Randi Rhodes Message Board > Dollar May Get `Crushed' as Traders Weigh Up Bailout (Update1)

Full Version: Dollar May Get `Crushed' as Traders Weigh Up Bailout (Update1)

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kernaljessup

Sep 21 2008, 08:21 PM

QUOTE

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Sept. 22 (Bloomberg) -- Treasury Secretary Henry Paulson's plan to end the rout in U.S. financial markets may derail the dollar's three-month rally as investors weigh the costs of the rescue.

The combination of spending $700 billion on soured mortgage-related assets and providing $400 billion to guarantee money-market mutual funds will boost U.S. borrowing as much as $1 trillion, according to Barclays Capital interest-rate strategist Michael Pond in New York. While the rescue may restore investor confidence to battered financial markets, traders will again focus on the twin budget and current-account deficits and negative real U.S. interest rates.

``As we get to the other side of this, the dollar will get crushed,'' said John Taylor, chairman of New York-based International Foreign Exchange Concepts Inc., the world's biggest currency hedge-fund firm, which manages about $15 billion...

Crush-did. Whatever...$15 billion is nothing. I find it hard to believe this John Taylor guy is the biggest. We talking several trillions. Why hell, I heard Mike Malloy tossing around the word Quadrillion...Sign up to be a founding member of Nova M Radio Network and hear the real financial discussion... $15,000,000,000...one of these fraud street crooks can find that in thier Limo's DECOMMISSIONED ashtray. Please...

fairyduster

Sep 21 2008, 08:45 PM

QUOTE (kernaljessup @ Sep 21 2008, 08:37 PM)

Exactly. These fraud st. people and "our" government are only here to finish America off.

Grover gets his wish after all.

kernaljessup

Sep 21 2008, 10:07 PM

QUOTE (fairyduster @ Sep 21 2008, 10:01 PM)

Exactly. These fraud st. people and "our" government are only here to finish America off.

Grover gets his wish after all.

It's like an Economic Terrorist Attack...for real.

karaplanet

Sep 21 2008, 10:33 PM

QUOTE (kernaljessup @ Sep 21 2008, 11:23 PM)

It's like an Economic Terrorist Attack...for real.

Ooooo...a timely, most excellently coined phrase.

jkun17

Sep 21 2008, 10:42 PM

Just incase anyone was wondering, as of right now the US/Canadian exchange rate is $1.00 / C$1.04

plodder

Sep 22 2008, 05:10 AM

From June 6, 2008.....Countdown to $100.00 Oil

The Fed trashed the dollar in order to bail out Wall Street Investment Banks

Ever since last August 2007 when the scope of Wall Street exposure to "subprime mortgage" security losses became clear, the Fed has lowered rates agressively from 5.25% to 2%, arguing that Bailing out Billionaires was necessary because they were "too big to fail." it turns out that one way that has acted as a tax on every single American, including those who had nothing to do with toxic mortage-backed debt, was by contributing sharply to the most recent run-up in gas prices.

Here's the Dallas Fed again:

How much has the weakening dollar added to oil prices? If the U.S. currency had held its 2001 value against the euro, oil would have traded at about $80 a barrel in early 2008, about $21 below its actual price (Chart 7). Put another way, exchange rate movements accounted for roughly a third of the $60 increase in oil prices from 2003 to 2007.

Most of the dollar’s price impact occurred toward the end of the period. When it comes to adjustments in oil consumption and production, a declining dollar takes time to reshape crude oil prices because expectations don’t shift quickly. Factors that push up expectations of future prices, however, also put upward pressure on spot prices because markets will adjust until investors are indifferent between holding and selling the marginal barrel of crude oil on the spot market.

What this basically means is that every time you pump a $4 gallon of gas, about $1 of that price is a direct effect of the Fed's backstopping Wall Street investment banks in the last 9 months.

downix

Sep 22 2008, 06:48 AM

Welcome to Hyperinflation. Expect inflation to top 20% within the year.

plodder

Sep 22 2008, 12:59 PM

Oil is up $7 a barrell...Cdn $ up 12.5 cents to US $ at 2pm EST

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