Quote:
Originally Posted by roly
how is it bailing out the UK, there's dollar swap lines with the ECB and many other countries is thee not? and surely that strengthens the dollar and is good for the US isn't it?
|
There is with the Bank of England. I don't think there is with the ECB. Not sure. Yes, we have this with a few other central banks as well. How is a bail out? They can just take cash as needed directly from the Federal Reserve. How is it NOT a bail out?
A strong dollar is great if your target market is the US, you get paid in Dollars and your expenses are either in Dollars or a currency that is losing value to the Dollar. It's terrible for exports though. Look at how the Yen doing a moonshot has destroyed Japan's economy. Their exports are dead.
The biggest problems with these swap lines is that if the UK, or whatever country that a swap line with us, crashes we immediately go down with them and there is a huge risk we never get paid back. It's very dangerous. And don't even get me started about how the Fed has absolutely no authority to make the US tax payer prop up foreign governments like this...