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Central Bank Flight To Federal Reserve Safety Tops Lehman Crisis

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http://www.telegraph.co.uk/finance/financialcrisis/8736204/Central-bank-flight-to-Federal-Reserve-safety-tops-Lehman-crisis.html

Central banks and official bodies have parked record sums of dollars at the US Federal Reserve for safe-keeping, indicating a clear loss of trust in commercial banks.

Data from the St Louis Fed shows that reserve funds from "official foreign accounts" have doubled since the start of the year, with a dramatic surge since the end of July when the eurozone debt crisis spread to Italy and Spain.

"This shows a pervasive loss of confidence in the European banking system," said Simon Ward from Henderson Global Investors. "Central banks are worried about the security of their deposits so they are placing the money with the Fed."

These dollar accounts are just over $100bn (£62bn) and are small beer compared to the vast sums invested in bonds as foreign reserve holdings. Yet they serve as stress indicator, reflecting the operating decisions of the world's top insiders.

.....

Lars Tranberg from Danske Bank said European banks are reduced to borrowing dollar funds for "a week at a time" rather than the usual six to 12 months. "This closely resembles what happened in late 2008, though the difference this time is that the major central banks have dollar swap lines in place. If the dollar funding markets completely freeze up, the European Central Bank can act as a backstop."

Are we weeks away from another crisis?

No need to worry nothing that a bit of printing can't fix.

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Got the rating agencies to put the squeeze on Europe sov ratings in order to revent a pervasive loss of confidence inthe dollar. With all this money sloshing into the FED some other people must be selling out of the dollar on a grand scale.

Wonder where the dollar would be otherwise?

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Not exactly a flight to quality though is it?

Schiff keeps pointing out that it is impossible to protect yourself by holding the very thing you are trying to protect yourself from.

Totally nuts :rolleyes:

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  • 276 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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