The day after Timothy Geithner sits down with Jim Cramer and assures him there will not be another Lehman size collapse, central banks announce a joint effort to aid the financial situation.
With reserves that have been sitting in central banks around the world due to a lack of lending, it seems they were preparing for this very moment.
Three month dollar liquidity programs were collectively put in place by
The European Central Bank through a coordinated effort which includes the Federal Reserve, Swiss, Japanese and British central banks. The program will open the availability of three-month dollar tenders to institutions in need of currency capital that have not been able to acquire funding from sources that are usually tapped.
As this recent manuever utilizes some of the many tools that the Fed. has reffered to recently, it did fly over the heads of many as to what exactly has just happened. It seems the dollars are finally being put to work, leaving the accounts they have been sitting in for some time… question is, are they just making room so they can fill them back up with, as Jim Rogers would say….cupcakes!(QE3)
Metals have corrected today creating a buying opportunity for many who have thought they missed the boat, or waiting on the sidelines for a pullback… here it is.
All in all, nothing has changed… you could say it has gotten worse as more and more fiat currencies are flooding the market. The US$ is being redistributed again with this new program, and has returned a small amount of confidence to some investors out there. This short lived confidence is causing exits out of metals and the dollar, heading towards some riskier investments.
Be careful out there, and take advantage of this opportunity to add, or enter metals with the recent pull back.