DOING WHAT IT TAKES
by Rob Kirby
KirbyAnalytics.com
July 19, 2007

These words uttered by Dallas Fed’s Richard Fisher and reported by the Daily Reckoning’s Bill Bonner have stuck in my craw,

Bill Bonner - Other articles
Thu 13 Apr, 2006 

The unstable dollar

"The Federal Reserve will do what it takes to maintain
its credibility, which is central to preserving the
integrity of the US dollar," Dallas Federal Reserve Bank
President Richard Fisher said on Tuesday.

This report, from Reuters, continues:
"We seek to get it right. And the answer to your
question is we will do what gets it right," said Fisher.
 
Answering audience questions after a speech to the
Dallas Friday Group, Fisher said the US dollar is a
"faith-based currency" dependent on the credibility of a
central bank.
 
"In addition to a faith-based currency, we are the
currency of the world and we must maintain its
integrity..."

So what exactly would you suppose “Doing what it takes” involves anyway?

Any guesses?

What if someone threatened the basis of U.S. Petro-Dollar hegemony?

            July 13, 2007

Iran demands oil pay in yen not dollars

The dollar fell against the yen this afternoon on reports Iran has asked Japan to stop paying for its oil in dollars

Robert Lindsay 

The dollar was driven down against the Japanese yen this afternoon, hit by the news that Iran had asked Japan to pay for its oil purchases in the Japanese currency and not in dollars…… 

Would or could this serve to drive the U.S. Dollar price of oil higher?

Would such a development be considered a ‘virtual’ declaration of war?

What would be an appropriate response?

Would or could “Doing what it takes” involve attempts to cap the price of strategic commodities?

Today, Bear Stearns told investors in a couple of their flagship hedge funds that their investments in said funds had been reduced to ZERO. 

How is it that U.S. Dollar denominated investments held by hedge funds can go from being rated “TRIPPLE A” to junk in one-fell-swoop?

Could or would such a development give cause for investors to lose faith in the U.S. Dollar?

If faith in the Dollar was compromised, would the following be invoked?

            May 23, 2006

NEWS
By Dawn Kopecki

Intelligence Czar Can Waive SEC Rules

Now, the White House's top spymaster can cite national security to exempt businesses from reporting requirements

President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations. Notice of the development came in a brief entry in the Federal Register, dated May 5, 2006, that was opaque to the untrained eye………

Which institutions would qualify?

Does “Doing what it takes” involve telling the truth?

Does doing what you need to do – to protect yourself – involve owning gold?

© 2007 Rob Kirby
Editorial Archive

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Rob Kirby
Kirby Analytics
Toronto, Ontario, Canada
Email

The opinions of FSU contributors do not necessarily reflect those of Financial Sense.