Unlimited Bucks
And they say inflation is under control…
The Federal Reserve led an unprecedented push by central banks to flood the financial system with dollars, backing up government efforts to restore confidence and helping to drive down money-market rates.
The ECB, the Bank of England and the Swiss central bank will auction unlimited dollar funds with maturities of seven days, 28 days and 84 days at a fixed interest rate, the Washington-based Fed said today. All of the previous dollar swap arrangements between the Fed and other central banks were capped.
“By providing unlimited dollar funds they are acting on the back of the G-7 plan to ensure the system is fully liquidized,” said Lena Komileva, an economist at Tullett Prebon Plc in London. “We’re going to see even more liquidity provided and more aggressive rate cuts are coming.”
The deflationists may be having their way for now as assets are sold off like yesterday’s garbage, but it’s hard to believe that we won’t see hefty inflation out the other end of this mess as governments and central banks go to the limit to reflate the global economies.
I don’t think there’s much doubt that they’ll “print money until the world runs out of trees.”
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