After having a huge move to the upside yesterday, the Buck is Burning again here intraday. Why? That’s easy:
1. Timmy Geithner came back from wherever he was and was back on TV
2. The FOMC minutes were released
The first point is more of the same. The Chinese laugh at this guy; he’s a squirrel hunter with little to no credibility in supporting America’s currency. The second point is the more alarming one. These puppets at the Fed A) don’t get paid and B) must be aspiring to get paid.
The only way to achieve B) is, ostensibly, to pander to the political wind. Of course, when any outside Chinese auditor looks at this they must think they are looking at Japan. Nevertheless, here’s the upshot of the Fed’s Minutes:
- There was “uncertainty” about nearly everything other than the Great Depression Part 2 no longer being a certainty
- Several members indicated “concerns about counterparty risk and access to liquidity” becoming a problem again
- I didn’t understand the rest
Point 1 really amplifies the Japanese like credibility crisis our economic “experts” perpetuate. These guys seriously have no idea or they are willfully blind. The second point is the more alarming point. With the TED Spread (the measure of global counterparty risk) hitting a new cycle low this morning at only 20 basis points wide; 3-month US Treasury yields at 0.13%; and 3-month LIBOR hitting new lows at 0.33%, these people have to be seriously kidding me.
With Japanese style money this cheap, so are the opinions of these Pandering Politicians.
The US Dollar is hitting her lows of the day here, trading down -0.49% at $78.37, breaking our immediate term TRADE line again. In the immediate term, this will stoke the REFLATION trade. In the long term, if this politicization of the US Federal Reserve continues, our Buck will Burn.