US dollar falls after Federal Reserve's announcement

US dollar falls after Federal Reserve's announcement

[url=http://www.fx-mm.com/21273/trading-commentaries/market-update-western-union/us-dollar-falls-after-federal-reserves-announcement/]www.fx-mm.com[/u rl]

The US dollar fell sharply last night after the US Federal Reserve announced that it will now double its monthly quantitative easing target from $40bn to $85bn of asset purchases in order to tackle a sluggish economic recovery that is keeping unemployment too high. In another extraordinary move, Chairman Ben Bernanke also tied interest rates to unemployment, promising to maintain ultra-accommodative monetary policy until the overall US jobless rate falls to 6.5%.

(visit the link for the full news article)
www.fx-mm.com...

This is extraordinary indeed. Im not surprised the dollar fell sharply after this lunacy was announced.

What is the strategy? To devalue the USD to improve exports? Cause a GFC and make a heap exporting food? Does the Government need to do this since Central Banks are turning away from the USD and diversifying?

This crazy announcment exposes the so called 'fiscal cliff' talks for the nonsense they are. How can the Federal Reserve do this while the Government talks about a 'fiscal cliff'? It makes no sense at all.

Does this mean the dollar is collapsing? What does this mean to us in the near future?

Originally posted by spangledbanner
This is extraordinary indeed. Im not surprised the dollar fell sharply after this lunacy was announced.

What is the strategy? To devalue the USD to improve exports? Cause a GFC and make a heap exporting food? Does the Government need to do this since Central Banks are turning away from the USD and diversifying?

This crazy announcment exposes the so called 'fiscal cliff' talks for the nonsense they are. How can the Federal Reserve do this while the Government talks about a 'fiscal cliff'? It makes no sense at all.

edit on 13-12-2012 by spangledbanner because: (no reason given)

LOL.

There's no REAL connection between the fiscal cliff and this policy decision...

Originally posted by texasgirl
Does this mean the dollar is collapsing? What does this mean to us in the near future?

Not yet. It does show what investors thought of the decision though.

I dont think the near future is looking bright.

Originally posted by spangledbanner

Originally posted by texasgirl
Does this mean the dollar is collapsing? What does this mean to us in the near future?

Not yet. It does show what investors thought of the decision though.

I dont think the near future is looking bright.

No. Printing more money devalues the dollar. That makes people want something more valuable. But, this decision isn't aimed at currency speculators; it's aimed primarily at the US economy.

Originally posted by longlostbrother

Originally posted by spangledbanner
This is extraordinary indeed. Im not surprised the dollar fell sharply after this lunacy was announced.

What is the strategy? To devalue the USD to improve exports? Cause a GFC and make a heap exporting food? Does the Government need to do this since Central Banks are turning away from the USD and diversifying?

This crazy announcment exposes the so called 'fiscal cliff' talks for the nonsense they are. How can the Federal Reserve do this while the Government talks about a 'fiscal cliff'? It makes no sense at all.

edit on 13-12-2012 by spangledbanner because: (no reason given)

LOL.

There's no REAL connection between the fiscal cliff and this policy decision...

Dont you find it strange that they are negotiating a debt limit yet the Federal Reserve can just decide to do this? I find it strange to say the least.

Originally posted by spangledbanner

Originally posted by longlostbrother

Originally posted by spangledbanner
This is extraordinary indeed. Im not surprised the dollar fell sharply after this lunacy was announced.

What is the strategy? To devalue the USD to improve exports? Cause a GFC and make a heap exporting food? Does the Government need to do this since Central Banks are turning away from the USD and diversifying?

This crazy announcment exposes the so called 'fiscal cliff' talks for the nonsense they are. How can the Federal Reserve do this while the Government talks about a 'fiscal cliff'? It makes no sense at all.

edit on 13-12-2012 by spangledbanner because: (no reason given)

LOL.

There's no REAL connection between the fiscal cliff and this policy decision...

Dont you find it strange that they are negotiating a debt limit yet the Federal reserve can just decide to do this? I find it strange to say the least.

No.

The biggest threat the "cliff" poses is to economic growth.

If it's not resolved then:

the current policy scheduled for the beginning of 2013 – which features a number of tax increases and spending cuts that are expected to weigh heavily on growth and possibly drive the economy back into a recession

bonds.about.com...

The QE is meant to ALSO stimulate growth. They seem if anything to work in tandem, making the decision more logical than anything else.

Quantitative easing increases the excess reserves of the banks, and raises the prices of the financial assets bought, which lowers their yield.[7]

Expansionary monetary policy typically involves the central bank buying short-term government bonds in order to lower short-term market interest rates. However, when short-term interest rates are either at, or close to, zero, normal monetary policy can no longer lower interest rates. Quantitative easing may then be used by the monetary authorities to further stimulate the economy by purchasing assets of longer maturity than only short-term government bonds, and thereby lowering longer-term interest rates further out on the yield curve.

en.wikipedia.org...

So print more money to purchase these bonds from the government is what they're doing. Devalue the dollar so people that are actually feeling the economic crises more acutely can now buy less with what little money they have... Seems like a bad idea to me, or their intentions are contrary to what they say.

Yes I'm aware most money is not paper money, but digital. Same rules apply: the more American money they print the less it's worth

Originally posted by dorkfish87
So print more money to purchase these bonds from the government is what they're doing. Devalue the dollar so people that are actually feeling the economic crises more acutely can now buy less with what little money they have... Seems like a bad idea to me, or their intentions are contrary to what they say.

Yes I'm aware most money is not paper money, but digital. Same rules apply: the more American money they print the less it's worth

No.

A move like this has almost no real impact on average Americans. That's just hyperbolic.

From my earlier link:

Quantitative easing may then be used by the monetary authorities to further stimulate the economy by purchasing assets of longer maturity than only short-term government bonds, and thereby lowering longer-term interest rates further out on the yield curve.

QE does not work its more of the same trickle down BS. Banks will profit off the excess reserves and the rich will reinvest their money in other countries while the average person still suffers...blah.


Posted Via ATS Mobile: m.abovetopsecret.com

Originally posted by acmpnsfal
QE does not work its more of the same trickle down BS. Banks will profit off the excess reserves and the rich will reinvest their money in other countries while the average person still suffers...blah.

 

Posted Via ATS Mobile: m.abovetopsecret.com

 

I tend to agree with this. I also think that the people running the Fed feel pressure from all sides to do something... and this is about all they have left.

Originally posted by longlostbrother

Originally posted by spangledbanner

Originally posted by longlostbrother

Originally posted by spangledbanner
This is extraordinary indeed. Im not surprised the dollar fell sharply after this lunacy was announced.

What is the strategy? To devalue the USD to improve exports? Cause a GFC and make a heap exporting food? Does the Government need to do this since Central Banks are turning away from the USD and diversifying?

This crazy announcment exposes the so called 'fiscal cliff' talks for the nonsense they are. How can the Federal Reserve do this while the Government talks about a 'fiscal cliff'? It makes no sense at all.

edit on 13-12-2012 by spangledbanner because: (no reason given)

LOL.

There's no REAL connection between the fiscal cliff and this policy decision...

Dont you find it strange that they are negotiating a debt limit yet the Federal reserve can just decide to do this? I find it strange to say the least.

No.

The biggest threat the "cliff" poses is to economic growth.

If it's not resolved then:

the current policy scheduled for the beginning of 2013 – which features a number of tax increases and spending cuts that are expected to weigh heavily on growth and possibly drive the economy back into a recession

bonds.about.com...

The QE is meant to ALSO stimulate growth. They seem if anything to work in tandem, making the decision more logical than anything else.

Quantitative easing increases the excess reserves of the banks, and raises the prices of the financial assets bought, which lowers their yield.[7]

Expansionary monetary policy typically involves the central bank buying short-term government bonds in order to lower short-term market interest rates. However, when short-term interest rates are either at, or close to, zero, normal monetary policy can no longer lower interest rates. Quantitative easing may then be used by the monetary authorities to further stimulate the economy by purchasing assets of longer maturity than only short-term government bonds, and thereby lowering longer-term interest rates further out on the yield curve.

en.wikipedia.org...

edit on 13-12-2012 by longlostbrother because: (no reason given)

edit on 13-12-2012 by longlostbrother because: (no reason given)

Why worry about a debt limit when the Fed can just print all the /money' in the world? Why even waste time talking about it?

And the whole Qauntitative Easing thing was tried in Japan. It works great for the rich. Low interest rates are great for the rich.

And debt is the biggest problem not growth. The days of America printing their way out of trouble are drawing to a close. America cant keep the Reserve Status if it cant live within its means. Printing more and more money is not living within your means.

Growth is not a problem. America is the largest economy in the world. The problem is that American leaders are incompetent and irrisponsible.

America is also egocentric. If you think the world will sit back and allow America to devalue its currency and keep the Reserve Status you are dreaming. America will have another humiliating Credit Downgrade before long.

America must live within its means. It needs a budget like everyone else. America's learn how to manage its economy like everyone else.

reply to post by longlostbrother


If the reserve is creating this money to pay for these then yes this does effect the dollar value and all people.
Of course they don't care about anyone but themselves or we wouldn't be in this mess because the federal bank would not have been privatized

reply to post by texasgirl


It means the money you have today is a hella lot less in value than yesterday! Don't forget about retirement monies, they just went down as well in value.

Originally posted by texasgirl
Does this mean the dollar is collapsing? What does this mean to us in the near future?

If memory serves it means get out the wheelbarrow , cuz you're going to need it to haul enough cash to the store for a loaf of bread .

Seriously though , I'm pretty sure it has to mean inflation but I don't think it will be that severe yet , but if we keep on the bottom's going to fall out sooner or later .

The writing has been on the wall for a long time now, yet most of the people either ignore the facts of the dollars instability due to their belief in our government, or their inability to accept the truth of our fiat monetary system being devalued. Our only recourse is to return to a metal based monetary system where there is real value in the currency we use. Yet we all know this will not be allowed to happen, as it creates 'real' wealth, something TPTB does not want anyone to obtain.
We should hope that we have prepared enough, that our neighbors have done the same and our government does not have some standing order to round up those who have planned for sustainability so they do not provide any means for small localities to gain a foot hold.

I ask if there is there anyone out here who is willing to speculate when hyperinflation will happen?

Originally posted by Mister1k
reply to post by texasgirl

 

It means the money you have today is a hella lot less in value than yesterday! Don't forget about retirement monies, they just went down as well in value.

Not even vaguely true.

I watched an extremely good video overview of the situation early today. Check it out.

Ben Bernanke throws the dollar over the Currency Cliff

reply to post by ChaoticOrder


Thanks. Peter Schiff is awesome.