Posted: 8/11/2009 6:07:44 PM EDT
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JERUSALEM, Aug 10 (Reuters) - Israel's central bank said on Monday it will end a more than one-year programme of buying $100 million of foreign currency a day but that it would still intervene in the market on days of unusual movements. The move –– which comes months ahead of the latest market expectations –– sent the shekel more than 1 percent higher against the dollar and was viewed as another precursor to an eventual short-term interest rate increase. 'The Bank of Israel announces that it will from tomorrow (Tuesday) discontinue its program of daily purchases of $100 million in the foreign exchange market which began in July 2008,' it said in a statement. ... 'With the policy rate already close to zero, continued dollar purchases were interpreted as a drive by the Bank of Israel towards looser monetary conditions,' said Roderick Ngotho, an emerging markets strategist at UBS ( UBS - news - people ). 'Removing the dollar purchases ... can be interpreted as pre-tightening with regards to overall monetary conditions'. ... http://www.forbes.com/feeds/afx/2009/08/10/afx6761404.html |
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Perhaps it has to do with this. He was lying (The Fed already has), and now there is proof. Mad props to both Zerohedge and Chris Martenson for noticing this; I missed the facts buried in the CUSIP list. The upshot: The Fed bought nearly half of LAST WEEK'S 7 year Treasury Issuance TODAY. Huh? Remember, after the 5 year auction that went badly (and which I wrote about) the 7yr auction went "well." Rick Santelli (and a lot of other people) agreed - demand was strong. That made no sense to me at the time, coming one day after a near-failure in the 5 year. Well now we know what happened: The Fed pretty clearly pre-arranged, either explicitly or by "suggestion", that the Primary Dealers take up the auction with the promise that The Fed would immediately monetize half what the Primary Dealer's took! Folks, this is beyond bad - it is pernicious and outrageous conduct by The Federal Reserve in conspiracy with the Primary Dealers, both of which are now desperately trying to prop up the US Government Bond Market through subterfuge rather than just buying up the bond issue from Treasury when originally put to the market! If you think the economy and credit markets are "on the mend" why would The Fed do something like this? It would not be necessary unless The Fed was told (by those very same Primary Dealers) that they were going to be unable or unwilling to take down any more Treasury Debt. Folks, let me be clear: The United States HAS OFFICIALLY HIT THE TREASURY DEBT WALL and The Fed and Treasury are engaged in subterfuge and conspiracy in an attempt to hide this from the market. .... http://market-ticker.org/archives/1304-BLATANT-Monetization-Uncovered.html When you start buying your own bonds inflation kicks in full force. |
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