Thursday, November 13, 2008
Fed's forex swap lines increase another $41 billion in latest week. Total now stands at $615 billion.
Fed continues to dole out dollars to foreign central banks (to be used by foreign financial institutions). Another $41 billion was handed out in the week ended November 13. The grand total so far is $615 billion. This now comprises nearly 30 percent of the Fed's balance sheet. These loans are uncollateralized and non-recourse. We let our guys fail but we are supporting foreign financial institutions and keeping the dollar weaker than where it would be if these dollar handouts were not happening. It is a ripoff to American taxpayers.
Access the Fed's weekly statement here.
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6 comments:
Peter Schiff?????? Where's he in this discussion of Fed currency swaps? Shows how much he knows.
Schiff's absolutely ridiculous--assesses the US federal govt as if it were on the gold standard, and then argues that the solution to everything is to go on the gold standard.
Check out the stupidity of Michael Norman here where Schiff manhandles Norman:
Peter Schiff Was Right 2006 - 2007 (2nd Edition)
"assesses the US federal govt as if it were on the gold standard, and then argues that the solution to everything is to go on the gold standard."
LOL.. expertly pointed out the completely illogical arguments put forward by some of these talking heads.
Scott, look forward to hearing you on Mikes show. Sometime soon I hope.
Regards
Paul
Koozy.. If you care to look around cyberspace you will start to notice a difference between trolls. Take for instance the one that posts at Moslers board. He/she is longwinded but, witty thoughtful, intelligent, well read and articulate. Readers don't mind the ravings because its a useful counterpoint.
Thus far I've noted "ripoff", "pathetic moron", "owned by Peter Schiff?", "stupidity", "manhandles". Bravo. Hardly the substance of informed debate. No counterpoint of view has been expressed. Is it that Schiff's arguments, which are based on a fallacy of composition, attract the simple minded or juvenile troll?
Sir/Madam, we expect better, nay, we demand better of our trolls on this board. Please start presenting your arguments with fact, intelligence and skill so we may all learn.
Regards
Paul
PS Is that really you Peter?
Paul,
Well said. Just look at Schiff's followers, like the troll who's been posting here, and that pretty much sums it up.
Ok . . . saw the Schiff video . . . a few comments:
1. Props to Schiff for being right about housing and not backing down—definitely the most reasonable I’ve ever seen him, probably because he didn’t go into his broader paradigm in the segments. Of course, many others were also right about housing, including most everyone at the Levy Institute, CEPR, Bob Shiller, etc. . . . Levy and ECRI also predicted recession was “unavoidable” early in the year without more fiscal stimulus.
2. Schiff’s fundamental reasoning regarding housing downfall was that int’l investors would stop funding mortgages—basically a gold standard paradigm that has no relevance to the US or to the reasons underlying the financial troubles in financial markets.
3. Schiff was right about stocks in 2008 (again, many were—they just didn’t get on Fox), but true to his paradigm he proposed investing in gold, which is down $100 for the year and about $250 from its highs. Because of his paradigm, he wouldn’t dare tell anyone to invest in LT treasuries, whose yields have fallen from 5% to 3.8% since the crisis started in 8/07 (providing a decent holding period return, especially in comparison to stocks or gold) or the dollar (which is up about 15% against the Euro for the year and about 20% since the middle of summer—and who knows how high it would have gone without the Fed’s currency swaps).
4. Overall, he thinks the only solution is a big recession, sort of like Carnegie during the Great Depression. Again, his irrelevant paradigm precludes him from recognizing the rather obvious policy options available to alleviate the crisis, as Mike has been pointing out here.
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