hua? so your telling me that the only way to prop up the $ is to raise rates? Did you notice that we are in a ression and the rest of the world imports to us? so its in everyones best intrests to have a stronger USD without fucking up the economy. i know that the current admistration would never get involved in the currency markets. It really was not "costly and useless" when the G7 got involved in 9/2000 and took the euro off its lows. it actually did what everyone wanted it to do. my question is not if you think if its a good idea or not. but what would happen right after the news came out.
No, I'm telling you the best way to do it would be to raise rates. To answer your question. If I saw a bulletin that the G7 was buying dollars in the open market I would immediately go long the dollar, short gold, oil and a host of commodities. As far as how far USO would drop it would depend on the language in the bulletin.
First, the Fed won't support the dollar, anytime soon. A weak dollar actually boosts the economy, and doesn't impact much oil prices as some people want you to believe. Proof of this is that the Euro has almost plateaued, yet oil prices keep going up.
currency controls would be one way to do it although the stock market would get hammered let's say they restrict how much FX you could have in your account etc. not likely, but things are starting to feel panicky and a panicked politician is trouble
nobody ever said the fed/or paulson white house was gonna do it. i was wondering if anyone who trades oil could comment on it. i trade news and like to be prepared for everything. the governemtn or administration would never intervene, but you could always have the g7 minus the USA do it, (so the US governmnet can save face) or some other event that affects the value of the dollar. so if anyone who trades oil could comment that would be great.
yeah we all saw whay happened to Thailand last year when they did something like this. the US really could not do this because EVERYONE uses the $