For all the winging and moaning about the dollar, foreign central banks continue to scoop them up and plop them into US Treasuries. Holdings of Treasuries at the NY Fed rose $28.6 bln in the last week alone.
Remember, when you hear reports of Russia, Korea, Brazil and all the others intervening to buy dollars, most (of the one’s they don’t trade for euros) end up in Treasuries, keeping US rates low (which the central banks then complain about).
When the central banks let their currencies strengthen and stop adding to billions to their reserves, the world will be a better place and the global economy will come into better balance.
