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US Treasury undertakes historic intervention in yen market

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Re: US Treasury undertakes historic intervention in yen market

#121

Post by [deleted] »

CraigJPerry wrote: post #109
Eddy_Viscosity2 wrote: post #98

Earlier quoted context omitted.

Currency interventions never work. They buy a bit of time maybe, but without any fixes to the underlying causes that made the intervention necessary, its a temporary solution.

>> Currency interventions never work Where did you learn that? It doesn't reflect the structural volumes present. Central banks make interventions all the time in line with little stabilisation programs. Those are almost always deemed success. Maybe you deduced it by yourself? If so, fx is weird despite traditionally being seen as the simplest area in finance. E.g. It's counter-intuitive but we tend to think trade ma…

[deleted]

Re: US Treasury undertakes historic intervention in yen market

#122

Post by uncivilized »

Supermancho wrote: post #28
sph wrote: post #9

Earlier quoted context omitted.

Manipulation of the market never comes for free. You just delay, and render unpredictable, the eventual reckoning, for short-term benefits. It will be interesting to see who’s gonna blame the free market when that day arrives.

> You just delay, and render unpredictable, the eventual reckoning, for short-term benefits. After a century, those short-term benefits add up to a long term benefit.

You plan on being here for over a century?

Re: US Treasury undertakes historic intervention in yen market

#123

Post by iamnothere »

SpicyLemonZest wrote: post #99
btown wrote: post #93

Earlier quoted context omitted.

> deserves what they get American voters exist in an environment of propaganda addiction, with every piece of their personal technology reinforcing and profiting from said addiction, that has never existed before. I have great empathy and understanding for those who are bombarded by voices that are actively manipulating them for engagement, and I believe this empathy is key to understanding if, and how, a landscape o…

Understanding, absolutely. None of us are immune from propaganda, and most of us have at one time or another been swayed by selective arguments and echo chambers to behave poorly. I don’t like that you have empathy for people who are right this second steering the government in a project of performative cruelty against me. I think you should withhold your empathy until they’ve been stopped and appropriately punished…

Surely punishing the people will make them vote for us!

Re: US Treasury undertakes historic intervention in yen market

#124

Post by twoodfin »

worldthruword wrote: post #90
Schiendelman wrote: post #52

Earlier quoted context omitted.

Hold on there. The reason you mostly see sky is falling posts is that those get more engagement , both positive and negative. "Everything is fine" doesn't cause a reaction in a reader. This is inherent to social media. It's bad for us, too, because it eventually tricks our brain into thinking the sky is always falling, no matter how we try to talk ourselves out of it.

I think Peter Schiff has been beating the drumbeats of collapse since 2008. But now on the other hand, we have a rising power China trying overthrow the current system which will accelerate the process. China wasn't in that position in 2008.

“The sky falling” on the global economy would be terrible for China.

Domestic demand is being prodded to grow, but the Chinese economy would be in tatters if exports fell off a cliff.

Re: US Treasury undertakes historic intervention in yen market

#125

Post by ProllyInfamous »

Aboutplants wrote: post #39
CamelCaseName wrote: post #35

Wait, no way! Someone posted a zoomed up photo of a US official (can't recall who) of a notepad a few days ago saying "To do: Buy Yen 5Y - 10Y" or something similar

Which is hilarious because 5-10 billion dollars worth of Yen is not going to do much in the grand scheme of things. It’s a speed bump not a stop sign.

"Show me the personal incentives, and I'll tell you the outcome."

–Someone way the hell wiser than myself

Re: US Treasury undertakes historic intervention in yen market

#126

Post by jordanb »

don_esteban wrote: post #114
jordanb wrote: post #91

Earlier quoted context omitted.

But this is what the US Treasury is doing on Japan's behalf without requiring Japan to give up any bonds. If Japan wants a stronger Yen against the dollar why not make them spend their reserves to support it?

Because Japan would sell its treasures to buy dollar with which to buy Yen, pushing the yield on US treasures even higher, speeding up the debt spiral. Similar as the credit-swap lines for the Gulf countries: They have enough treasures to sell to cover their cash flow problems (from the blocked Hormuz), but (see above).

No it would not.

* Japan needs dollars to buy yen.

* Japan sells US bonds to the US Fed in exchange for dollars

* Japan uses the dollars to buy up Yen adding Dollars to the market and reducing the number of Yen.

Versus:

* The US Treasury uses Dollars to buy Yen on the open market injecting the same number of dollars and removing the same number of Yen

* Now the US Treasury owns a bunch of Yen it didn't want.

* The US Treasury either has to leave them on the books or, like, maybe buy Japanese government debt so it can get rid of the Yen?

* In any case Japan gets its monetary outcome (price support for the yen) without having to give up reserves (US gov't debt it owns) to do so.

Re: US Treasury undertakes historic intervention in yen market

#127

Post by epolanski »

jfengel wrote: post #119
jordanb wrote: post #108

Earlier quoted context omitted.

You're asking where the Fed gets money?

They have the option of simply putting it on their books, but that is the very last option. They would rather borrow it. Sometimes they borrow it from themselves at artificially low rates, which is still better than simply not treating it as a debt at all. Their preferred option is to auction off bonds. Though just at the moment rates on those bonds are extremely high, because reasons.

You're confusing the federal reserve with the treasury.

Two completely different and orthogonal institutions.

Also, rates are not high, they are historically well below the 30 years average.

Re: US Treasury undertakes historic intervention in yen market

#128

Post by jordanb »

epolanski wrote: post #113
jordanb wrote: post #108

Earlier quoted context omitted.

You're asking where the Fed gets money?

I'm just making you realize that what you're describing is inflationary.

So is the US Treasury actions. The US Treasury is using dollars to buy yen on the open market to support the price of yen versus the dollar.

Re: US Treasury undertakes historic intervention in yen market

#129

Post by ProllyInfamous »

aorloff wrote: post #116
dzonga wrote: post #6

Japan is the sort of canary in the coal mine. so yeah if the yen pops - then the u.s will too given all the 'a.i' shenanigans & the market manipulation with oil. but I guess the US Treasurer is willing to manipulate the market till they can't.

at some point, the SPR runs dry

As will the SDR.

https://en.wikipedia.org/wiki/Special_drawing_rights>

Re: US Treasury undertakes historic intervention in yen market

#130

Post by SpicyLemonZest »

adabyron wrote: post #62
Schiendelman wrote: post #52

Earlier quoted context omitted.

Hold on there. The reason you mostly see sky is falling posts is that those get more engagement , both positive and negative. "Everything is fine" doesn't cause a reaction in a reader. This is inherent to social media. It's bad for us, too, because it eventually tricks our brain into thinking the sky is always falling, no matter how we try to talk ourselves out of it.

Curious what others think. In my small real offline world, it seems this has caused people to get worked up about the sky falling a few times and then quit paying any attention to the sky or boy crying wolf at all. Which means when events actually happen that will have a large negative impact on their life or their descendants, they just don't care. Which then results in another metaphor - boiling a frog.

I'm just not sure what it could mean for a typical person, who does not participate in and is not familiar with the EUR/JPY foreign exchange market, to care about a story like this. Is there some financial decision I should be making based on this intervention? If we all got together and protested, might we convince Bessent to buy the euros back, and would that restore the status quo ante if he did? The few people who have any levers to pull here have surely been made aware of the story by now, so if the answers to all of the above are "no", it seems correct for most people not to care.
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