sedek

Saving the U.S Dollar: Wall Street's Next Big Bailout?

Interesting points, but I don't see centrals intervening in any manner other than continuing to devalue their own currencies by printing more money. The idea of Japan, China, and the oil producers buying more Dollars as their massive holdings are falling is short term, will be no better than a temporary slowdown, and will cost them more in the long run.

The only intervention that can stop the Dollar from falling further now is for the FOMC to accept that increased liquidity does not create increased counterparty trust and to not cut rates further this meeting. As a 75 bp to 100 bp cut is already priced in to the Dollar and commodities, a cut refusal would cause an immediate and major rebound in the Dollar and should take oil to $100.

The Dollar Should Continue To Fall

Carry trades and such are well over my head, but the Fed printing money like paper is free while the government raises deficits like the world will end tomorrow tells me that the Dollar will continue to weaken, in spite of the Euro itself weakening due to hyperactive printing presses. Major currencies are continuing to play "catch the falling Dollar," whether through rate cuts or liquidity injections, but can't do it when we are in an election year with candidates tripping over each other trying to be the most generous with the wealth of people thirty years in the future.