How Does “Unlimited Funds” Sound?
October 14th, 2008Via: Bloomberg:
The U.S. Federal Reserve led an unprecedented push by central banks to flood financial markets with dollars, backing up government efforts to restore confidence in the banking system.
The ECB, the Bank of England and the Swiss central bank will offer unlimited dollar funds in auctions with maturities of seven days, 28 days and 84 days at a fixed interest rate, the Washington-based Fed said today. The Bank of Japan may introduce “similar measures.” The dollar declined and some money-market rates fell.
Policy makers from the Group of Seven nations pledged at the weekend to take “all necessary steps” to stem a market panic after the MSCI World stock index plunged 20 percent last week. Central banks last week cut interest rates in tandem for the first time since 2001, the U.S. plans to buy $700 billion in distressed assets from banks and in Europe, the U.K. is leading a push to keep lenders afloat with taxpayers’ money.
“By providing unlimited dollar funds they are acting on the back of the G-7 plan to ensure the system is fully liquidized,” said Lena Komileva, an economist at Tullet Prebon Plc in London. “We’re going to see even more liquidity provided and more aggressive rate cuts are coming.”
It sounds like poker, with everything wild.
Wow, that’s completely insane. Obviously they are actively attempting to destroy the economies of the world in their current forms.
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Typical conversation between 4 year-olds:
Jim: My dad has a billion dollars
Robert: Oh yeah, well my dad has 5 billion dollars
Jim: Oh yeah, well my dad has 1000 billion dollars!
Robert: Oh yeah, well my dad has INFINITY dollars!
Jim: Oh yeah, my dad has INFINITY + 1 DOLLARS!
…
Federal Reserve (listening from a few feet away): Oh hey! That’s what we should do!
Reality: Both Jim and Robert’s fathers are deeply in debt and contemplating suicide.
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So when do we all get to start making up numbers? I’d love to have one of those $100 billion Zimbabwe bills right about now… Just to watch it appreciate against our money… I’m off to the currency exchange with a roll of pennies!
An unlimited auction in U.S. dollars sounds like a Very Convenient way to get U.S. dollars off of the balance sheet.
No wonder the dollar took a dive.
There seems to be (in this action) an almost unlimited, but unspoken desire to sell the dollar to highest bidder. Much like the U.S. banks and Wall Street sold all those mortgages to the EU, Japan, sheez. Where is China in all of this?
Sounds like BushCo and the rest of the gang just bought into another Ponzi scheme. Its payback time.