I's hard not to laugh at the irony of recent central bank currency actions.
After complaining for years about the strength of the Real, the Brazilian central bank stepped up intervention actions hoping to stop a plunge in the currency.
Turkey now attempts to attract capital after taking measures for the past four years to stop the flow of money into the country.
In India, the central bank seeks to stop a plunge in the Rupee which is at a record low of record low 58.95 to the dollar.
Thanks to Katie Martin for pointing this out... South Africa's currency is getting clobbered again. Here's a chart of the dollar vs. the rand (USDZAR) which shows it shooting up since this weekend, easily surpassing the highest levels of late last week (levels that themselves were seen as alarming).
Wolf Richter www.testosteronepit.com www.amazon.com/author/wolfrichter Printing money and forcing interest rates to near zero, that’s how the Fed and other central banks papered over the Financial Crisis, duct-taped the bursting credit bubble back together, inflated new asset bubbles, and propped up TBTF banks. And in so doing, they accomplished a huge feat: a worldwide tsunami of hot money.
If you're just focused on US equities, or perhaps Japan, then you've missed another one of the huge stories of late, which is the bloodbath in emerging market currencies (South African Rand, being high on the list). So what's the story behind the selloff? SocGen's Kit Juckes has the quick take, in an email blast to clients titled "Dominoes Falling"
Fed chairman Ben Bernanke is at odds with Brazil, China, and even the IMF over his policies. Please consider the BBC report Bernanke defends Federal Reserve stimulus measures
Brazil has said US monetary easing to keep interest rates low and weaken the dollar has hurt emerging economies.
And International Monetary Fund chief Christine Lagarde warned on Sunday of consequent asset bubbles developing in emerging nations.
By Soos Global Capital:On the heels of my August 29, 2011, article titled, "How Emerging Markets Infrastructures Might Build Up Portfolios", and while on the subject of emerging markets opportunities, here’s another investment to consider - an ETF of emerging markets' fixed income securities in local currency ...
By Tom Lydon:
Investors are taking a harder look across the fixed-income spectrum for alternative sources of yields. While many have branched into other U.S. debt securities such as junk bonds, investors can also browse through emerging market bond exchange traded funds to meet their income needs.