Mercy. I just learned the world is short on dollars.
Don’t worry. Superwoman Yellen is sure to come to the rescue, as the Fed Pledges Dollar Liquidity.
The Federal Reserve has pledged to provide dollars to other central banks if necessary to alleviate financial market turbulence that it said could ricochet back and hit the US economy.
“The Federal Reserve is prepared to provide dollar liquidity through its existing swap lines with central banks, as necessary, to address pressures in global funding markets, which could have adverse implications for the US economy,” the central bank said. It added that it was “carefully monitoring developments in global financial markets, in co-operation with other central banks.”
In a separate statement, Jack Lew, the US Treasury secretary, said: “The UK and other policymakers have the tools necessary to support financial stability, which is key to economic growth.” The G7 noted in a statement that its central banks stood ready to use their “established liquidity instruments” if needed.
Torsten Sløk, chief international economist at Deutsche Bank, said financial institutions were better prepared for major disruptions than they had been back in the 2008 financial crisis, but that the implications of a political crisis were difficult to quantify.
“In Japan some financial institutions may need US dollars — there are not enough dollars around,” he said.
Swap lines let foreign central banks borrow dollars from the Fed to provide to their own local financial institutions, and were used heavily during the financial crisis. The European Central Banks and Bank of Japan also said they were ready to activate their own lines.
Mike “Mish” Shedlock
There are NEVER enough dollars around. There never will be “Enough.” I mean, what’s too many dollars anyway?
When they are worth less than the paper they are printed on.
Paper? Not enough paper? Ink? That’s so 20th century. What’s an electron worth?
Nothing, you will find them everywhere and for free, but the paper, the contract that gives them meaning, the obligations and titles, should those become worthless, the dollar that trades their implementation, would be not worth even considering. That is why hyperinflation is tied to social/economic/government collapse.
The world is short of ‘Free Money’.
“There are not enough dollars around” says Deutsche Bank chief international economist.
DXY > 100 here we come …
Let’s see. The world central banks have ‘printed’ record amounts of money in record time and we are running out of dollars? Unless people have begun realizing their true worth and have been using them to toast marshmallows, all that money should still be around. Obviously we need more so the solution is simple. My recollection is that the Wiemar Republic had 32 printing plants running 24/7. I wonder if they are still in business?
The more salient point is there are not enough “physical” dollars. The FED can control P as many electronic dollars as they want. However, those can disappear as quickly as they arrive.
An even more salient point is,,,well,,,what is a dollar?
A dollar is not money. It is a debt instrument. Like a Treasury note or a Junk Bond, it is a promissory note. A promise made by a central bank to pay, in something, not sure what,,,,but certainly not anything real.
OTOH, how ’bout that 10 year? Exit point made in heaven? Have to admit it’s been a long run since 08.
A promise that you can exchange it for the goods and services produced by the American people. Haven’t had a problem yet.
How about a bunch of us collect some paper dollars and then sell them to Germany for, say, a 20% premium. Paper for electronic. Just trying to help out.
( I think that the IQ’s fall out in direct proportion to how high up folks get in bureaucracies)
C
What he means is there is not enough capital around. Let’s see how short the system is when equity and property markets lose15 to 20%. We will see some central banking liquidity printing then – those swap line printing machine running flat out.
Not to worry, the Fed will be dining in this weekend. Coffee’s on, and the PPT is on the job in full regalia. Molten servers will be back on by Sunday night. Full MSM lineup of Fed Heads set for go. Even Jimmy B’s uncle will be up there in Buysville.
BTFD all ’round. Just a hissy fit,,, Over the long haul,,, What would all the Bogleheads do,,,,Just a blip,,,, Gift from the gods,,,
This just means lots of folks are scared $hitless and want to trade whatever they have for King Dollar. Some banks don’t have access to enough dollars to make that trade. If they don’t, King Dollar goes through the roof, and every foreign company that borrowed heavily in dollars goes bankrupt. World-wide depression.
So the Fed is going to hand out just enough to keep this from happening and keep people calm. It is the very purpose of the Federal Reserve system.
Hi didn’t say pounds, by golly.
Ha! Nor Yuan,,,China has developed some pretty fast printers.
Gosh.
If it’s not different this time the plunge protection team will come in, in the last hour to push the market way back up using as much leverage as possible. I think this has happened every time we have had a big sell off since 2008. If we close on the lows the PPT will have crisis meetings this weekend and come in early Monday morning with how ever much it takes to close the market up at least several hundred points. If,however, they are unable to do this, then it may truly be different this time!
I hope so, the world is counting on them.
Supplying the world with dollars is what keeps the US economy strong, and enables us to run a balance of trade deficit, year after year. Will the day come, someday, when the US dollar is no longer considered “safe”, and all the dollars come flooding back? We shall find out in time, but I’d say, mostly likely not in the next twenty years.
Yes, this is partly why the GSE investors were paid, and why Geithner paid off the AIG gamblers. The US casino always pays out!
Hmm….. I’ve watched this so-called ‘money supply’ rise exponentially since 1974 until now it is increasing in gigantic amounts in very short periods of time. Classic destruction scenario to my mind….. the difference now, as opposed to France in 1791 and Germany in 1923 is that our ‘promise to pay’ is now currency to the entire world…….. who is there left to promise anything? Yes, I hope I’m completely wrong…..
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World Running out of Dollars Moans Deutsche Bank Economist
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Deutsche Bank running out of dollars?
Watson
“Deutsche Bank running out of dollars?”
Elementary, my dear Watson. With $40 trillion in Deutsche Bank derivatives alone, there is indeed a shortage of dollars to monetize everything if there was the equivalent of a bank run on the derivatives. Unfortunately, when Germany gave up its currency it lost the ability to print their way out of trouble. Just like Greece. They are at the mercy of USA for dollars.
A country without a currency cannot be a true Reich. They are a just an EU colony, temporarily richer. So, yes a shortage of dollars to settle their derivative debt if called.
So the domestic bank has just pledged to confiscate goods from Americans, and send the loot to foreign bankers.
The Fed’s mandate is to minimize USA inflation, consistent with USA employment. ***USA***, not what is left of the fascist European Union.
Bailing out foreign banks is not part of the Fed’s mandate.
Janet Yellen is breaking US law and should be arrested for bank fraud
“There are not enough dollars around” says Deutsche Bank chief international economist.
There are enough dollars around. There is too much debt around.
“In Japan some financial institutions may need US dollars — there are not enough dollars around,” he said.
The Japanese currency is the yen, not the dollar.