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Posts Tagged ‘USD’

QE2 Is Damaging The Economy And Reducing GDP Growth

April 27, 2011 1 comment

businessinsider

QE2 is going to go down as one of the worst monetary policy initiatives in the history of the modern Federal Reserve era. On almost any metric applied, QE2 ends up not only falling well short of its proposed goals, but actually turns certain metrics like GDP growth negative compared with the prior quarter, and heading in the wrong direction.

Costs Eat into Corporate Profits = No Hiring

Analysts all over Wall Street are starting to revise their 2nd quarter GDP forecasts down, and some like Goldman Sachs have made several downward revisions as higher input costs due to a weak dollar are creating an additional burden on businesses and consumers and thus slowing economic growth.

A weak dollar (Fig. 1) to a point can help exports, but an extremely weak dollar which in combination with QE2 liquidity juicing up commodities even further, turns out to be a net negative on the economy, and risks sending the Read more…

Central Banks Dump Treasuries As Dollar’s Reserve Currency Status Fades

March 16, 2011 Comments off

forbes.com

By AGUSTINO FONTEVECCHIA
Official inflows vs total reserve accumulation – Nomura

Demand for US assets, especially Treasuries, has been waning since the beginning of 2011, with central banks around the world increasing reserve accumulation while dumping the greenback.  More signs that the dollar is dead as the world’s only reserve currency?

Nomura’s FX research and strategy team analyzed the latest numbers from the Treasury’s International Capital System.  “It looks like the trend of weak central bank demand for USD assets is persisting into 2011 (after a very weak Q4),” wrote Nomura’s global head of G10 FX strategy, Jens Nordvig in an email.  From November to January, central banks reduced their US dollar holdings by $9 billion; “given a fairly strong trend in global reserve accumulation Read more…