User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Wednesday August 11, 2010 - 00:37:15 GMT
Foreign Exchange Analytics -

Share This Story:
| | Email

Fed Policy Inflexion Point - Balance Sheet is New Orientation (FXA)

Fed Policy Inflexion Point - Balance Sheet is New Orientation


Today is more about symbolism than economic recovery when it comes to sizing up the Fed’s decision to reinvest proceeds from maturing MBS, GSE debt ahead.  In case you forgot Hilsenrath said as much in his ex post well informed article he also said the move would be small in its significance but big for symbolism. 


Heck it is really big on this front – the Fed is no longer targeting a rate of interest (first), but is targeting the size of the balance sheet (remember the BOJ stopped targeting call rate and started targeting bank reserves held at the Bank?. 


Future policy easing will involve increasing the balance sheet from current target at $2.054trln.  Indeed future tightening will involve cutting the balance sheet target. 


The other part of the symbolism in this “modest” move is the inference that the Fed is in this for the long run.  Monetary policy impacts the real economy with long lags and indeterminate force.  All the Fed has done to date is kept zombie banking system alive and provided enough liquidity to drive up risk asset prices.  But we are learning that inventory-restocking blip in GDP is no recovery in the real economy and the Fed transmission mechanism to the real economy (bank credit creation) is not functioning.  Sadly we are also learning that the link between stock prices and consumption (wealth effect) are no longer as strong as they were back in the early part of the 2000’s and in 1987.  First of all the crash in stocks from the November 2007 high to the spring 2009 low saw many retail investors exit and they have yet to come back.  They did not experience the rebound in stocks through 2009 and 2010.


But more importantly households are stuffed full of debt and deflated assets (homes, boats, autos, RV’s, plasmas, granite counter tops…) and is in no position to drive a US recovery much more global recovery.  Businesses (not small- and medium-sized ones which are struggling to pay rent) are sitting on piles of cash because they do not see growth in orders and who in their right mind in corporate America would expand capacity when there is plenty of unused capacity?  Don’t believe for a minute the Kool-aid (politicized) explanation parroted on every TV report that Obama care, cap and trade, Bush tax cut expiration (always temporary) or gvt in businesses like GSEs and GM is behind corporate hesitance to spend.  If orders double and taxes go up quarter, you can bank on it that a firm will invest (and hire) well over the cost of the tax increase.


I am not sure the Fed can do much for the real economy.  Maybe if the banking system was nationalized and good banks spun out without toxic assets and shadow banking dominant propensities it might be different.  But this too ignores the need to deleverage.  This will take years.  No amount of Fed balance sheet expansion can change this process.  The only quick path to recovery is debt forgiveness – mortgage writedowns by banks, loan forgiveness including credit card, student and auto loans.  This is highly improbable politically and would do for households what TARP did for banks…drive home moral hazard…privatize upside (durable goods consumption) and socialize downside (debt forgiveness). 


The most the Fed can do is prevent a depression (along with WH and Congress).  But restoring a vibrant and growing economy will depend on some other part of the planet filling in for the US consumption engine…Europe, China, Brazil, India and Russia come to mind…about as probable as peace in the Middle East.


David Gilmore


Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."

Actionable trading levels delivered to YOUR charts in real-time.

Register To Test Your Amazing Trader

GVI Trading. Potential Price Risk Scale
AA: Major, A: High, B: Medium

Mon 10 Sep 2018
AA 08:30 GB- GDP, Trade, Output
Tue 11 Sep 2018
AA 08:30 GB- Employment Decision
A 09:00 DE- ZEW Survey
Wed 12 Sep 2018
A 12:30 US- PPI
A 14:30 US- EIA Crude
A 18:00 US- Beige Book
Thu 13 Sep 2018
A 1:30 AU- Employment
AA 11:00 GB- Bank of England Decision
AA 11:45 EZ- European Central Bank Decision
A 12:30 US- Weekly Jobless
AA 12:30 US- CPI
Fri 14 Sep 2018
A 08:30 GB- GDP
AA 12:30 US- Retail Sales
A 13:15 US- Industrial Production
AA 14:00 US- prelim University of Michigan

John M. Bland, MBA
co-founding Partner,

Global-View Affiliate Program

We are starting an affiliate program to market some of our products.

Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.

Put the word "affiliate" in the email subject line.

Contact us

Start trading with forex broker Markets Cube

Max McKegg's Daily Forex Trading Forecasts

Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.

Request a TRIAL of Max's Forex Service.


Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map

Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.

Forex News

The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.

Currency Trading

Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by

Forex Brokers

The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.

Forex Trading

Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.

FX Trading

Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.

Forex Blog also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.



By using this website, you are agreeing to our Privacy Policy and Terms of Use, and Cookie Policy

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105