Dollar Declines Most Since 1985 Plaza Accord on Fed Bond Buying

The dollar dropped the most against the currencies of six major U.S. trading partners since the Plaza Accord almost a quarter-century ago as the Federal Reserve’s plan to purchase Treasuries spurred speculation that it’s debasing the greenback.

“What it introduces is the problem of the currency to the extent that the Fed is buying what isn’t desired by foreign holders,” said Bill Gross

Foreigners hold about half of the marketable Treasury debts that are outstanding. China, the biggest foreign holder, with $740 billion, is “worried” about its holdings of Treasuries and wants assurances that the investment is safe, Premier Wen Jiabao said at a press briefing in Beijing two weeks ago. Read More

Not looking good is it?

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3 comments on “Dollar Declines Most Since 1985 Plaza Accord on Fed Bond Buying

  1. Looks like we conned the Chinese. Now we’ll be paying them off in play money. ‘Course, every American holder of a debt instrument is also dinged, and the feds will have more and more trouble convincing people to lend them money for future H&C, but inflation can be good for the housing market, if nothing else.

    Inflation is one of the best ways to wreck an economy. Another three are raising taxes, imposing new regulations, and blocking free trade. So far, the Oids look to accomplish three of the four, and a manufactured “Buy American” frenzy is probably in the cards before long.

  2. I guess the Ba-rat fans wanted to give up their freedom! Once he don’t need them any more under the bus they will go hungry!

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