Is the Fed Going to Open Up the Dollar Spigot to Feed Europe's Dysfunction?
Keep em comin, boys!
St Louis Fed President James Bullard says there's no need for such drastic behavior. The line is already open and Bernanke is already sitting at the dock shoveling dollars onto cargo ships, what more do we need?
The U.S. Federal Reserve's dollar swap lines with other major central banks are "sufficient" to tackle current market strains, with take-up "pretty minimal" at present, a Fed official said Tuesday.
Responding to audience questions following a speech in London, Federal Reserve Bank of St. Louis President James Bullard said the swap lines are "certainly not tapped out," and could provide much more funding if necessary.
A little over $9 billion has been accessed so far, compared with over $500 billion outstanding in the program's first run, and Bullard said the far lower take-up indicates that dollar funding problems aren't as severe as in 2008-09.
"The facility is there as a back stop and that is the spirit with which it is offered," Bullard said.
"We can go much higher, hundreds of billions of dollars if necessary. We're not anywhere near that right now so I think it's sufficient and there is no limit on it."
Wait wait, did he just say they are ready with hundreds of billions dollars and no one to stop them if they feel like it? And aren't most of the acronymed monsters the Fed has come up with in the last two years meant to exist as back stops? I'm sick of that word, they better come up with something better.
For the record, Bullard sees the Fed's balance sheet returning to "normal" in about five years. FIVE YEARS! That's excellent, we'll get to doomsday before we get to that.
So far, this swap line, reintroduced after the eurozone started going to shit, has been tapped for $9 billion.
Good thing the European Central Bank is too big to fail, eh? Better put on those hot fireman pants and get to work, Bullard, I think you guys have some printing to do.