4 ms·

There is a general dollar shortage in the world, explaining things as superficially diverse as this, increasing Saudi desperation (as evidenced by the machinati

by HSO 7y ago

There is a general dollar shortage in the world, explaining things as superficially diverse as this, increasing Saudi desperation (as evidenced by the machinations behind their pseudo-IPO), CCP forbearance on HK (relatively speaking), and the covered interest parity puzzle. I don't want to explain more but some might want to look into it.

pinkfoot 7y ago
No, there is a shortage of demand from the ebtire planet to hold or denominate their trade in anything other than reserve currencies. When that is 7,5 billion people (including moi), then there is a permanent shortage. Feel free to diversify your pension in any African or South American currency
raducu 7y ago
There is no dollar shortage, there is a shortage of suckers wanting to hold their dollars in regular bank accounts due to low interest rates. As long as the the FED is willing to provide liquidity no questions asked, why would you hold dollars? Just buy high yield bonds and when you want liquidity, you call the FED and loan your junk bonds for real dollars and you pocket the interest rate difference.
- Ambele 7y ago
  I'd really rather use my 2% savings account than the 1.61% from short term treasuries, 1.65% from intermediate term treasuries, or 2.1% from long term treasuries.* Or maybe you're making snarky comment on how large banks were bailed out in 2008 by the Fed by which the Fed traded a portion of it's "good" treasury debt for bad bank debt (CDOs). If that's the case than I agree because I dislike how the Fed bails out the banksters more than the common man. *Source for annual interest rates on common bonds: https://investor.vanguard.com/etf/list#/etf/asset-class/month-end-returns https://investor.vanguard.com/etf/list#/etf/asset-class/mont...
Ambele 7y ago
I agree. I still scratch my head why China still accepts US Dollars and why we don't need to carry around Chinese Yuans yet.

by HSO 7y ago

pinkfoot 7y ago

No, there is a shortage of demand from the ebtire planet to hold or denominate their trade in anything other than reserve currencies. When that is 7,5 billion people (including moi), then there is a permanent shortage. Feel free to diversify your pension in any African or South American currency

raducu 7y ago

There is no dollar shortage, there is a shortage of suckers wanting to hold their dollars in regular bank accounts due to low interest rates. As long as the the FED is willing to provide liquidity no questions asked, why would you hold dollars? Just buy high yield bonds and when you want liquidity, you call the FED and loan your junk bonds for real dollars and you pocket the interest rate difference.

Ambele 7y ago
I'd really rather use my 2% savings account than the 1.61% from short term treasuries, 1.65% from intermediate term treasuries, or 2.1% from long term treasuries.* Or maybe you're making snarky comment on how large banks were bailed out in 2008 by the Fed by which the Fed traded a portion of it's "good" treasury debt for bad bank debt (CDOs). If that's the case than I agree because I dislike how the Fed bails out the banksters more than the common man. *Source for annual interest rates on common bonds: https://investor.vanguard.com/etf/list#/etf/asset-class/month-end-returns https://investor.vanguard.com/etf/list#/etf/asset-class/mont...

Ambele 7y ago

I agree. I still scratch my head why China still accepts US Dollars and why we don't need to carry around Chinese Yuans yet.