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I'm sorry for the vanity but I have a question for our economists on this site. I'm in the process of moving at least some of my investments into more secure holdings. However, I was wondering if it would be possible that pumping $1T into the economy could trigger hyperinflation. I've been reading through this issue on various sites and it seems that some feel that hyperinflation could be trigger by the government failure to find buyers or pumping large amounts of dollars into the economy without proper tax revenues. Has there been any serious thought given about this issue...

The dollar rose through $1.40 against the euro for the first time in three weeks on Wednesday as hopes were raised that the US government would push through its bail-out of the financial system. Analysts said the dollar was also supported by increasing signs that financial institutions outside of the US were suffering in the wake of the credit crisis. Hans Redeker at BNP Paribas said the euro’s poor performance against the dollar this week – the single currency has dropped more than 4 per cent – was due to relative balance sheet adjustments at financial institutions. He said European...

Hey guys..and gals. I haven't posted on FR in some time. I've been traveling for a good portion of the year. But, the $700 billion bailout has gotten my attention, so I wanted to post something. I have never posted a vanity before now and don't want to risk my Member in Good Standing status with this question. But, I'll never know unless I try. Are we allowed to promote personal websites on here? If I had an idea for a product that I felt my fellow Freepers would enjoy, could I direct you to the website with the guarantee...

The US dollar gained on the euro Wednesday on demand for US dollars from foreign banks and ahead of a Senate vote on the $700 billion bailout proposal and a proposal to raise FDIC protection on deposits from $100,000 to $250,000. The euro declined ahead of Thursday’s meeting of the European Central Bank, where Eurozone interest rates are expected to be held at 4.25 percent. In late morning trade in New York, the dollar traded at $1.4030 to the euro. The pound weakened against the dollar and the euro after the Chartered Institute of Purchasing and Supply reported that its...

(CEP News) - A day after the U.S. House of Representatives rejected the $700-billion bailout plan, the U.S. economy is showing few signs of weakness on Tuesday, with equity markets rebounding and the U.S. dollar making broad-based gains. RBC Capital Markets chief analyst George Davis said in an e-mail that people are having trouble borrowing U.S. dollars due to access to credit. "This has put the greenback at a premium in the market," he said. "Thus, people are bidding it up." The euro is down 0.0377 to 1.4060 and the pound sterling is down 0.0298 to 1.7789, both against the...

(CEP News) - Gold is currently the sole commodity selling off on Tuesday morning, in sharp contrast to Monday when it was rallying. Chicago Board of Trade (CBOT) gold is trading down $16.60 per ounce to $877.80 USD, as markets hope for a revised bailout plan that will eventually be passed by the U.S. House of Representatives following yesterday's surprise development. "Yesterday's turmoil in the financial markets was true testimony to gold's status as a safe-haven asset, with the surprise rejection by U.S. Congress of the proposed $700bn bailout plan inducing fear in risky assets but supporting a close back...

Oil prices tumbled more than $6 a barrel Monday, briefly slipping below the $100 level as traders bet that global demand for petroleum products will keep falling despite a planned $700 billion U.S. financial bailout. A stronger dollar also weighed on crude prices as investors who bought oil and other commodities as a hedge against inflation sold their contracts. Light, sweet crude for November delivery fell as low as $99.80 a barrel in morning trading on the New York Mercantile Exchange before edging up slightly to $100.28, down $6.61. The contract fell Friday $1.13 to settle at $106.89. Crude has...

NEW YORK, Sept. 30 — The dollar rose against the euro and the pound on Monday as investors worried that the U.S. financial crisis was spreading to Europe. The U.S. House of Representatives Monday unexpectedly rejected a 700-billion-dollar bailout plan for financial industry, sending Wall Street crashing. The Dow Jones industrials average plunged nearly 780 points, the worst single day drop ever. Risk aversion in currency trading helped low-yielding yen and Swiss franc. As for the euro and the British pound, they kept loss against the dollar as investors focused on the crisis of the European bank system. Over the...

US Treasury debt staged a meteoric rally as investors scrambled for the safe haven of American government securities. The 30-year Treasury bond’s price rose more than three points. The flight to safety was even after the Federal Reserve said it would substantially increase currency swap limits to $620 billion (£342 billion ) with nine leading central banks in response to short-term strains in the money markets. In its latest severe sell-off, the already sharply weaker pound plummeted by almost 5 cents against the dollar today compared with its level at the close of New York trading on Friday. The fall...

I was just thinking during my haze before the morning Joe kicks in. If the US Gov't, Bush and Congress thinks saving the faltering banks and such is of such high priority and the dollar looks to take a major hit then they should do what is right, temporarily suspend all non-essential government agencies to balance the books. No foodstamps, no welfare, no department of education, interior, no anything that is not pertinent to the stability to the nation.

US dollar set to be major casualty of Hank Paulson's bailout “This may prove to be the dollar’s epochal moment – the moment historians look back at as its major turning point.” By Edmund Conway Last Updated: 10:47PM BST 22 Sep 2008 Comments 108 | Comment on this article The dollar could be at a major turning point Photo: AP Whether or not tomorrow’s accounts of today’s turmoil prove David Owen of Dresdner Kleinwort right; whether or not this is the beginning of the end of the dollar’s pre-eminence in the world’s central banks and foreign exchanges, the economic landscape...

The clean-up bill for the damaged US financial system has landed with a thud in the government bond market. There has been a big jump in yields on US government debt since news of the plan to remove $700bn of toxic assets from the balance sheets of US bank first emerged. After falling to a low of 3.24 per cent last Wednesday – the day when panic about global credit markets was at its height – the yield on the 10-year Treasury note had climbed back to 3.90 per cent early on Monday. On Tuesday, the 10-year benchmark was yielding...

…In his press conference, Paulson assured us that this plan was designed to safeguard our savings. But in typical government fashion, the plan will have the reverse effect as savings is wiped out through inflation... ...Paulson's distress and confusion was clearly evident when he fielded questions from reporters. The first asked Paulson to describe his fears regarding the probable economic consequences of government inaction. Paulson provided no answer and promptly exited stage right… …While it is dizzying to predict how this plan will be implemented, it is fairly simple to foresee the macroeconomic consequences. The U.S. dollar will be shattered...

Given last week's dramatic events — the bankruptcy of Lehman Brothers, the end of Merrill Lynch's independence, and an $85 billion US-government bailout of insurer AIG — most financial institutions are likely to become more sensitive to the state of their net worth. For instance, all it takes for a financial institution that has a net worth of $30 billion and assets of $600 billion to go under is for the value of assets to fall by 5%. In the current financial climate, it can easily happen; hence, most financial institutions are not immune from the potential threat of going...

Treasury Secretary Henry Paulson said Sunday that foreign banks will be able to unload bad financial assets under a $700 billion U.S. proposal aimed at restoring order during a devastating financial crisis. "Yes, and they should. Because ... if a financial institution has business operations in the United States, hires people in the United States, if they are clogged with illiquid assets, they have the same impact on the American people as any other institution," Paulson said on ABC television's "This Week with George Stephanopolous."

I recently chatted with Rep. Ron Paul (R-Texas) about the gigantic financial bailout that the government is preparing to undertake. Some excerpts from the interview: What's your take on this huge financial bailout? "It's more of the same. More debt and more inflation and more pressure on the dollar. Ultimately, although the markets are responding very favorably at the moment, I think it is going to be devastating to the dollar and to our financial situation in this country." But don't we need to get these toxic assets off banks' balance sheets? "Sure, they need to be removed. Somebody needs...

An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense - perhaps more clearly and subtly than many consistent defenders of laissez-faire - that gold and economic freedom are inseparable, that the gold standard is an instrument of laissez-faire and that each implies and requires the other. In order to understand the source of their antagonism, it is necessary first to understand the specific role of gold in a free society.

THE US Treasury’s $700 billion (£380 billion) plan to bail out the banks could undermine the dollar, economists warn. The plan, details of which were unveiled yesterday, will seek congressional approval to raise the total amount the US government can borrow from $10.6 trillion to $11.3 trillion. It also gives Hank Paulson, the US Treasury secretary, immunity from legal challenge under the plan. The US Treasury will buy mortgage-related securities “from any financial institution having its headquarters in the United States”, draft legislation said. Securities issued before September 17 will be eligible for inclusion. Word of the proposals created a...

The dollar jumped Thursday night after the government said it was putting together a plan to help banks get rid of bad debts. In overnight trading, the dollar jumped to 106.19 yen, while the euro slid to $1.4247 and the pound dropped back down to $1.8076. Earlier in the day Thursday, the 15-nation euro had traded at $1.4370, slightly down from $1.4376 late Wednesday. The British pound slid to $1.8192 from $1.8245, while the dollar dropped to 104.93 Japanese yen from 105.24. The plan will need approval from Congress. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke told...

The dollar suffered yesterday as coordinated action from global central banks to ease liquidity tension in the world's money markets dented its newly found status as a safe-haven currency. Analysts said the dollar had previously benefited as worries over the state of the global financial system heightened risk aversion, prompting US investors to repatriate funds that had been invested in foreign equities, while lower inflation expectations had supported demand for US bonds."In a world where cross-border equity investing collapses and bond flows remain stable, there is a net inflow back into the dollar," said Michael Metcalfe of State Street Global...

(Updates with comments from Communist Party magazine in paragraphs 4 and 14-16) By Chris Buckley BEIJING, Sept 17 (Reuters) - Threatened by a "financial tsunami," the world must consider building a financial order no longer dependent on the United States, a leading Chinese state newspaper said on Wednesday. The commentary in the overseas edition of the People's Daily said the collapse of Lehman Brothers Holdings Inc "may augur an even larger impending global 'financial tsunami'." The People's Daily is the official newspaper of China's ruling Communist Party, and the overseas edition is a smaller circulation offshoot of the main paper....

AGI) – Washington, 18 Sept. – The central banks of the US, Japan, Europe, Canada, Great Britain and Switzerland have announced coordinated actions to deal with the persistent pressure on the liquidity of the dollar. In a note, the Fed, ECB, BOJ, BOE, SNB and Bank of Canada have said that they will continue to work together to take the appropriate measures on the markets. The note continues: these interventions, along with the other actions taken individually in the last few days by the central banks are aimed a improving conditions of liquidity on global financial markets. The central banks...

Bank of Japan announces dollar swap with US Fed (33 mins ago) The Bank of Japan announced a dollar swap of up to US$60 billion with the US Federal Reserve as part of a coordinated action by the world's central banks faced with market turmoil. The Japanese central bank said in a statement that it held an emergency meeting to supply US dollar funds to market participants in Japan in conjunction with the Fed. It said that the European Central Bank, the Bank of Canada, Bank of England and Swiss National Bank were taking part in coordinated measures. "These measures,...

LONDON (AFP) — The Bank of England announced Thursday that it would conduct a dollar swap of 40 billion dollars (22 billion pounds) with the US Federal Reserve as part of a co-ordinated central bank liquidity plan.

Today, the Bank of Canada, the Bank of England, the European Central Bank (ECB), the Federal Reserve, the Bank of Japan and the Swiss National Bank are announcing coordinated measures designed to address the continued elevated pressures in US dollar short-term funding markets. These measures, together with other actions taken in the last few days by individual central banks, are designed to improve the liquidity conditions in global financial markets. The central banks will continue to work together closely and will take appropriate steps to address the ongoing pressures. Bank of England action The Bank of England will offer...

NAPLES, Fla. — Several months ago, economist David Hale had a private meeting with Federal Reserve Chairman Ben Bernanke, who was trying to ward off a recession by lowering interest rates and increasing the money supply in the economy. The problem with that approach is that the value of the dollar plunged against foreign currencies, causing crude oil prices to skyrocket because oil is pegged to the dollar. It affected food prices, gasoline and family budgets. "Ben, you are playing a very unique role in world economic history," Hale recalled telling Bernanke, an expert in the Great Depression. "You are...

NEW YORK (MarketWatch) -- Gold futures surged more than $68 an ounce on Wednesday, the most since 1980, as news of the U.S. government's takeover of the biggest U.S. insurance company and worries about other financial institutions worldwide fueled massive safe-haven buying. Gold for December delivery was last up $63.90, or 8.2%, to $844.40 an ounce. It earlier jumped to $849.00, or as much as $69.50 an ounce. This would represent gold's biggest one-day jump in dollar terms since 1980, when the precious metal began trading on the Comex division of the New York Mercantile Exchange.

Threatened by a "financial tsunami," the world must consider building a financial order no longer dependent on the United States, a leading Chinese state newspaper said on Wednesday. The commentary in the overseas edition of the People's Daily said the collapse of Lehman Brothers Holdings Inc (LEH.P:)"may augur an even larger impending global 'financial tsunami'." The People's Daily is the official newspaper of China's ruling Communist Party, and the overseas edition is a smaller circulation offshoot of the main paper. Its pronouncements do not necessarily directly reflect leadership views, but this commentary by a professor at Shanghai's Tongji University suggested...

The dollar recovered from early sharp losses on Monday, while the yen and Swiss franc were lifted by demand for safe haven assets. Turbulence on FX markets followed the dramatic events in the US financial sector, where Lehman Brothers filed for bankruptcy and Bank of America offered $50bn for Merrill Lynch. “The liquidation of Lehman’s positions is likely to lead to increased volatility in financial markets and could place greater pressure on already distressed markets,” said Lee Hardman at Bank of Tokyo-Mitsubishi UFJ. Investors’ immediate reaction to the Lehman collapse was to sell the dollar against the euro and sterling...

The United States is mired in a "once-in-a century" financial crisis which is now more than likely to spark a recession, former Federal Reserve chief Alan Greenspan said Sunday. The talismanic ex-central banker said that the crisis was the worst he had seen in his career, still had a long way to go and would continue to effect home prices in the United States. "First of all, let's recognize that this is a once-in-a-half-century, probably once-in-a-century type of event," Greenspan said on ABC's "This Week." Asked whether the crisis, which has seen the US government step in to bail out...

China, which holds a fifth of its currency reserves in Fannie Mae and Freddie Mac debt, may cut the portion held in US dollars, according to China International Capital Corp (CICC), one of the nation's biggest investment banks. The US government this week seized control of the two mortgage-finance companies, which account for almost half of the home-loan market in the world's biggest economy, to prevent defaults from crippling them. China holds up to $400 billion in the two firms' debt, CICC Chief Economist Ha Jiming said in a report Thursday. "The crisis has made Chinese officials realize it's a...

Gold futures ended at their lowest level in nearly 11 months Wednesday as the U.S. dollar strengthened, losing ground for an eighth straight session and tying a seven-year record for a string of losses. Gold for December delivery fell $29.50, or 3.7%, to $762.50 an ounce on the Comex division of the New York Mercantile Exchange, the lowest closing level since Oct. 24, 2007. Gold futures also dropped for eight straight sessions in August, the longest losing streak since May 2001. It ended August's trading down nearly $90, the biggest monthly loss ever in dollar terms. Sector sentiment is very...

Brazil and Argentina are ready to stop using U.S. dollars to trade goods between them. Brazil's president tells the Buenos Aires-based Clarin newspaper that exports and imports between the two nations will be bought and sold in local currency — reals and pesos. President Luiz Inacio Lula da Silva did not say when the measure would take effect. Silva says the move will boost bilateral trade, which reached $US17.6 billion so far this year through July. During that time, Brazil sold more to Argentina than it bought, building a US$3 billion trade surplus.

The latest cheap manufacturing site for European companies is not in Asia or eastern Europe but the United States, say top executives from some of the continent’s biggest companies. “It may sound like a joke but it can be cheaper than you imagine to manufacture there,” the chairman of one of Germany’s largest automobile groups told the Financial Times. The reason is less the level of the dollar, which remains relatively low in spite of the euro’s recent plunge, but rather the huge level of incentives some US states are offering companies to set up factories in their region. Tennessee,...

When the price of crude oil shot up from $100 in early March to $145 in early July, several old friends in economics and journalism blamed it on the Federal Reserve. The low fed funds rate caused the dollar to fall, they argued, which fueled a boom in commodity prices. Even the price of rice was blamed on Ben Bernanke. The Fed was said to be printing money with abandon, even though the monetary base is up 2% over the past year. Now that the dollar has been rising and commodity prices falling, consistency requires the Fed's critics to explain...

Main Bank of China Is in Need of Capital By KEITH BRADSHER HONG KONG — China’s central bank is in a bind. It has been on a buying binge in the United States over the last seven years, snapping up roughly $1 trillion worth of Treasury bonds and mortgage-backed debt issued by Fannie Mae and Freddie Mac. Those investments have been declining sharply in value when converted from dollars into the strong yuan, casting a spotlight on the central bank’s tiny capital base. The bank’s capital, just $3.2 billion, has not grown during the buying spree, despite private warnings from...

Oil prices extended their losses Wednesday, a day after plunging nearly $6 a barrel, as oil market traders shifted their attention from tropical weather to a stronger dollar and falling demand for petroleum products

LONDON (AFP) – The euro on Tuesday slid below 1.45 dollars for the first time since February as the market anticipated lower interest rates in the eurozone and stronger growth in the United States, analysts said. In early London trade, the European single currency dropped to 1.4467 dollars, the lowest point since February 12. It rose from this level to trade at 1.4524 dollars in late European trade, compared with 1.4606 dollars late on Monday in London. Elsewhere, the yen fell slightly after Monday's abrupt resignation of Japanese Prime Minister Yasuo Fukuda. The pound meanwhile struck a record low versus...

GENEVA (Reuters) - Many of the world's wealthiest people have moved their money out of stocks and bonds and into cash, the head of HSBC's (HSBA.L) Swiss private banking unit said on Monday. "The first half of 2008 has seen a notable change in client expectations and investment choices," said Peter Braunwalder, chief executive of HSBC Private Bank (Suisse), the British-based bank's main affiliate catering to the ultra-rich. "Faced with inflation worries, volatile asset prices and sudden changes in exchange rates, a majority of investors have reduced their transaction volumes in equities, bonds, and structured products," he told a news...

Barack Obama's tax advisers recently posted a piece in the Wall Street Journal about their candidate's tax plans. Their article was designed to triangulate, painting their candidate as a tax cutter and the Republican opposition as a secret tax raiser. It was well written and well argued — not that you can really trust anything you read about what candidates will or will not do once in office. In any case, I was discussing the piece with a person whose politics are certainly left of center. She said to me something along the following lines: I'm really not sure I...

Rule changes for commercial banks are acting as cover for exchange rate intervention, writes Ambrose Evans-Pritchard China has resorted to stealth intervention in the currency markets to amass US dollars, using indirect means to hold down the yuan and ease the pain for its struggling exporters as the global slowdown engulfs the economy. A study by HSBC's currency team in Asia has concluded that China's central bank is in effect forcing commercial banks to build up large dollar reserves, using them as arms-length proxies in a renewed campaign of exchange rate intervention. advertisementBeijing has raised the reserve requirement for banks...

NEW YORK (Reuters) - Crude oil prices fell more than 5.4 percent on Friday in the biggest one-day slide since 2004 as dealers turned their focus to rising supply levels and weakening global demand. A rebound in the U.S. dollar encouraged the sell-off, applying downward pressure across the commodities markets by weakening the purchasing power of buyers using other currencies, dealers said.

<p>NEW YORK (AP) -- Wall Street capped a volatile week with sharp gains Friday as oil retreated from this week's rally and after Federal Reserve Chairman Ben Bernanke said inflation pressures are likely to moderate. The Dow Jones industrial average rose nearly 200 points.</p>

Oil, the David Copperfield of financial market assets, pulled another impressive trick out of its hat yesterday. But it's getting harder to believe the illusion any more. Crude surged $5.62 (U.S.) to $121.18 a barrel in New York yesterday, storming back after dipping below $112 earlier in the week. The rebound has certainly caught the attention of the oil-fuelled Canadian stock market, which is up 3.6 per cent over the past two days. Sure, there were a few reasons tossed out there for oil's move: sabre-rattling by major oil producer Russia over a U.S. missile defence pact with Poland, jitters...

Headline at http://www.marketwatch.com/ Crude tops $121 to close at a more than two-week high; natural gas gains SAN FRANCISCO (MarketWatch) -- Crude-oil futures climbed above $121 a barrel Thursday to close at a more than two-week high, as the dollar fell against other major currencies and as tensions between the U.S. and Russia worsened.

The Strong Dollar Illusion By Peter Schiff Economists who now see American troubles spreading around the world are predicting that foreign central banks will ignore the gathering inflation threat and follow the Fed down the rate cutting path. Similarly, they argue that since the downturn began here, the U.S. recovery will likely be underway while the rest of world is still decelerating. These assumptions have prompted a rally in the dollar, a sell-off in gold, commodities and foreign stocks, and have cast doubts on the ability of foreign economies to "decouple" from the United States. Investors should not take...

In the dozen or so years until 2007, it had become as close to a global orthodoxy in economic policy making as we ever see: Central banks should target a low and stable rate of inflation. This replaced earlier orthodoxies -- such as that central banks should maintain a fixed exchange rate with an ounce of gold, which was abandoned in 1971. Though inflation targeting left far more latitude for government officials to expand the money supply, it too ultimately proved too great a shackle on the exercise of central bank wisdom. The U.S. Federal Reserve, the European Central Bank,...

Editorial: How China's inflation wallops us 12:00 AM CDT on Thursday, August 14, 2008 As an inflation hawk, Richard Fisher, the president of the Federal Reserve Bank of Dallas, is a bit worried about the day the Olympic flame is extinguished. Mr. Fisher, a member of the Federal Reserve committee that influences U.S. interest rates, says China is about to face an inflation conundrum that the Olympics temporarily is holding in check. Beijing tamped down worker wages and subsidized energy to make sure the world sees China in the best possible light. But pressures from rising demand in China aren't...

Dollar surge will not stop America feeling the effects of a global crunch By Ambrose Evans-Pritchard Last Updated: 11:07pm BST 17/08/2008 Two alerts landed on my desk this weekend from the elite markets team at Goldman Sachs. One was entitled "The Dollar Has Bottomed!". Those betting on an imminent disintegration of American economic and political power may have to wait another cycle. Rival hegemons are falling like ninepins. The US dollar index hit an all-time low in March. It crept slowly upwards in the early summer before smashing through layers of resistance over the past month. The surge against sterling,...

A list and way to track number of economic issues and problems associated with Russia and its financial system: Main Google news search including "RTS" Russia Becomes Worst 3rd-Quarter Stock Market on Oil (Update3) - Bloomberg - good read! Investment Week, UK... a near 30% decline in the RTS index in recent months Lukoil cuts sale price of diesel, jet fuel, fuel oil in August - from Polish source Europe Grapples with Russia-Georgia Woes"With energy supplies at risk, the recent conflict in the Caspian region might spur the West to seek other gas and oil sources""The very fact of the...