The U.S. Dollar is without a doubt the most hated currency on the planet. The problem is, everyone knows it. Investor sentiment is at an all time low and open interest for the dollar (symbol: UUP, US Dollar ETF) stands at an incredible 97% on the short side. The Obama Administration doesn’t even have a dollar policy in place while the Federal Reserve’s printing presses are set on overdrive. Their latest initiative, to purchase worthless mortgage backed securities off the banks balance sheets in an effort to keep a lid on mortgage interest rates is as deluded as their other failed attempts to re-inflate the economy.
Archive for October, 2009
The Worlds Most Hated Currency
On October - 26 - 2009
Quantitative Easing… In Plain English
On October - 13 - 2009
Back in the dark days of 2008 the Federal Reserve lowered it’s Discount Rate” (the short term rate at which it lends to financial institutions) down to .25%. In effect, it had reduced the return on government bond yields down to 0%. Adjusting the Fed Funds rate is a tool given to the Federal Reserve to battle inflationary pressures and to defend the U.S Currency from devaluation. Protecting the purchasing power of the currency is the Fed’s primary purpose.
