What the HELL is the FED up to now!!!!!

[Mega]

http://www.bloomberg.com/apps/news?p...d=azpTLGVCnwvk

Why are they doing this??????
Mike

[ricket]

Re: What the HELL is the FED up to now!!!!!

http://www.bloomberg.com/apps/news?p...d=azpTLGVCnwvk

Why are they doing this??????
Mike

Perhaps it precludes a devaluation of the US dollar and these moves would allow banks in the Federal Reserve system to exchange dollars for Euros/Yen/etc (ie *not* the US dollar) in a hurry so as to preempt any losses...??

[nero3]

Re: What the HELL is the FED up to now!!!!!

Perhaps it precludes a devaluation of the US dollar and these moves would allow banks in the Federal Reserve system to exchange dollars for Euros/Yen/etc (ie *not* the US dollar) in a hurry so as to preempt any losses...??

I think the devaluation have happened with all the trillions here and there, however it will not be seen in the exchange rate before the market's starts to sell the dollar as the recovery moves ahead in a dynamic where weaker dollar promotes recovery that again weakens the dollar. Now they will have something to buy The dollar is only down around 15 % from the top in my local currency so far. In this situation where the dollar starts to slide the federal reserve could just raise interest rates to defend the dollar, but my guess is that they will just let the slide happen, and wait to the inflation can be measured and is in the double digit range.

[metalman]

Re: What the HELL is the FED up to now!!!!!

I think the devaluation have happened with all the trillions here and there, however it will not be seen in the exchange rate before the market's starts to sell the dollar as the recovery moves ahead in a dynamic where weaker dollar promotes recovery that again weakens the dollar. Now they will have something to buy The dollar is only down around 15 % from the top in my local currency so far. In this situation where the dollar starts to slide the federal reserve could just raise interest rates to defend the dollar, but my guess is that they will just let the slide happen, and wait to the inflation can be measured and is in the double digit range.

here at itulip we call that ka-ppom theory from 1999. you're catching on!

[markoboston]

Re: What the HELL is the FED up to now!!!!!

It seems pretty clear to me that the Fed is acquiring foreign currency reserves to defend the dollar in the event of a collapse or "disorderly decline". Though a $285 million swap line will not be nearly enough if the United States should face the balance of payments crisis predicted by EJ in this post:

http://www.itulip.com/forums/showthread.php?t=8698

[sn1p3r]

Re: What the HELL is the FED up to now!!!!!

This sounds to me like one more way of making $'s available no matter what the form is...

Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey, said the swaps add to the Fed’s capacity to provide liquidity and don’t appear to point to any immediate constraints in foreign exchange markets.

[rjwjr]

Re: What the HELL is the FED up to now!!!!!

I have no idea what it means, but when I first saw the article I had two reactions...

1] I sure hope the iTuliper's discuss this so I know what it means,
2] I suddenly feel like I need a shower to remove the Fed-stink.

Still not sure what it means, but it sure doesn't sit right.

[pwcmba]

Re: What the HELL is the FED up to now!!!!!

http://www.bloomberg.com/apps/news?p...d=a2TgUJgS1Xbg

What is this article (link above) from 10+ years ago or just trying to copy the good old US of A?