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Good news-
The Fed line item believed to be the swap line advances fell a bit to 608 billion from 615 billion the week before.
Not sure, for example, if they are valuing the dollars extended to the ECB or the euros held by the Fed as collateral.
The lines are set to expire in April.
And no way to tell whether the foreign $ borrowing is to fund $ assets already on their books, or whether they are funding beyond that.
The swap lines take some pressure off the process of covering dollar losses by selling local currencies to buy dollars to cover dollar losses.
This helps support, for example, the euro vs the dollar.
However, uncovered dollar losses grow with any depreciation of the local currency, so that risk remains until the currency aspect of the losses are ‘covered.’
This is still completely off the Congressional radar screen.
No one even asked why the Fed would loan over 600 billion to foreign central banks which can be used to support their auto industry at our expense.
And no one indicated that what the autos need most are buyers who can afford the new cars.
A payroll tax holiday would give the automakers and financial sector what they need most- consumers who can afford to make their payments.
(And how about those Democrats critical of companies paying high wages- time have changed!!!)
(Also, Congress could change tax laws to the point of eliminating corp. travel by private jet if they wanted to. Instead they give tax advantages and then
are critical of their utilization. But that’s another story…)
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