It Was Central Bank Intervention!

By Chuck Butler

OK… When the dollar made huge strides at the end of July and beginning of August, my colleague, and long time friend, Chris Gaffney, Pfilled in for me with the Pfennig, and wrote that he believed the dollar’s reversal to be Central Bank Intervention… We received a few emails from people asking us to follow up on that thought, but we couldn’t… Until now!

The Bloomie is reporting this morning that “finance officials form the U.S., Japan and Europe, in mid-march drew up plans to strengthen the dollar following troubles at Bear Stearns.” The story which originally appeared in Nikkei English News went on to report that: “the intervention designed by the U.S. Treasury Dept. Japan’s Finance Ministry and the European Central Bank, called for the central banks to purchase dollars and sell euros and yen, with Japan providing the yen needed for the currency swap if the greenback’s value dropped significantly.

The three groups, which considered making an emergency statement through G-7, did not stipulate a specific exchange rate for the potential intervention, nor did they detail the amount of money to be used. Read more…

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