USD Archive

Japan Adopts Stealth Intervention as Yen Gains Hurt Growth

Japan traditionally bought $ and built it’s fx reserves to support its exporters. It was finally Tsy Sec. Paulson who shamed them into suspending their $ purchases by calling Japan, China, and others ‘outlaws’ and ‘currency manipulators’ in what was then, functionally, an attempt at a ‘weak dollar’ policy. The current administration, ...Read More

QE and the dollar

THE DOLLAR DEBASEMENT MYTH & THE FED’S BALANCE SHEET “I put together this chart [see link for chart] showing the dollar index versus the Fed’s balance sheet over the last three years. As you can clearly see – there is no real correlation between the size of the balance sheet and the ...Read More

Asia Banks Face Dollar Funding Squeeze After US Cut

This has nothing to do with the downgrade. Looks like the boys got themselves caught in a bit of a dollar short squeeze. Falling crude oil and other commodity prices will only make it worse. The Aussie dollar looks to be down close to 10% from recent highs, indicating a bit of ...Read More

China Has Divested 97 Percent of Its Holdings in U.S. Treasury Bills

So it looks like QE2 indeed managed to scare China out of the dollar. This is the portfolio shifting previously discussed that’s been dragging down the dollar even though, fundamentally sound, as Fed Chairman Bernanke correctly stated. And when China (and Japan) offered to buy Spanish and other euro zone national govt ...Read More

QE2: Captain, your ship is sinking

So imagine the corn crop report comes out and it surprises on the upside at up 30% What happens? The price of corn probably starts to fall. Commercial buyers back off, farmers rush to hedge, and, overall, players of all ilks try to reduce positions, get short, etc. A few weeks later ...Read More

Saving Money by Selling Excess Property | The White House

It may indeed serve public purpose to sell federal property. In fact, the burden of proof of public purpose is with the federal government as to why it would own any specific property in the first place. However, selling property does remove net financial assets from the economy, make the dollar ‘harder ...Read More

State of the Union

Some of the risks listed at year end seem to be coming on line, including slower growth out of China, euro austerity keeping a lid on demand in the euro zone, and US fiscal balance too tight for anything more than very modest top line growth, given current credit conditions and the ...Read More

quick fx update

With crude/wti below 90 and looking soft, for anyone who wants to know my opinion, I’m now inclined to favor the $ over the euro. ...Read More

QE providing the ‘cover’ for foreign dollar buying?

Japan has already begun the resumption of dollar buying. Now looking like QE is may be opening the door for a lot more? Emerging Market Policymakers Vow to Combat Fed’s Easing November 4 (Bloomberg) — Policymakers from Brazil to South Korea and China on Thursday pledged to come up with fresh measures ...Read More


Drop in crude imports today bullish for dollar ...Read More