Jubilee on Earth
May 15th, 2008, 08:14 PM
http://www.marketwatch.com/news/story/us-europe-suspected-backdoor-moves/story.aspx?guid={865DEDE5-6B7C-4EA9-A3C3-33FDFBD858F2}&siteid=yahoomy
Okay, this article was creepy! I'll pull out a few key sentences:
Gains of 2% to 5% in the U.S. dollar from a key low point last month, combined with recent press statements from anonymous senior finance officials, have fostered suspicions that the group of industrialized nations backed up their public statements with some backdoor negotiations...
...analysis of euro and dollar trades since the April 11 meeting of industrialized nations suggests the U.S. and Europe may have pressured central banks from the BRIC countries -- Brazil, Russia, India and China -- and sovereign-wealth funds to temporarily stop converting 20% to 40% of their newly accumulated U.S. dollar-holdings to the Euro.
In the past three weeks, however, the dollar has rallied. Since its April 22 low against the euro, the dollar has risen about 5% vs. the euro, 2.6% vs. the British pound and about 4% compared with the Swiss franc. The U.S. dollar index, which reflects the dollar's moves against a basket of six currencies, has gained 3.8% since its March 17 low.
The Treasury Department, while officially supporting a strong dollar policy, had been content to see the dollar slide since it helps U.S. exports, analysts said. That laissez-faire approach seems to have changed in the last two months, as the U.S. government has seen the weak dollar help push up oil, agricultural and other commodity prices to record highs.
Whether at governments' behest or not, financial buyers have been increasing their bets of a stronger dollar by selling off its rivals.
Weekly data from the Commodities Futures Trading Commission has shown non-commercial traders, which include hedge funds and other institutional investors, have lowered their long positions - or bets the currency will rise -- in euro, British pound and Swiss franc futures since the beginning of April.
So, let's see... if I have it right, the government was totally fine with the falling dollar, because it helped U.S. exports. But then it started falling too low, so then the government put pressure on foreign banks to buy and support the dollar. That way, it stabilizes the global economy. Do I have it right?
That's all good and fine. I guess I didn't realize that the government had that much control over foreign banks. And so does this mean "problem solved????"
:idunno
Okay, this article was creepy! I'll pull out a few key sentences:
Gains of 2% to 5% in the U.S. dollar from a key low point last month, combined with recent press statements from anonymous senior finance officials, have fostered suspicions that the group of industrialized nations backed up their public statements with some backdoor negotiations...
...analysis of euro and dollar trades since the April 11 meeting of industrialized nations suggests the U.S. and Europe may have pressured central banks from the BRIC countries -- Brazil, Russia, India and China -- and sovereign-wealth funds to temporarily stop converting 20% to 40% of their newly accumulated U.S. dollar-holdings to the Euro.
In the past three weeks, however, the dollar has rallied. Since its April 22 low against the euro, the dollar has risen about 5% vs. the euro, 2.6% vs. the British pound and about 4% compared with the Swiss franc. The U.S. dollar index, which reflects the dollar's moves against a basket of six currencies, has gained 3.8% since its March 17 low.
The Treasury Department, while officially supporting a strong dollar policy, had been content to see the dollar slide since it helps U.S. exports, analysts said. That laissez-faire approach seems to have changed in the last two months, as the U.S. government has seen the weak dollar help push up oil, agricultural and other commodity prices to record highs.
Whether at governments' behest or not, financial buyers have been increasing their bets of a stronger dollar by selling off its rivals.
Weekly data from the Commodities Futures Trading Commission has shown non-commercial traders, which include hedge funds and other institutional investors, have lowered their long positions - or bets the currency will rise -- in euro, British pound and Swiss franc futures since the beginning of April.
So, let's see... if I have it right, the government was totally fine with the falling dollar, because it helped U.S. exports. But then it started falling too low, so then the government put pressure on foreign banks to buy and support the dollar. That way, it stabilizes the global economy. Do I have it right?
That's all good and fine. I guess I didn't realize that the government had that much control over foreign banks. And so does this mean "problem solved????"
:idunno