The coming US dollar crisis Message Board

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Strategies & Market Trends : The coming US dollar crisis

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To: Giordano Bruno who wrote (13310)	10/22/2008 7:08:38 PM
From: Secret_Agent_Man	3 Recommendations Read Replies (3) of 71454

$$$$$-note"What happened, in a nutshell, is the Euro banks invested heavily in dollar denominated fraudulent assets using the dollars which depositors placed with them, and in turn owe them those deposits in dollars. This is not screened by forex. As the dollar assets crumbled, the banks still owed their customers their deposited amounts in dollars. As the depositors panic and withdraw their dollars, there is a short squeeze, since the banks must convert euros to dollars. Its really just that simple. I just never understood the extent to which non-US private companies were holding dollar assets. I had mistakenly assumed their were converting them to domestic currency and the dollars were held by the foreign CB. When I found this out, I knew where to look in the BIS accounts and wrote the whole thing up and documented it. The correlation with dollar strength based on European banking distress is uncanny. I wish the BIS published their books more often because it would let me peg the top in the dollar with a lot of accuracy. As it is, I have to rely on LIBOR $ and TED, which is an indication but not as good as the actual bank books." ***

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