The FEDERAL RESERVE announced it was extending the DOLLAR SWAP loans it has in place with several central banks. Earlier in the week, the market reported a shortage of DOLLARS in Europe as people were exchanging EUROS for DOLLARS and the commercial banks were caught short sending EUROBOR rates higher. BEN BERNANKE is nervous that a debt crisis in EUROPEAN banks will cause U.S. banks with exposure to the PIIGS’ sovereign debt major problems in the overnight lending facilities.
Posts Tagged ‘Greek bonds’
Notes From Underground: Fed Feeds Europe More Dollars; China Offers to Buy European Debt (Yet Again)
December 22, 2010Notes From Underground: Did Dudley DO RIGHT on his mounting a possible expansion of monetary easing?
October 4, 2010First things first. The Financial Times ran a weekend front-page story revealing that Sarkozy and the Chinese have been holding secret meetings for the last year on the issue of global currency stability. It was unclear what efforts Sarkozy was pursuing but he was looking to get Chinese support for whatever he is going to try to accomplish when he gets the leadership post of the G-20. The French have been trying to replace the U.S. DOLLAR as the world’s reserve currency since the days of DeGaulle and Jacques Rueff. We have warned that Sarkozy is desperate to make a grand play on the international stage as his political support in France has badly eroded. Wen Jiabao is in Europe this week for talks with the EU on many issues.