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vriguy (64.92)

The Fed shafts us again?



May 10, 2010 – Comments (6)

The Federal Reserve is reportedly arranging for 500 billion dollars worth of repo swaps with various European countries, Japan, and Canada, or at least giving them access to a swap window. The way I see it we're giving them relatively stronger dollars (at $1.30/euro) today in return for possibly weaker dollars (at $1.40/euro) sometime in the future.  Seems like a bad deal for the American taxpayer.  I do not really understand these transactions so I'm hoping someone here can shed light on whether my suspicions are justified.

6 Comments – Post Your Own

#1) On May 10, 2010 at 3:23 PM, cbwang888 (25.50) wrote:

Don't think taxpayer are involved. More like USD holders are in the hook. Printing money (usd) to buy money (euro).

US Fed is like a dumpster on Wall Street. Anything toxic just keep on pouring into it.

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#2) On May 10, 2010 at 3:35 PM, MikeMark (29.12) wrote:

The answer is simple, if you understand the question.

Do you use US$ to make any transactions?

Do you understand what inflation really is?

Do you understand what money is and where it comes from?

There is no doubt that this is bad. Not only for the US taxpayer, but for anyone in the world who transacts regularly in US$. For greater clarity, read a few important books.


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#3) On May 10, 2010 at 9:03 PM, 1315623493 wrote:

What is bad is if the world's leading central banks did not coordinate their policies in a global economy that is inextricably linked monetarily. If we shaft Europe, they'll shaft us. Sounds peachy to let them sink but we're all on the same boat. 

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#4) On May 10, 2010 at 9:11 PM, IIcx (< 20) wrote:

Took the words out of my mouth vriguy,

US taxpayers will also inadvertently end up subsidizing Greek pensions and all the Euro mess.

What a mess! 

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#5) On May 10, 2010 at 11:07 PM, ChrisGraley (28.52) wrote:

There's not enough info to tell what we are up to on this one, but 500 billion isn't a drop in the bucket. I wouldn't worry unless these swaps continue.

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#6) On May 10, 2010 at 11:09 PM, ChrisGraley (28.52) wrote:

Betapeg, we are all in different leaky boats. We can't help each-other at this point any more than we can help ourselves.

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