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Dollar may be done here - Be careful

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I believe the bubble will be in commodities in general, with gold being the king. I am not saying that I think gold is in a bubble yet, or that the price will come down far when it peaks though. I actually think gold will soar from here and then become money again at some point.

I don't think gold will ever be in a bubble.

 

If someone, say Puplava or Rogers, says gold will go up with all commodities, then those that listen to this will tend to do one of two things; either go heavily into gold/ silver, or into all commodities, agriculture, oil, metals etc. Considering these investments inflation hedges they will not expect a large correction in them and when it comes may think "Oh it's not inflation, it looks like deflation... maybe the [conventional] deflationists are right after all and they were in a bubble " and then sell [ btw I agree with Roubini that the carry trade is creating a bubble in assets at the moment....and that it will be short-lived].

 

I don't expect you to agree, but I trust you see the logic.

 

I wouldn't be surprised to see gold go back to 900 at some point, but this would just be considered a reversal of capital from the periphery [peripheral currencies] to the centre. Gold would get hit, but not as hard as some other currencies. I'd expect gold to quickly recover and go on to test new highs against the dollar as a competing safe haven / reserve currency ....and never a bubble.

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The FED have been well known for blowing bubbles in asset prices have they not, that has been there policy for years one bubble after another.

 

Best be in the right bubble at the beginning and get out just before it pops. The amount of money being pumped into the system means this bubble is going to be even larger than the last to me.

 

 

I agree.

 

It's amazing what you can do with loose money.

 

What with devaluation, I wouldn't be surprised for the FTSE to hit new highs next years.

 

Monetary policy will remain too loose for too long. The play-off between the economy and jobs on one side and asset prices on the other has only one winner in my mind.

 

However, once blown high, the reaction to any tightening could be stark. Second half next year is my guess for the deleveraging process to kick in again as stimulus is withdrawn.

 

All the shills are calling for this to happen too early I think.

 

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I agree.

 

It's amazing what you can do with loose money.

 

What with devaluation, I wouldn't be surprised for the FTSE to hit new highs next years.

 

Monetary policy will remain too loose for too long. The play-off between the economy and jobs on one side and asset prices on the other has only one winner in my mind.

 

However, once blown high, the reaction to any tightening could be stark. Second half next year is my guess for the deleveraging process to kick in again as stimulus is withdrawn.

 

All the shills are calling for this to happen too early I think.

 

I m one of them :lol: I do think a reversal is imminent in the USD which is bearish for all other assets...For me "things" have reached an extreme. The USD bulls are at all time lows, sellers at all time lows. I haven't acted as yet, apart from starting to building short in AUDUSD...Gold buyers are at all time highs versus sellers at all time lows. Something has to give, I feel it is close, but with momentum on the side of the gold bulls and USD shorts this could run on for a while yet. God could easily get go up another 100 USD, but the bigger this band gets stretched the larger the reversal.Its a very interesting situation...best of luck to all who are putting their hand in whatever direction in the markets (long or short) they are taking.

 

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G20 leaves door open for fresh pressure on dollar

 

LONDON (Reuters) - The U.S. dollar may come under renewed pressure from emerging market currencies and the euro after a meeting of the world's top finance officials failed to take concrete action on rebalancing global money flows.

 

Finance ministers and central bank governors of the Group of 20 major countries, meeting in Scotland at the weekend, launched a "framework" in which they will discuss how to reduce trade and savings imbalances between nations.

 

But their communique talked only in general terms about rebalancing economies, and implied they might not agree on specific policies for individual countries to adopt before the end of next year at the earliest.

 

The result may be a continuation of heavy fund flows into emerging markets, boosting currencies there. And central banks intervening to slow currency appreciation may keep investing much of the money they obtain in the euro, pushing up that currency too.

 

"We're probably looking at fresh dollar weakness in the short term" in the wake of the G20 meeting, said Kenneth Broux, senior markets economist at Lloyds TSB.

 

CHINA, BRAZIL

 

At the center of the currency issue is China's reluctance to permit appreciation of its tightly controlled yuan, which it has kept flat against the dollar since mid-2008.

 

That has prompted additional fund flows into emerging market currencies that do trade freely, such as the Brazilian real, which has soared over 30 percent this year. Last month, Brazil slapped a 2 percent tax on foreign investments in fixed income and stocks in an effort to slow the real's rise.

 

Last week, Brazilian officials said they would discuss this problem at the G20 meeting. But the G20 communique made no reference to the issue, and Brazil appeared to get little sympathy from a senior official of the International Monetary Fund, which is a key player in the global rebalancing campaign.

 

Youssef Boutros-Ghali, who chairs the International Monetary and Financial Committee, the IMF's policy steering committee, told Reuters that Brazil's tax was unlikely to work and that "we should not be fixated on currencies.

 

Officials from several countries, including Brazil, Japan and Indonesia, urged China on the sidelines of the meeting to let the yuan move more flexibly.

 

But as a group, the G20 did not press China on the sensitive issue, G20 sources said. British finance minister Alistair Darling told reporters: "We didn't discuss the renminbi. I think that's a question for China rather than us."

 

In fact, China appeared in a combative mood. Finance Minister Xie Xuren and central bank governor Zhou Xiaochuan, speaking to the official Xinhua news agency after the meeting, made no mention of the yuan and instead warned developed countries to focus on the quality of their own policies.

 

Xie said countries with global reserve currencies should work to maintain the currencies' value, to avoid destabilizing the global economy -- implying it was up to Washington, not Beijing, to resolve the issue of the weak dollar.

 

The silence on the yuan in Scotland suggested countries accepted the G20 was not a forum in which to press China. The other main global economic forum, the Group of Seven nations, last met in October; it did mention the yuan, but only in the softest terms, "welcoming China's continued commitment" to free up the yuan without referring to a timetable. Continued...

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"For now traders are going with the flow - The trend is your friend"

 

Dollar down again as G20 backs ongoing stimulus

By PAN PYLAS (AP) – 2 hours ago

 

LONDON — The euro pushed back up above $1.50 Monday after finance ministers from the Group of 20 rich and developing countries steered clear from addressing the weakness of the U.S. currency against most of its competitors at a meeting over the weekend.

 

At the meeting in St. Andrews, Scotland, the finance ministers pledged to "continue to provide support for the economy until the recovery is assured" — in effect telling the markets that borrowing costs will not be rising any time soon.

 

As a result, investors continued Monday to borrow cheap dollars — with the Fed funds rate in a range of 0-0.25 percent, the cost of borrowing dollars is anything but prohibitive — to finance riskier investments, such as stocks and oil. According to economist Nouriel Roubini, developments in financial markets over recent months, particularly the sharp rise in stocks since March, have been characterized by this "mother of all carry trades."

 

In a note prepared for the meeting, the International Monetary Fund said the dollar was "now serving as the funding currency for carry trades," and that these trades may be "contributing to upward pressure on the euro."

 

That's certainly been the case Monday, with the euro rising 0.9 percent to $1.5011, the first time it has breached the $1.50 barrier this month.

 

"The G-20 has given the green light to carry trades to continue," said Neil Mackinnon, global macro strategist at VTB Capital in London.

 

However, he warned that carry trades "have a tendency to blow up when you least expect it" and that these can be "quite sudden and violent moves."

 

Mackinnon said it's impossible to predict when these carry trades will blow up and that for now traders are going with the flow — "the trend is your friend," he said.

 

The IMF further fanned the dollar saying by saying in its note to the G-20 that the U.S. currency was still "on the strong side" in terms of its trade-weighted basis.

 

While the dollar may be weak against the euro, it is considered to be overvalued against the Chinese yuan as the Chinese monetary authorities try to keep their currency weak in order to boost economic activity by keeping exports keenly priced.

 

Many of the world's leaders have spoken of the need for "rebalancing" the world economy.

 

For the rebalancing of the economy to take place, the U.S. will have to consume less while it builds up its savings rate, while surplus countries, including dollar-rich China, start spending more to take up the slack left from lower U.S. spending. One way of helping this take place is to get the yuan to rise towards more normal levels against the dollar.

 

But so far nothing has happened at least on a coordinated front.

 

"The G-20 meeting failed to deliver any real specifics as to how it intended to rebalance the global economy, suggesting the drift in the dollar is not likely to be addressed on a coordinated basis," said Daragh Maher, deputy head of global foreign exchange strategy at Calyon Credit Agricole.

 

With neither policy nor the data standing in the way, Maher said the euro could now move back up to the recent 15-month high of $1.5060.

 

A further sustained rise up to the all-time high of $1.6038 could well stoke concerns in Europe's capitals that the high value of the currency was threatening the economic recovery.

 

"It is difficult to see this policy mix as anything other than a recipe for continued dollar weakness, particularly when we add the familiar absence of concerted plans for cooperative, corrective action by the G-20," said Neil Mellor, senior currency strategist at Bank of New York Mellon.

 

"With the dollar therefore back on course for some discomfort-inducing levels — thanks, in addition, to the IMF's rather frank assessment that the dollar is still 'on the strong side' — the tolerance thresholds of various central banks and finance ministries is once more back under the spotlight," he added.

 

 

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Was Jim right, is this the beginning of the end for the dollar?

 

Dollar weakens broadly

The greenback tumbles against rivals after an IMF report suggests it could fall further and the G-20 is mum on the U.S. currency's decline.

 

NEW YORK (CNNMoney.com) -- The dollar fell broadly Monday, with the euro climbing above $1.50, after a report from the International Monetary Fund suggested the U.S. currency could fall further.

 

The greenback was also under pressure after a weekend meeting of the G-20 failed to address the greenback's ongoing decline.

 

Overseas stock markets rallied and U.S. stock futures were signaling a strong opening when trading begins in New York.

 

The dollar index, which gauges the greenback's value against a basket of currencies, fell 0.8% to a two-week low of 75 from 75.77.

 

The IMF said the dollar "remains on the strong side" despite recent declines, and that the greenback is now serving as "the funding currency for carry trades."

 

The so-called carry trades, in which investors use the currency of a country with low interest rates to fund investments in more risky markets, have helped push the euro and emerging market currencies higher, the IMF said.

 

The 16-nation currency was up 0.9% versus the dollar to $1.4987 after rising above $1.50 for the first time since Oct. 26. The U.K. pound was up 1% against the dollar to $1.6780.

 

The Group of 20 major economies ended a weekend meeting in Scotland without mentioning the dollar in their communiqué. But the G-20 did announce a "framework" in which they will discuss how to reduce trade and savings imbalances between nations.

 

The G20's decision to focus on fiscal policy, leaving monetary policy unchanged, "highlighted that global leaders continue to believe that it is too early to implement an exit strategy and that the commitment to global growth remains the priority," said Camilla Sutton, currency strategist at Scotia Capital in Toronto.

 

"We think this will re-focus markets on relative interest rates," Sutton said.

 

Last week, the Federal Reserve announced plans to hold interest rates at historic lows near 0% for an "extended period." The expectation for low interest rates going forward was reinforced Friday when the U.S. government said the nation's unemployment rate rose to 10.2%

 

As other nations move to raise interest rates, analysts say the dollar will continue to be used to fund carry trades, which could push the greenback even lower.

 

Meanwhile, the dollar continues to suffer as investors' appetite for risk grows and demand for the greenback as a safe haven wanes.

 

Stocks and commodities rallied Monday, with the price of gold hitting another all-time high and oil prices gaining more than $1 a barrel.

 

The Japanese yen, which is also seen as a safe haven, was slightly lower versus the dollar at ¥89.91 .

 

 

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FOREX-Dollar slides on G20, IMF; euro above $1.50

 

* Dollar falls broadly after G20, U.S. jobs data

 

* No rush to withdraw stimulus boosts risk appetite

 

* Euro above $1.50 EUR=, dollar index below 75.00 .DXY

 

LONDON, Nov 9 (Reuters) - The dollar weakened broadly on Monday, pushing the euro above $1.50, after a weekend G20 meeting and U.S. jobs data last week did little to alter the view that U.S. interest rates will stay low for some time.

 

The conviction that U.S. -- and other -- interest rates will remain low for the forseeable future and liquidity still plentiful boosted demand not just for non-dollar currencies but for a range of other assets from equities to gold.

 

Traders also noted that the Group of 20 finance ministers and central bankers meeting at the weekend did not dwell on exchange rates, suggesting policymakers were not too concerned with the dollar's weakness, which remains relatively orderly.

 

"With that, the dollar is going to remain in a structural downturn," said Paul Mackel, senior currency strategist at HSBC in London.

 

"It looks like the market waited for the event risk to pass then sell the dollar, even though that seems to be the consensus view," he added.

The dollar's broad value against six major currencies as measured by the dollar index fell 1 percent and the euro rose back above the psychologically key $1.50 level as "risk appetite" spread through financial markets.

 

"It really is a true expression of how poor dollar sentiment is right now," Mackel added, noting sterling's rise to a three-month high above $1.68 and even the low-yielding yen's relatively robust performance against the greenback.

 

"But it's orderly, and that's the key thing. The dollar's going to remain a sell on rallies."

 

At 1239 GMT the dollar index was down 1 percent .DXY at 75.052, closing in on last month's trough of 74.94, a low not seen since August 2008.

 

The euro EUR= was up 1 percent at $1.5003, having hit a high for the day around $1.5011 to take it back within sight of last month's 2009 high of $1.5064. Continued...

 

 

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Gold price smashes through $1,100 barrier

 

The gold price has hit yet another new high on the back of a floundering greenback and rising concerns over major central bank policies.

 

Following the weekend's G20 meeting to discuss economic stimulus measures, the spot gold price sharply broke through the psychologically important $1,100 per ounce level to hit a high of $1,111 per ounce by 1pm on Monday.

 

The G20 meeting at the weekend reinforced views that US interest rates are unlikely to rise any time soon.

 

The US dollar, which gold is a primary hedge against, hit the skids after figures were published on Friday showing that the US is enduring the highest unemployment numbers since 1983.

 

The dollar index, which tracks the currency's worth against other currencies, slipped 0.9% to a two-week low of 75 today. Recent gains in the gold price have tended to come as the dollar weakens.

 

In 2009, the dollar has already lost more than 7% against its main rivals. The price of gold is now up by some 45% over the past 12 months.

 

Nicholas Brooks, at ETF Securities, said: 'The most recent surge in the gold price appears to be directly linked to statements over the weekend by the G20 that they will keep the fiscal and monetary pumps operating at full speed despite the already unprecedented rise in global high powered money and deterioration of government finances.'

 

Discussions about possibly implementing a Tobin Tax on currency trading to try to reduce financial volatility also appear to have increased investor uncertainty.

 

The most recent move in the gold price builds on the sharp rise last week that was stimulated by the announcement that India will buy 200 metric tons ($7bn) of International Monetary Fund (IMF) gold.

 

Many market participants view said that move as just the tip of the iceberg, with China, Russia and other central banks also indicating their intention to hoard gold as part of their strategy to diversify away from the US dollar.

 

Brooks said: 'This morning's move in the gold price is a clear negative vote on the current trajectory of government monetary and fiscal policies.'

 

 

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I spent a little time looking solely at USDX chart.

 

2h7hsie.gif

 

Really, really hard to call it either way, but after much deliberation I think she is going down. My main reason for this is the MACD signal which has converged today. Also the 0% fib ret is acting as strong support, but we are in a descending triangle with the median line. I think when it finally moves, it will move fast and hard (so if I am wrong I will know quickly!)

 

I am waiting for the next candle to confirm before going in though, so hopefully the next couple of days will help.

 

 

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Dollar Falls to 15-Month Low as G-20 Pledge Spurs Risk Demand

 

Nov. 9 (Bloomberg) -- The dollar weakened to a 15-month low against the currencies of major U.S. trading partners after the Group of 20 nations agreed to maintain economic stimulus measures, encouraging investors to buy higher-yielding assets.

 

The U.S. and Japanese currencies fell against most of their major counterparts tracked by Bloomberg as U.S. equities advanced on the G-20 stance. The euro strengthened versus the greenback after last week’s 0.9 percent gain as Germany’s exports climbed in September more than economists forecast.

 

“The market is interpreting the very accommodating, very easy policy still in place as a positive sign,” said Stephen Koukoulas, head of global foreign exchange and fixed income in London at Toronto-Dominion Bank, in an interview on Bloomberg Television. “We are going to enjoy this period of easy policy a bit longer. The dollar is falling for good reason. It’s going to weaken even further.”

 

The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners including the euro, yen and pound, dropped 1.1 percent to 74.995 at 10:56 a.m. in New York, from 75.819 on Nov. 6. The gauge touched 74.930, the lowest level since August 2008. The index has lost 7.7 percent in 2009.

 

South Africa’s rand gained 1.8 percent to 7.4030 per dollar and Norway’s krone advanced 1.5 percent to 16.03 yen on speculation investors will increase carry trades, in which they sell the currency of a nation with low borrowing costs and buy assets where returns are higher.

 

 

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YAWWNNNNN!!!!!

 

A month or two of doomsters calling it a day on USD and it hasn't got anywhere near last year's lows. Still.

 

When it gets near 72.5 or so then and only then should people start to take interest. Boring.

 

So let's compare the state of US finances of today to over a year ago. They are far worse yet USD has not breached the lows?

 

Answer that one? What wacky conspiracies can be created?

 

Or just forget about the dollar until it goes below 72.5. Or may it won't and we are channelling before a rally?

 

Lastly, if you are paid in £ and hold your assets in sterling then what is the obsession with USD? (Other than the fact that gold is valued mostly in it). It's a benchmark but that's about it. Unless of course many of you are thinking of emigrating to the US?

 

 

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YAWWNNNNN!!!!!

 

A month or two of doomsters calling it a day on USD and it hasn't got anywhere near last year's lows. Still.

 

When it gets near 72.5 or so then and only then should people start to take interest. Boring.

 

So let's compare the state of US finances of today to over a year ago. They are far worse yet USD has not breached the lows?

 

Answer that one? What wacky conspiracies can be created?

 

Or just forget about the dollar until it goes below 72.5. Or may it won't and we are channelling before a rally?

 

Lastly, if you are paid in £ and hold your assets in sterling then what is the obsession with USD? (Other than the fact that gold is valued mostly in it). It's a benchmark but that's about it. Unless of course many of you are thinking of emigrating to the US?

So says a frustrated dollar holder while waiting for a bounce.

 

Gold clearly has an inverse relation to the dollar, so why the talk about being paid in pounds if those pounds are being converted into gold asap. The reason so many people are interested in what the dollar is doing is that they believe we are in a fiat currency crisis and are using gold to protect their wealth.

 

Don't worry 72.5 soon come.

 

 

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Stewart Thomson - Gold's Blood Relatives

 

4. Will the mighty US dollar stage a rally? Or will it melt down, possibly triggering a global paper currency crisis? Look at the indicators like MACD rolling over. This looks like the chart of an item that is preparing to crash, not rally.

 

usd_daily.gif

 

8. The possibility of a strong US dollar rally is very high, yes, but the odds of a dollar collapse followed by a global paper currency crisis, are even higher.

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"For now traders are going with the flow - The trend is your friend"

 

Dollar down again as G20 backs ongoing stimulus

By PAN PYLAS (AP) – 2 hours ago

 

What is the Trend?

 

USD is above the lows of last year

 

USD just made a double bottom below $75.

 

Seems like "the trend is your friend" until the bend at the end.

Be alert to that.

 

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What is the Trend?

 

USD is above the lows of last year

 

USD just made a double bottom below $75.

 

Seems like "the trend is your friend" until the bend at the end.

Be alert to that.

The trend is clearly in a downward direction. Your double bottom has just been broken 74.85 this morning.

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What is the Trend?

 

USD is above the lows of last year

 

USD just made a double bottom below $75.

 

Seems like "the trend is your friend" until the bend at the end.

Be alert to that.

 

The trend on the daily chart is definitely down.

8th July 2009 Close = 81.350

10th Nov 2009 Close = 75.140

 

You can't spin facts like that away Bubb. It's only a double bottom if she goes up. You must have thought that it would be up, up and away on the 9th Oct 2009 (close 76.575) as well - but that would have cost you.

 

Also look at the moving averages, the 10 day sma is about to cross the 20 day sma. Then all sma's will be in the proper order.

 

Price as I wirte this is 74.925.

 

The trend is my friend, and I treat her well and never look for her bottom!

 

As I said on an earlier post, if I am wrong then I want to know I am wrong quickly.

 

 

 

 

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So says a frustrated dollar holder while waiting for a bounce.

 

Gold clearly has an inverse relation to the dollar, so why the talk about being paid in pounds if those pounds are being converted into gold asap. The reason so many people are interested in what the dollar is doing is that they believe we are in a fiat currency crisis and are using gold to protect their wealth.

 

Don't worry 72.5 soon come.

 

 

Answer the question please.

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YAWWNNNNN!!!!!

 

A month or two of doomsters calling it a day on USD and it hasn't got anywhere near last year's lows. Still.

 

When it gets near 72.5 or so then and only then should people start to take interest. Boring.

 

So let's compare the state of US finances of today to over a year ago. They are far worse yet USD has not breached the lows?

 

Answer that one? What wacky conspiracies can be created?

 

Or just forget about the dollar until it goes below 72.5. Or may it won't and we are channelling before a rally?

 

Lastly, if you are paid in £ and hold your assets in sterling then what is the obsession with USD? (Other than the fact that gold is valued mostly in it). It's a benchmark but that's about it. Unless of course many of you are thinking of emigrating to the US?

 

OK - I'll try and aswer that.

 

Long Answer

The GBP and USD belong to a family of money that we call fiat money. That is they are money because the Government say it is. Now, nothing inherently wrong with that if you like other people to become leaders, and you like a safety net in case you are unable to work, etc. The downside to this is that we tend to get inflation as part of the deal but that is prefferable to deflation.

 

Now we have seen the FED and BoE start QE measures and are able to pluck out of thin air considerable sums of money. We have also seen that common workers in Woolworths have lost out, but workers in banks have by and large gained or at least not lost their jobs.

 

Although the FED and BoE have pages and pages of reports that state how they are being prudent, and why they need to do these extraordinary measures, some people like me still doubt them. Why give to HBOS and not to Woolworths? If you say banks are more important and essential to the economy then that means by extension that some people are more equal than others. If you have ever read Animal Farm by George Orwell then you will understand the deeper meaning.

 

Now, as I don't work for a bank or the public sector, I need to protect myself from all counterparty risk. Swapping some of my GBP fiat money for gold/silver is one method I use. Other people may be swapping their GBP for houses (which are called REAL Estate for a good reason).

 

Short Answer

All commodities such as oil, gold, silver, copper, etc are priced in USD. This is because it is the Reserve Currency of the World.

 

 

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Answer the question please.

This is what you should be looking at to gain the answer to your question. I do not need to understand more as I am not invested in the dollar, actually am inverse via Gold.

 

Unlimited US Dollar swap lines between central banks

October 13th, 2008 · No Comments

 

This morning, the Federal Reserve announced a further ‘unlimited’ extension of US Dollar funding through other central banks, namely the BoE, ECB and SNB. Counterparties in these operations will be able to borrow any amount they wish against the appropriate collateral in each jurisdiction. Accordingly, sizes of the reciprocal currency arrangements (swap lines) between the Federal Reserve and the BoE, the ECB, and the SNB will be increased to accommodate whatever quantity of U.S. dollar funding is demanded. The BoE, ECB, and SNB will conduct tenders of U.S. dollar funding at 7-day, 28-day, and 84- day maturities at fixed interest rates for full allotment. Funds will be provided at a fixed interest rate, set in advance of each operation. This decision is a further step towards alleviating Dollar funding pressures outside the US, which may have played a key role in creating substantial US Dollar upside pressure in FX markets. According to the BIS, Dollar denominated banking liabilities by non-US banks amount to some $12tn.

 

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OK - I'll try and aswer that.

 

Long Answer

The GBP and USD belong to a family of money that we call fiat money.

are there other families?

n.b. literal translation of "fiat money":

trust and faith that it can be used as a means of exchange of goods.

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are there other families?

n.b. literal translation of "fiat money":

trust and faith that it can be used as a means of exchange of goods.

http://en.wikipedia.org/wiki/Alternative_currency

Alternative currency is a term that refers to any currency used as an alternative to the dominant national or multinational currency systems (usually referred to as national or fiat money). Alternative currencies can be created by an individual, corporation, or organization, they can be created by national, state, or local governments, or they can arise naturally as people begin to use a certain commodity as a currency. Mutual credit is a form of alternative currency, and thus any form of lending that does not go through the banking system can be considered a form of alternative currency.

 

When used in combination with or when designed to work in combination with national or multinational fiat currencies they can be referred to as complementary currency. Most complementary currencies are also local currencies and are limited to a certain region.

 

Barters are another type of alternative currency. These are actually exchange systems, which only trade items; thus without the use of any currency whatsoever. Finally, LETS is a special form of barter which trades points for items. One point stands for one man-hour of work.

 

Often there are issues related to paying tax. Some alternative currencies are considered tax-exempt, but most of them are fully taxed as if they were national currency, with the caveat that the tax must be paid in the national currency. The legality and tax-status of alternative currencies varies widely from country to country; some systems in use in some countries would be illegal in others.

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