SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : The coming US dollar crisis
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: NOW who wrote (13448)10/24/2008 8:23:33 PM
From: Don Earl  Read Replies (1) of 71456
 
RE: "can you elaborate on that last comment?"

I'm not sure what the question is. The currency swaps?

Well, the Fed goes out with a big bucket of USDs and trades them for buckets of yens or euros or whatever. I think the assumption is deals are cut and the intended purpose is to price fix a particular currency. So, with a fresh bucket of foreign money, the Fed can then enter the currency market to buy USDs, which keeps the price up.

The problem is if the bucket of money runs out before the market runs out of sellers of USDs, the Fed has to either let the price of the USD drop, or get another bucket of foreign money. That's what I figure happened in Japan over night. The Fed ran out of yens to defend the dollar and the bottom fell out.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News