Mr B has mentioned again that intervention to save the dollar should be taken when necessary.
I gather that he is planning to buy dollars along with his new pal Hank, but what is he intending to buy them with.
Obviously with the yellow metal knocking on a grand an ounce that is one option for Mr B, but is there any gold left or is it all out on loan.
I remember (vaguely) the big push a few years ago to turn the yen.
Billions were thrown at the task at strategically quiet market times and yes the chart did reflect the effort before it went back to where it was.
This question is too big for me and I now turn it over to ET
Yes intervention does not work in the long run. The fx marketplace is too large (est daily dollar volume over 3T USD) for any sustained effect if only a few billion dollars are thrown at it. When fed banks try to intervene, you are talking about 5, 10, 25 billion used to influence the direction and help prop the value of the intended currency. It might work for those that don't have the extensive coverage of major currencies (like last weeks S Korean intervention of the WON), but in the long run, intervention will not have any sustained effect on the majors like USD, EUR, GBP, JPY, CHF. The only thing that can affect these currencies is the underlying financials of the country in question, i.e. interest rates, debt ratios, etc.