Peak Oil is You
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Page added on September 25, 2009
The Horrible Conundrum Facing The Fed
The problem The Fed and America faces is that this latest “blast of the liquidity firehose” is not limited to The United States in its impact.
Indeed, the problems that this sort of “monetary policy” generates have almost nothing to do with the US Economic picture – rather, they have everything to do with the international nature of markets and monetary flows and the impact that such a policy pronouncement has on them.
The problem The Fed and America faces is that this latest “blast of the liquidity firehose” is not limited to The United States in its impact.
Indeed, the problems that this sort of “monetary policy” generates have almost nothing to do with the US Economic picture – rather, they have everything to do with the international nature of markets and monetary flows and the impact that such a policy pronouncement has on them.
Specifically, The United States Dollar has become the primary funding currency for carry trades:
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