Quick drive-by post; too busy to do much else.

[randomness]

The last Fed rate cut (and I do mean last, because there's nowhere left for them to go from here) really did for the dollar.

$1.46 to the € and ¥88.7 to the dollar this morning.

That's compared with a $1.34 euro and a ¥91.2 dollar on Monday, before Tuesday's cut.

Nice post in Alphaville on that this morning:

To speculate against a currency - like the dollar - you need to be able to borrow that currency freely and cheaply.

Now look at what the Fed is providing to the markets: unlimited amounts of dollars at close to zero cost.

Wheee!

Comments

This just proves it...

[ddreslough.livejournal.com]

Usury must have been a sin after all, since now the dollar is doing "well" since we're just giving 'em away. Crazy Bernanke's Money Store. OUR PRICES ARE INSANE! No, really. Our prices. They're insane.

[mizkit.livejournal.com]

And compared to a dollar at about $1.26 against the euro last week. I said tensely. *grits teeth*

[r-ness.livejournal.com]

:(

I've been reading in the Irish Times about all the shoppers heading up the M1 to Newry to take advantage of the price differential now that the pound is heading for parity with the euro. Pretty crazy stuff, with mile-long tailbacks and people fighting over shopping trolleys.

Best of luck with everything!

[stolen-tea.livejournal.com]

Wow, so... Unlimited dllars at minimal cost => dollar falls against other currencies => the balance of trade moves in our favor.

I wonder if that was an intentional side effect? But that would presume that someone knew what they were doing.

[r-ness.livejournal.com]

I wonder if that was an intentional side effect?

I suspect it is.

I remain concerned about the unintended effects.

[r-ness.livejournal.com]

In fact, see http://en.wikipedia.org/wiki/Bernanke_Doctrine.

Depreciating the dollar is step 5.

[cubes.livejournal.com]

You know how banks used to give you a toaster and pay you interest to loan them your money, and now they charge you all kinds of fees instead?

Maybe soon it will swing all the way in that direction and they'll start paying us to take their money!