• Price Change UP Icon Gold $2,231.00 +41.00
  • Price Change UP Icon Silver $24.95 +0.39
  • Price Change UP Icon Platinum $915.00 +11.00
  • Price Change UP Icon Palladium $1,026.00 +25.00
Precious Metals & The Fed
August 9, 2023

Can the present financial crisis be solved by central banks injecting money?

Reuters, by James Saft in
Share On Social Media

“The central banks’ money market rescue is more like a heart defibrillator than a Heimlich Maneuver: a trip to intensive care is needed afterwards, rather than just a deep breath and drink of water.

Central banks including the ECB and U.S. Federal Reserve on Wednesday announced plans designed to provide more liquidity for longer terms to gummed up interbank money markets, including steps to allow anonymous borrowing against a wider array of collateral.

The plan should ease funding over the critical year-end period, reducing the chances of an otherwise sound bank getting caught in a liquidity death spiral.

But banks’ unwillingness to lend each other money is a symptom of their underlying weak capital position and of justified suspicion over the value of assets and the health of their peers.

What’s worse, with every day the value of U.S. real estate declines, increasing the size of the bill that must be paid, and spreading darkening clouds over the rest of the economy.

‘It doesn’t address the root of the problem,’ said Richard McGuire, fixed income strategist at RBC Capital Markets in London.

‘It perhaps promises to ease the year-end acute liquidity problems but over the medium term the real issue remains the uncertainty as to loss provisioning from the U.S subprime mortgage debacle.’

Which is not to say the plan is not worth doing. To the extent that high interbank interest rates are about liquidity, it will work, and should help to reduce the impact on consumer and corporate borrowers.”

*This information is solely an excerpt of a third-party publication and is incomplete. Please subscribe to the referenced publication for the full article. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.

Get Your Free Report
A Rising Storm
All form fields are required *
Thank You

Want your kit sooner?

Faster delivery
is available by phone.

800-444-8317

Download Your Report

Enter your phone number to be connected to a Monex Account Representative.

Thank You
Want your kit sooner?

Faster delivery is

available by phone.

800-444-8317
All form fields are required *
Embed Spot Prices!
Copy and Paste below code into your HEAD tag / before end tag of body to embed chart.
Copy and paste code below wherever you want your chart displayed.
Copied to clipboard
Embed This Chart!
Copy and Paste below code into your HEAD tag / before end tag of body to embed chart.
Copy and paste code below wherever you want your chart displayed.
Copied to clipboard
FREE REPORT OFFER
A Rising Storm
Thank You
Please check your email for a confirmation link and Free Report!
I agree to receive news and promotional material from this website and understand I can cancel at any time. Privacy Policy