OK, so we all know one of Ben's problems will be the weakness of the dollar.
And we "think", some of us anyway, he will maintain the credo that the objective is not to weaken the dollar.
However, by printing money they are defacto causing the dollar to weaken and it may have gone beyond their intent.
So how do they maintain it at this level but not raise interest rates?
Well, we all know about the PPT. Some of us feel they have been manipulating the markets.
So what's to say they can't or won't start propping up the dollar using currency derivatives?
It would be stealth, no one would know for sure, ad they get to use their printing press without anyone seeing or hearing it.
He won't say the dollar isn't weak enough, he'll say the Chinese and Indian's currency is too strong, which is the same thing.
His objective is to make every worker in America have the buying power of Chinese coolies and Indian untouchables to make our exports "competitive".
Congress in rare fit of conscience, actually came forward about two months ago, and selected members lamented debasing our currency was no way to win the global war for commerce. They then went back to their whores disappearing from the face of the earth.
AS WE FOUND OUT LAST WEEK.....3.3 TRIL WENT FROM THE FED TO FOREIGN BANKS..UN KNOWN TO ANY FOR MANY MONTHS, AND ONLY REVEALED BY BLOOMBERGS RELENTLESS DIGGING...So anything is possible and most beyond our understanding.
They have proven beyond doubt to the entire world that they are devaluing the dollar to pay off debt in cheap bucks, even though they protest to the opposite...even to day the great lie again by geithernuts that he wants strong $$$
Who can go wrong with good metals and some great reit holdings esp in apts like AIV...good income and great future as rents skyrocket....projected by all forcasters i have run up to.....good insurance plus some income...reits are great bargains imho ....glta
$3.3T went to foreign banks, but since they're so interlocked with US, and on our soil to boot, who cares where the owners of the banks were born?
We're busy bombing camel jockeys out of existence to steal their oil, why wouldn't dropping truckloads of foreign dollars on foreign banks be in our best interest also?
Pay close attention to what Jim Rickards says about how the fed will handle "QEIII" or what ever it does or does not become named. They won't rock the boat right now. Not even a little bit.
Worthwhile listening to the whole thing:
He says he doesn't want a weak dollar, but really, he just doesn't want it to crash. Lower dollar would create jobs by increasing exports and making American workers more competetive in the world.
Unless he raises interest rates the dollar must crash. They can hold it for a short while but then the game is over, and Bernanke can't raise rates cause he'll kill the economy. Also China will soon uncouple the renimbi from the dollar as even though they are slowly increasing the exchange rate the dollar is falling so fast that the renimbi is also falling leading to inflation in china which they will not accept. When the Chinese uncouple, whether officially or by letting the renimbi rise 20% per year in relation to the dollar the dollar is through. Then we get inflation and poorer, but at least we get jobs. I'd say that the dollar goes below 50 from 74 on the index within a year and then falls further. Hope that cheers everyone up. I do wish I thought something different. GLTA
I believe the Dollar is Doomed. You have to blame the Politicians more so than the Bernank(he isn't helping, neither did Greenspan). We have 14.5 trillion in current debt, 50 to 60 trillion in unfunded liabilities, and half of the states are bankrupt. China will stop buying our debt and the dollar will lose it's reserve status. Game set and match. Buying the miners for the leverage to the higher prices. Silver trading higher than SLW. How long can that last. JMO
Approximately $25 billion dollars a week has been finding its way to the Equities market since Ben began buying treasuries from the banks.
He will buy more treasuries with the proceeds from maturing treasuries. He will also use interest income from the Fed's mortgage holdings to buy new treasuries.
He has to keep pumping liquidity into the system to keep interest rates low so the derivatives market on "interest rates" doesn't implode.
Fed is able to sell LT Treasuries because he is also selling cheap puts on them at the same time. So investors can hedge against the risk of a rise in interest rates.
Agno...didn't you hear? Bernanke changed his name. People now call him Sophie and, unfortunately, our new Sophie will soon have to make a choice...a "Sophie's choice". It's sure to cause some incredible pain.
So the rest of us about to be impacted from this jerk's decision must simply wait for his decision and then see where the collateral damage will be felt. Most likely not PM's.