The dollar started to spike mid-day, threatening the currencies of Brazil and Mexico, and rising vs China, etc against this deflationary shock.
Then the Fed fired the first shot of the liquidity bazooka, relieving the dollar spike for the moment.
Then the Fed fired the first shot of the liquidity bazooka, relieving the dollar spike for the moment.
If the dollar spikes enough, several countries would have to sell part of their $6-7T in U.S. treasury holdings to pay their bills.
Fed would probably need to buy that if it happens, with trillions of new dollars, easing the dollar again.
lynalden.com/global-dollar-…
Fed would probably need to buy that if it happens, with trillions of new dollars, easing the dollar again.
lynalden.com/global-dollar-…
Basically, the amount of liquidity and new dollars coming in the next weeks and months will be huge.
It's a control loop. The bigger the global deflationary shock is, the more liquidity injection and Fed balance sheet expansion that will happen.
It's a control loop. The bigger the global deflationary shock is, the more liquidity injection and Fed balance sheet expansion that will happen.
