If not $8 trillion to bring down the USD, then what does it take?

[ST]

If over $8 trillion in pledges and a stated $1.5 trillion in bond issuance to come (Oct '08-Oct'09) has not been enough to overcome deleveraging flows & sentiment abroad, to bring on a dollar debasement, then exactly what will it take?

Thoughts?

[GRG55]

Re: If not $8 trillion to bring down the USD, then what does it take?

If over $8 trillion in pledges and a stated $1.5 trillion in bond issuance to come (Oct '08-Oct'09) has not been enough to overcome deleveraging flows & sentiment abroad, to bring on a dollar debasement, then exactly what will it take?

Thoughts?

The belief that if you put your money somewhere else, anywhere else, that the reward to risk is greater than holding US$ cash or Treasuries?

[ST]

Re: If not $8 trillion to bring down the USD, then what does it take?

The belief that if you put your money somewhere else, anywhere else, that the reward to risk is greater than holding US$ cash or Treasuries?

What inaugurates that belief? Aren't traders always looking ahead and shouldn't the above actions signal an inevitable debasement of the dollar to come? Apparently not. Then is everyone waiting for someone to blink and begin selling? The farther this goes, it seems the more likely a run and sudden POOM, rather than a gradual ratchet.

So what does the Fed actually have to do if unsterilized monetization is already taking place? Just increase the magnitude?

To what point? European banks are more leveraged than American. Japan is at some point not going to be able to export their way out of all that debt. Seems like it could take a long time and a lot more money before another currency becomes 'safer' than dollars. Gold? there is not enough - a sudden rise to over $2,000 say and it would feel risky to big money. Commodities? then commodity equities? but none of that makes sense until a run begins.

[xela]

Re: If not $8 trillion to bring down the USD, then what does it take?

If over $8 trillion in pledges and a stated $1.5 trillion in bond issuance to come (Oct '08-Oct'09) has not been enough to overcome deleveraging flows & sentiment abroad, to bring on a dollar debasement, then exactly what will it take?

Thoughts?

Me thinks just more time. And don't forget the rollovers.

[Spartacus]

Re: If not $8 trillion to bring down the USD, then what does it take?

it's exactly the fact that they CAN pump in 8 TRILLION b0nars that is instilling confidence in the US bonar and US Treasuries, and a flight from corporate bonds (also munis are in trouble- not as bad as some corporate stuff
http://money.cnn.com/quote/quote.htm...ORNAX&time=1yr
http://money.cnn.com/quote/quote.htm...SHMMX&time=3yr )

It's exactly the fact that they DID IT, showing a willingness to DO IT EVEN BIGGER if they have to that may instill much more confidence in the near term.

Who knows when it will end.

If over $8 trillion in pledges and a stated $1.5 trillion in bond issuance to come (Oct '08-Oct'09) has not been enough to overcome deleveraging flows & sentiment abroad, to bring on a dollar debasement, then exactly what will it take?

Thoughts?

[Jeff]

Re: If not $8 trillion to bring down the USD, then what does it take?

Wouldn't the problem be that over $600 trillion in derivitives, $65 trillion in CDS's alone is more money than there is in the world?

That's been my point here.

[vinoveri]

Re: If not $8 trillion to bring down the USD, then what does it take?

Wouldn't the problem be that over $600 trillion in derivitives, $65 trillion in CDS's alone is more money than there is in the world?

That's been my point here.

I think in fact there is a near unlimited amount of money in world, not real capital of course, but fiat currency backed by nothing but confidence. As long as the confidence remains, what's to prevent the global CBs from underwriting a quadrillion $.

And not coincidently, the folks and institutions who benefit from this system continuing its pyramiding of debt and rent extraction are those whose confidence is needed most, so I can't see why the facade can't continue indefinitely (barring slips-ups such as international conflicts and failure of CBs to work it out)

[ST]

Re: If not $8 trillion to bring down the USD, then what does it take?

what's to prevent the global CBs from underwriting a quadrillion $.

I think other CBs are far more constrained simply because their currencies will experience a run if do that kind of printing. The only reason we can push the pedal so hard is because of our reserve status.

Perhaps it just does come down to what EJ/FRED have said - when things get to the depression level, which country will blink first and seek to devalue and export their problems? Already on CNBC today I saw the host say that the last thing he would want to hold is a 10 yr note in dollars. Perhaps this is the beginning of the end of the descent.