came the dramatic innovations under which central banks lent freely to financial institutions at low interest and against some very dubious collateral indeed, including the very mortgage-backed securities that had launched the crisis in the summer of 2007.

This broke decisively with the traditional "Lombard Street' rule of central banks as lenders of last resort, who were supposed to intervene to fend off disaster only by lending at high interest rates against good collateral.

The U.S. Federal Reserve took the lead, expanding its balance sheet with various loans, credits and other support measures from some $700 billion in 2007 to $2.3 billion by December 2008 and to almost $3 trillion by December 2011.

In China, Beijing authorities ordered commercial banks to act like central banks, issuing $1.4 trillion in credit in 2010 and $1.3 trillion in 2011. These unprecedented amounts financed China's recovery but at a cost in inflation, property bubbles and local government bankruptcies that has yet to be counted.

Where governments felt unable for political reasons to launch conventional Keynesian stimulus programs, the central banks did so under the guise of liquidity or market stabilizations operations such as Quantitative Easing, under which the central banks bought securities or bonds of their national governments.

The Bank of England, for example, pumped more than $400 billion into QE, about 15 percent of British gross domestic product. The Fed launched its $800 billion QE program in 2010. The Bank of Japan, having experimented repeatedly with QE, to only modest effect, earlier in the decade, launched a $300 billion program in March 2011, in response to the shock of the tsunami and the nuclear emergency it triggered.

The ECB, under rather stricter legal constraints, applied different (but still extraordinary) measures, authorizing the lending to commercial banks of more than $600 billion in June 2009 for one-year loans. In December 2011 it lent more than $700 billion to more than 500 European banks at 1 percent interest to help stabilize the unsteady European banking system.

And to ease the debt burden on troubled eurozone countries, in the last week of December 2011 it intensified its government bond buying program, settling purchases totaling $598 million after settling just $24 million worth of transactions the previous week. (The ECB "sterilizes" its bond purchases by draining an amount equivalent to its total bond purchases under the program, which now stands at $270 billion, in a weekly money market operation.)

The various central banks have also taken further dramatic measures in unison through a currency swap agreement, under which the Fed lends dollars to other central banks at 0.5 percent interest. Lending peaked at $586 billion in December 2008. Those draws were largely paid down by January 2010. Until a new swap agreement in November 2011 with the European Central Bank and the Banks of England and Japan, amount under the swap renewal agreement announced last summer was a mere $2.4 billion.

In December 2011 however, the Fed's swaps to the ECB jumped to more than $100 billion to ease a threatened credit crunch for European banks. The ECB balance sheets showed $62 billion as of Dec. 21 but on that day the Frankfurter Allgemeine Zeitung noted on its Web site that European banks took three-month credits worth $33 billion, which was financed by a swap between the ECB and the Fed. This was only booked by the ECB on Dec. 22, falling outside the Fed's reporting week.

This has been condemned as "a bailout of the euro" by some commentators, including former Dallas Fed Vice President Gerald O'Driscoll. The Bank of Japan drew almost $5 billion in the most recent week reported, suggesting to some critics the beginning of "a bailout" of Japanese banks.

More discreetly, the European central banks organize payments between their countries through the TARGET (Trans-European Automated Real-Time Gross Settlement Express Transfer) system.

As of August 2011 the German Bundesbank was sitting on credits of $539 billion, while the central banks of Greece, Italy, Spain, Portugal and Ireland has liabilities of $516 billion, reflecting the large trade surpluses Germany had accumulated with its eurozone partners.

Until those liabilities are repaid, Germany is in effect subsidizing its debtors even though the German government and central bank have insisted that they reject any suggestion of a transfer union between the stronger and weaker eurozone members.

Should the Bundesbank demand that its credit be paid in cash, when the debtors have no money, the consequences would make the Lehman Brothers collapse look like a tea party. Short of giving Germany the island of Crete, or Portugal handing over the Azores, it isn't easy to see how the debt could be paid.

The central banks for the moment have stuffed their fingers into the holes in the dike and have pumped almost $9 trillion into the global economy to do so. This has been done through fiat money, entries onto central bank balance sheets that aren't backed by real money and at best by very dubious collateral like Greek promises and mortgage-backed securities. At some point, the bill will be presented in real money.

At this point, one (or a mixture) of three developments will take place. Either economies will grow faster than the debt (possible but not likely), or there will be defaults or the debt will be inflated away. Take your pick.