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