And The Award For The Most Creative Excuse For Joining Currency Wars Goes To...

Tyler Durden's picture

Submitted by Alexander Gloy of Lighthouse Investment Management,

... the Bank of Israel!

On Monday, Bank of Israel cut interest rates in a surprise decision to 1.5% from 1.75%.
Also, they are done with watching the Shekel strengthen against the dollar:

“Beginning this year, and in coming years, the Bank of Israel will purchase foreign exchange in order to offset the effect of natural gas production on the exchange rate.”

Hilarious! The BoI tries to ‘justify’ entering the global currency wars with natural gas production. A top contender in Central Banking Oscar’s for “Most creative excuse for FX manipulation”!
The Q&A brought up a critical question (not the kind of soft balls lobbed at ECB and the Fed by corrupt and incompetent journo’s):
Q: “According to your policy, you only purchase foreign exchange when the exchange rate deviates from fundamental economic conditions or when there are disorderly markets. The production of natural gas is a real economic factor which is fundamental and long-term. Why offset its effect through foreign exchange purchases?” 
A: “Natural resources are a blessing for Israel’s economy. However, international experience shows that sometimes the discovery of natural resources can have negative effects on the economy, often referred to as ‘Dutch diseases’. The goal of the policy announced is to offset these detrimental effects.”

The rate cut and announcement of FX interventions apparently could not wait for another 2 weeks, until the next scheduled meeting, fueling speculation something more sinister was going on. From the Q&A:

Q: “The last time the Bank of Israel made an inter-meeting rate decision was after the collapse of Lehman Brothers, at the height of the global crisis. In two weeks you were scheduled to decide on interest rates in any case. What do you know that did not allow you to wait?”


A: “Recently, crucial information became available which was the basis of the decision. Central banks reduced interest rates and continue large scale quantitative easing. These intensified the appreciation pressures on the shekel.”

Infamously, the BoI last year bought a position in Apple stock (around $550) and suffered deep book losses. Apparently they haven’t learned anything and will continue to play in “longer-term assets with higher expected returns”:

”The foreign exchange reserves are invested in liquid assets so that they can be utilized in times of crisis. The foreign exchange flows which will accumulate as a result of this policy will be invested in longer term assets, with higher expected returns.”

What kind of assets are those? With fixed income, your return is known at time of purchase. Talking about “expected returns” means anything but fixed income, or things like equities, commodities, private equity or hedge funds. Good luck!

You got to love the fact central bankers are beginning to believe in the bubble they helped to create!

What’s next – the Swedish Riksbank entering currency wars due to the discovery of a large number of blonde au-pairs?



Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
McMolotov's picture

Slang for Manischewitz wine?

iDealMeat's picture

"Jesus" Tylers..  Just begging francis to test the racists policy...

Ahmeexnal's picture

Why people blame O.J. Simpson for everything is something I will never understand.

BigJim's picture

 Submitted by Alexander Gloy of Lighthouse Investment Management

Gloy! Sounds like... Goy! 

francis_sawyer's picture

Once again... [& this is a 'common' error]... You've mistakenly interpreted former francis_sawyer comments to be 'racist'...


Nothing of the sort... If you do your due diligence [which FEW are apt to dedicate time & effort to]... You'll notice that, repeatedly, I've said:

"RELIGION. HAS. NOTHING. TO. DO WITH. IT."... [even as a 'defense', on behalf of the 'religious' folks, as others were foaming at the mouth]...

But y'all are free to hem & haw as you may [in the postscript]...

BigJim's picture

Francis, if you get banned... will you be returning with another alias?

Much as I abhor racism, I do wonder if this new ZH 'racism' ban is the beginning of the end of our beloved ZH.

TwoShortPlanks's picture

The best posters have opinions. ZH will turn into a circle jerk with petty rules.

Let the bloggers do the culling.

francis_sawyer's picture

I'm not worried about any 'bans'... because, since this past weekend, I've 100% committed to the NEW RULES... [which ANYONE, with due diligence, can verify]...


So at this point... If I ever get 'BANNED'... It'll be because of some 'yet to be determined' discernation [by the office of the INTERPRATIVE PRE-CRIME unit which chooses to fabricate ANY meaning out of anything I say]... Which, by happenstance, would either render this forum a total farce [which I wouldn't go as far as to say, because I truly believe the Tylers can publish relative news through 'thick or thin', but, instead, would render half the commentary a farce], OR, more precisely... Would serve to PROVE that the 'dead horse' that I have been beating for a long time now, was a worthy cause...

prains's picture

the horse has definitely had a spanking

EscapeKey's picture

Hey, lowest common demoninator. How are you?

TwoShortPlanks's picture

Hahaha...looking at the number of thumbs down on some of your posts, you're about as popular as a 3am stomach pump at Calcutta Hospital. Better lift my game.

noless's picture

God fucking damn it Francis, if religion has nothing to do with it, then by logical extension are you implying that a specific group of people who can be identified racially are behind something? And if so, do you mean the entire diaspora? I'm fairly certain that the Jews i grew up with did not engineer the current system.

I will not debate Israels place in the matter, nor the proximity and density of "Jews" to the system, but if you are to equate a racial identification to the matter without realizing or rationalizing as to specifically who, without broad strokes which paint innocent men as victims then i cannot support your statements.

Do you understand me?

noless's picture

Just to comment lock it, there are many faiths which believe others below their own. I honestly can't believe i was down voted for not favoring a mob scene, reminds me of occupy, i wonder if that poor fucker lived, mobs ain't fun people, especially when you are a voice of reason.

I'm still not in favor of the policy.

Mojeaux18's picture

I up voted you, but you know...I'm one of them that engineer this from my computer and twitter acct and my 5 digit bank acct. /sarc

Fuku Ben's picture

Uh, I'm certain that's a typo and you meant Juice

He's back in court today

NotApplicable's picture

Testing the raycisss ban hammer, are we?

Raynja's picture

i can see why the tyler(s) implemented the no rayciss policy, i mean that was obviously what was holding the site back from going mainstream.  

ceilidh_trail's picture

"I can see why ABC Media implemented the no rayciss policy..."- fixed it for ya!

TheFourthStooge-ing's picture

ABC is a pretty generic moniker. Take a look in your local phone book.

I'm pretty sure that ABC Media, LTD., is not related to the American Broadcasting Company  (a division of Mousketeer Eternal Copyright Perpetuation Inc.), the Australian Broadcasting Corporation, or Asahi Broadcasting Corporation.

prains's picture

is this the fonz on waterski moment? cue the shark.......

EscapeKey's picture

I don't really believe in this "jew conspiracy", partly because it's just another trivial scapegoat. I mean, ffs, when was the last time anyone was willing to take responsibility for anything? Oh I know, it's easier just to blame some other group of people.

Although I suppose it can be considered slightly ironic, because living in Western Europe, I do think immigration is completely out of control.

edit: OMG I'm being downvoted I better blame teh jews. Pathetic. Fuck it, I'll downvote myself.

tango's picture

The whole Jew conspiracy is so..juvenile yet predictable. It's part of the human condition - blaming others for events beyond our control. The difference between them and those of the Middle Ages is the subject - financial, national & economic disaster vs disease, famine & earthquakes.

Despite tremendous scientific progress, when troubles arise we rush to blame ancient enemies - race, religion, ethnicity. After all, it's only human.

Element's picture

Yeah, I agree, it has absolutely nothing to do with them infesting every part of Govt, Banking and Treasuries pretty much everywhere in the whole western world. It's obviously crazy to think that might be a factor. It's a despicable fantasy that targets completely innocent people. There is no mass corruption and theft going on in any of those contexts, and nor is foreign policy affected in the lest. It's all scurrilous insanity.

kito's picture

careful divided states...your overeaching and broad attack on a group of people doesnt reflect much insight........i may revoke that bar mitzvah invitation......

fonzannoon's picture

Kito I am impressed with how well you put up with this. When I was a kid I used to pray to Don Mattingly. If everyone constantly attacked Don Mattingly I would have lost it a long time ago. Lucky for me they don't because he is perfect. But still....

kito's picture

although im not remotely observant as a jew............its getting irksome.....and its gotten much worse since i joined....ive been here over 2 years and there is a steady drip of joo bashers into zh............and i would wager that there is a sizeable number of jewish contributers to this site......and yet they sit idly like a bunch of pussies and ignore the hate and sad that those out there have no backbone to speak up.......................the ones that say nothing are actually worse than the ones who offend.........................

fonzannoon's picture

Good to hear you say that man. 

Francis I can't afford to stay in a hotel in the city anymore but my guess is a good one, on the weekend, is maybe $350 plus a night?

otto skorzeny's picture

blah blah blah-we're God's Chosen People and the rest of you aren't- blah blah blah- remember the Holocaust- blah blah blah-you're an anti-semite- blah blah blah- hey Congress- do what we at AIPAC say because we  fucking own your asses - blah blah blah-ad nauseum.

francis_sawyer's picture

@fonz... Whilst I understand numbers... "$" is an unfamiliar symbol with me... Could you please elaborate?...

kito's picture

oh otto, just in time!!!! otto, was Jesus jewish??? does christianity incorporate the old testament into their worship??? are you christian?? how do you reconcile that? how do you wear a cross around your neck with a jew nailed to it? all these years and i still dont understand that mindset........please explain...rationally and without expletives......................

john39's picture

Jesus was a Judean. 

nmewn's picture

You saying he was a Syrian or what?


Apparently the Romans were just as confused as you, so they wrote it out in three different languages and hung a sign over His head.

KickIce's picture

Does it really matter?  A more pertinent question would be is he the son of God or isn't he?  Savior or false prophet?  Choose your side and act accordingly.

nmewn's picture

"Does it really matter?"

John, etal, seem to want to push the point and then run away.

For me He is the Son and I intend to act accordingly...but I can tell you right now, I ain't no saint ;-)

Divine Wind's picture



Slow clap......

Outstanding comment.

StychoKiller's picture

Then get thee hence, and alleviate some suffering:

TwoShortPlanks's picture


Nor am I...and just wait to you see what type of monster I turn into once the lights go out.

Lawyers, Exec Bankers, Politicians, Criminals.

FreeMktFisherMN's picture

Jesus Christ is Lord. No one comes to the Father but through the Son. 

NihilistZero's picture

I once saw a girl wearing a shirt that said "Jesus Was a Cunt".  Anyone have an opinion on her theory :-/

palmereldritch's picture

The bumper sticker I saw on the back of a RH-drive 93 Nissan Skyline that said Jesus was a drifter was wittier...

Colonel Klink's picture

I think I just threw up in my mouth a little.

Harbanger's picture

"how do you reconcile that? how do you wear a cross around your neck with a jew nailed to it? all these years and i still dont understand that mindset........"

There's a name for it, I can't remember, but it's a misinterpretation that goes back to the middle ages.  It goes along the lines that those jews who didn't recognize him as the messiah are the ones that had him crucified, the others became christian.

TheEdelman's picture

As the Krug sezs, "Its the cranky old men".  They are racist against everything/anything including rocks and unborn small insects.  Whereever there is racism there are small minds...right?  They (racist old men) are one of the downsides to ZH.  But its the pips premium paid for freedom of speech.  On the positive side, its easy to see where all the sub 100 IQ's are and skip over their posts.   

"It’s cranky old man stuff, the kind of thing you get from people who read Investors Business Daily, listen to Rush Limbaugh, and maybe, if they’re unusually teched up, get investment advice from Zero Hedge.  Sad.”  - The Krugman

Krug is techincally right.  But he erroneously (as usual) lumps everyone into one category and slanders.  Much like the media outlets.    

BigJim's picture

I think ZH should ban ageists next.