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XMFSinchiruna (27.47)

Here you go... evidence that the dollar rally was a bailout for the greenback!!

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August 27, 2008 – Comments (7)

In case anyone thought I was just whistling dixie...

http://www.bloomberg.com/apps/news?pid=20601087&sid=aafNFhZiOg.w&refer=home

U.S., Europe, Japan Devised Plan to Prop Up Dollar, Nikkei Says

By Timothy R. Homan

Aug. 27 (Bloomberg) -- Finance officials from the U.S., Japan and Europe in mid-March drew up plans to strengthen the U.S. dollar following troubles at Bear Stearns Cos., Nikkei English News reported, citing unnamed sources.

The intervention designed by the U.S. Treasury Department, Japan's Finance Ministry and the European Central Bank called for the central banks to purchase dollars and sell euros and yen, with Japan providing the yen needed for the currency swap if the greenback's value dropped significantly, the news service said.

The three groups, which considered making an emergency statement through the Group of Seven industrial nations, did not stipulate a specific exchange rate for the potential intervention, nor did they detail the amount of money to be used, Nikkei said.

ECB spokeswoman Eszter Miltenyi and Treasury spokeswoman Brookly McLaughlin declined to comment on the report.

To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net

Last Updated: August 27, 2008 14:06 EDT

 

7 Comments – Post Your Own

#1) On August 27, 2008 at 11:36 PM, russiangambit (29.25) wrote:

Well, USD started tanking tonight. Will see whether it lasts. The rally did seem too good to be true given our latest CPI number. But what do I know?

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#2) On August 27, 2008 at 11:48 PM, RVAspeculator (29.00) wrote:

I just saw that out on bloomberg! 

I figured something like this was the cause but I am suprised this got leaked.  Da Boyz are slipping.  Someone spilled the beans.

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#3) On August 28, 2008 at 12:16 AM, lquadland10 (< 20) wrote:

Yep I knew the markets are fixed and this just confirmed it.

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#4) On August 28, 2008 at 7:57 AM, devoish (98.57) wrote:

Evidence?

Unnamed sources accuse unnamed financial officials.

I think Timothy needs to dig a little deeper before this article is worth ink.

Devoish, who is way to inexperienced to understand how currency manipulation might work, but can see empty speculation when he reads it.

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#5) On August 28, 2008 at 8:40 AM, XMFSinchiruna (27.47) wrote:

devoish

devoish... try again... :)  You think a source is really going to name themselves when outing forces of such power?

Bloomberg would verify before running the story.

We also had a public statement (I wonder if it's on You Tube somewhere) from the ECB saying they would not be permitting the gold price to 'get out of control'.

And finally, do you have any contrary evidence to indicate how it's possible for the USDX to rally from 72 to 78 over a few short weeks even as tensions mount significantly with Russia, Fannie and Freddie deteriorate, major investment banks sell mortgage secrities for pennies on the dollar, and credit markets remain disfunctional at best?

For so many months I've been documenting here the sheer number of downward pressures on the dollar, and the complete absence of any single source of fundamental support. Sure, the Euro weakened a little during the rally, but not enough to provide that kind of a catalyst. The Euro slide was all part of the plan. The dollar rally was a stage show... Period.

[Okay, not period, because this is CAPS and we always welcome different viewpoints, etc... but for me personally I'm more than convinced. I'm usually pretty skeptical of articles of that nature too (unnamed sources), but in cases of great importance like this one where to name yourself would be tantamount to suicide, and where one can rest assured no news agency loike Nikkei is going to print such a piece before the editor is satisfied that the source is legit and stands by the claim ... I feel satisfied that this one is for real. That, and I already knew it to be true even before I had evidence.  :)]

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#6) On August 28, 2008 at 4:11 PM, AnomaLee (28.54) wrote:

"Yep I knew the markets are fixed and this just confirmed it."

"Devoish, who is way to inexperienced to understand how currency manipulation might work, but can see empty speculation when he reads it."


Chris, I've been saying to you and other top players on CAPs that you all are too bearish on the dollar.

Why do you all think the open market controls monetary policy?

Virtually every forex transaction is facilitated and overseen by the prime dealers and the cooperation of large financial institutions. The prime dealers control the bid and ask, and everyone else trades the remaining spreads which is why it is a tech trading dream. There's no such thing as a short squeeze in ForeX trading.

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#7) On August 28, 2008 at 4:47 PM, XMFSinchiruna (27.47) wrote:

AnomaLee

Intervention like that has consequences, and is utterly unsustainable. You think China will continue to play ball and hold USD no matter how far we push the envelope of making the paper worthless?

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