Saturday, January 23, 2010

Fed to End Overseas Dollar 'Swaps'

http://online.wsj.com/article/SB10001424052748704423204575017281252221758.html?mod=rss_economy

5 comments:

Superbear said...

You know what this means. All those free-floating, debased dollars are going to come home. Result - probable weakening of foreign currencies and upswing in dollar.

All those dollar short positions will have to be unwound fast.

Any thoughts?

- Shankar

mlytle said...

Hi Shankar,
Yes, I agree with that. Also, if we have a big correction in the equities market, it tends to increase demand for dollars to settle the sale of those pieces of dollar based corporate paper. At least that is what usually happens..

Mark L.

bill102205 said...

If I understand correctly, those dollars have already come home: "As of Jan. 20, the Fed held $1.25 billion in dollar "swap" agreements with foreign central banks, down from $63 billion in early September and $583 billion in late December 2008 as the financial crisis was worsening."

Hopper said...

If there would be more financial crisis coming, then other the countries will not be able to handle this round as well. ie. it would spread the finacial crisis to other countries. especially is the dollar is getting stronger.

QUALITY STOCKS UNDER FIVE DOLLARS said...

Do away with the federal reserve.