This page has been archived and commenting is disabled.

Dollar Shortage Hits Highest Number Of European Banks In Six Months

Tyler Durden's picture




 

This morning's update on the ECB's FX swap usage confirmed what those who care about this kind of stuff already know: the USD shortage in Europe, all Libor and other manipulated and fraudulent signs to the contrary, is getting worse: in the week starting August 23, the number of banks demanding a 7 day USD swap with the NY Fed, and intermediated by the ECB, rose to 12, or the highest since February, while the amount requested was $8.5 billion - the second highest in 2012 so far. In other words, while everyone knows the EUR interbank market in Europe is slammed shut, most likely in perpetuity, courtesy of the trillions in EURs raining from the ECB, it is now once again time for the USD market to implode, something it last did in the beginning of 2012 when the advent of the short-term benefit from LTRO 1 and 2 fixed the funding situation, albeit briefly.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 08/22/2012 - 08:57 | 2726797 LawsofPhysics
LawsofPhysics's picture

That old man on property adjacent to my hunting cabin that was hoarding physical $100 bills doesn't look so crazy now.  I will admit that I saw value in holding physical silver and gold, but I did chuckle when I saw one of his pallets.

Wed, 08/22/2012 - 08:56 | 2726801 malikai
malikai's picture

It's a good thing that since LTRO1/2 Europe is fixed and we will never need to worry about that problem again.

Wed, 08/22/2012 - 08:57 | 2726805 bnbdnb
bnbdnb's picture

Just turn on the faucet, plug the hole....and walk away.

Wed, 08/22/2012 - 09:02 | 2726810 LawsofPhysics
LawsofPhysics's picture

The Euro is still strong relative to the dollar, print some more, revalue gold on the Euro ledger, fixed.

Pretty Please?  Apparently the europeans forgot this is a race to the bottom, better send timmay back to Germany.

Wed, 08/22/2012 - 09:08 | 2726838 lasvegaspersona
lasvegaspersona's picture

Laws

do you read fofoa?

these thoughts are not what one commonly hears around here...

if not where did you get your insight?

Wed, 08/22/2012 - 09:23 | 2726863 LawsofPhysics
LawsofPhysics's picture

My insight comes from time I spent in Russia in the early 90's and business I have done with companies and people in France.  Without going into a long explanation, see my comments below regarding people who have lived through currency collapse/devalution and war.  Something most American "leaders" have never experienced.  The fact that the Romney camp is starting to leak the possibility of keeping Bernanke should tell you that the next "election" is bought and paid for already.  TPTB will try to maintain the status quo at all costs.  Interesting times indeed.

But yes, I read fofoa from time to time.  Look around you, your "wealth" will be found in the trustworthyness, intelligence, and creativity of those you surround yourself with.  For me, that is the productive labor of intelligent employees who solve real problems every day.

Wed, 08/22/2012 - 12:58 | 2727819 Sisyphus
Sisyphus's picture

You hiring?

Wed, 08/22/2012 - 09:01 | 2726812 PST
PST's picture

Tyler

What is the source of the weekly allocated amounts in your chart.  I searched the St Louis Fed website but am coming up empty.  any help?

Wed, 08/22/2012 - 09:10 | 2726842 Schmuck Raker
Schmuck Raker's picture

Read those first three words again, "This morning's update..."

http://www.ecb.int/mopo/implement/omo/html/20120128_all.en.html

IIRC ECB publishes this stuff in a more timely fashion than the Fed.

Wed, 08/22/2012 - 09:12 | 2726855 PST
PST's picture

Well don't I feel like a schmuck.  Thanks SR

Wed, 08/22/2012 - 09:02 | 2726814 disabledvet
disabledvet's picture

Of course we all already know/knew this because Sudden Debt from Belgium told us he was looking to convert his euro's to dollars...OVER A YEAR AGO. (and I told him to buy gold in euro's too..both good calls I might add.) the gold window will soon close. SD has an historical view that simply put runs circles around the Tylers' Durden...and so do the other bulk of the other Commentarians from Europe I might add.

Wed, 08/22/2012 - 09:09 | 2726823 LawsofPhysics
LawsofPhysics's picture

Correct.  Living through currency collapse and world war will do that to you.  First your currency dies, then your friends and relatives do, funny how experiences like that make an impression for generations to come.

Wed, 08/22/2012 - 09:02 | 2726815 Jlmadyson
Jlmadyson's picture

Ah the dollar shortages. I remember those days back in 08.

Fun, fun stuff dead ahead.

Wed, 08/22/2012 - 09:02 | 2726819 vertexa
vertexa's picture

Is there a term limit for the Fed chairman?

Consider keeping Bernanke, top Romney adviser says

(Reuters) – Ben Bernanke received an unlikely defense of his work at the U.S. Federal Reserve by a top Mitt Romney adviser, who said on Tuesday that he should be considered for a third term as chairman.

Wed, 08/22/2012 - 09:09 | 2726843 Dr. No
Dr. No's picture

No surprise. TPTB have their hooks in Romney too.  Obmney.

Wed, 08/22/2012 - 09:04 | 2726821 EvlTheCat
EvlTheCat's picture

Dollar shortage in Eurotopia?  No problem, use gold. It's money now you know?

Wed, 08/22/2012 - 09:08 | 2726837 madcows
madcows's picture

So, people are demanding physical US Dollars...  They don't want Euros or digital dollars.  They're desperately trying to get hold of other hard currencies.  But, what, Swiss Francs cost too much?  Why get into dollars.  The US is trying like hell to print and devalue.  Is the USD that much more stable? or is it a question of usability.  USD are easier to swap than gold.  USD are more readily available than gold.

Sounds to me like the Euro is now a defunct fiat.  It's usefulness is only in swapping it for other currencies.

Wed, 08/22/2012 - 09:10 | 2726848 Dr. No
Dr. No's picture

They are trying to get Dollars so they can buy more treasuries.

Wed, 08/22/2012 - 09:24 | 2726849 LawsofPhysics
LawsofPhysics's picture

As I see it, this is much akin to the "buy silver and crash JP Morgan" effort.  Still realtively easy to get physical dollars and defend your own paper, especially if you turn those dollars into something real when they are strong.  But you are correct, paper is paper is paper, all going to zero.

Wed, 08/22/2012 - 09:19 | 2726871 Quinvarius
Quinvarius's picture

Based on what they owe, there will never be enough dollars for the banks.  That is why the printing never stops.  I don't think I would call it a shortage, but I guess that is how it feels when you are a bank.

Wed, 08/22/2012 - 09:30 | 2726904 youngman
youngman's picture

Why dollars..because when the Euro crashes it will devalue..and the dollars you are holding will hold more of its value.....but I do think the Dollar will fall too...Canadian..Aussie...whatever will do better....but they are hard to come buy...

Wed, 08/22/2012 - 09:38 | 2726933 madcows
madcows's picture

AUD is plummeting.  Feel free to jump in.  Aus. is major mineral economy, and noone needs minerals when in a depression.  Everyone jumped into AUD early when the printing began.  Now, it's got nowhere to go but down.  All currencies are going down in value.  Every central bank is printing.  It's a race to the bottom.

Wed, 08/22/2012 - 09:38 | 2726936 LawsofPhysics
LawsofPhysics's picture

All economies are local, period. Location location location. How's that work out when your government devalues and then forces everyone to only do business in their own currency? Just another way to implement "price controls"or price "fixing" that will fail. 

Wed, 08/22/2012 - 09:59 | 2727020 madcows
madcows's picture

Noone has closed the FX windows.  you can go get Loonies, Francs, Euros... what ever you want.  you are not forced by the government to do business in Dollars.  You just need to get your local businessman to accept some other currency.  That's why they are trying to accumulate dollars.  They don't want to do business w/ Euros.  Dollars are the Worlds "Reserve" currency.  They are pretty much universally accepted anywhere... for now.

I sense the Euro collapse is accelerating.

Wed, 08/22/2012 - 10:44 | 2727265 LawsofPhysics
LawsofPhysics's picture

Okay, the Euro dies, then what?

Have you ever lived in a country during a real currency crisis?  I have.  Numerous examples of goverments making it illeagal to deal with anything other than their own currency.  Right now the American military backs the dollar.   You may be right and but make no mistake, this will continue only so long as debt slaves are willing to sacrafice themselves and their children in order to maintain that status quo.

ALL economies are local, period.  If you want to what your future holds, begin by looking at those around you.

Wed, 08/22/2012 - 09:40 | 2726944 Arnold Ziffel
Arnold Ziffel's picture

This is exactly why we don't see M3 rising along side the rise of M2 in my opinion. Also, inflation is muted b/c M3 (velocity) is level since the EU bansk are sucking up all the dollars. It's exactly what the M2 and M3 numbers have been showing and explains the failure of PMs and oil to soar.

Wait until they fill their coffers ...my guess is velocity will pick up with visible results this Fall with gold htting a new high and silver pehraps rising back to $49 or higher. WTI maybe as high as $114 again.

Wed, 08/22/2012 - 09:49 | 2726977 treasurefish
treasurefish's picture

Dollars are IOUs that can never be honored.  Why is there any demand for debt notes at all?  Keep it - I don't want any.  Throw me a Bitcoin instead.

Wed, 08/22/2012 - 10:18 | 2727120 cabtrom
cabtrom's picture

What's the difference if more gold is brought to market increasing gold supply or if more pieces of paper is brought to market increasing the amount of paper suply? If you don't like to use pieces of fucking paper than don't. Go use gold to buy your shit. At the end of the day however if I dont have a job nor can i get one because no one is hiring than who realy gives a crap what The government gives me to buy food be it paper or gold IM FUCKING HUNGRY & I NEED AN iSNACK!

Wed, 08/22/2012 - 10:19 | 2727124 Remington IV
Remington IV's picture

Sell GOLD

Wed, 08/22/2012 - 12:56 | 2727812 Grand Supercycle
Grand Supercycle's picture

Risk off sentiment ~ SPX 8 hour bearish chart warning continues and FTSE daily chart gives bearish warning.

Of course central bank intervention could burn more shorts and reverse this scenario...

http://www.zerohedge.com/news/2012-12-24/market-analysis

Wed, 08/22/2012 - 13:37 | 2727978 savagegoose
savagegoose's picture

AUD cant go down. the gov doesnt  buy to drive it down and china, japan  and swiss are buying in the $BB to trade out their USD/ euro holdings. also interst rates are still high here.

plus in a pervere way a high AUD means locals. get paid less local money for exports.  thus doubly   stripping them of purchase power when aud does finally go down.

only way we can  hold an advantage of our high purchase power now, is trade out of AUD  now while its strong.  but we have million dollar mortages to pay off so  no spare cash.

Do NOT follow this link or you will be banned from the site!