Norway central bank declines comment on planned U.S. dollar auction

[turbinetree]

Source: Reuters

MARKET NEWS MARCH 24, 2020 / 12:38 PM / UPDATED 2 HOURS AGO

OSLO, March 24 (Reuters) - The Norwegian central bank declined to comment on Tuesday on the details of a planned US dollar liquidity auction due to take place on Thursday.

“I cannot confirm the details as of yet,” a bank spokesman said.

Earlier on Tuesday, Denmark’s central bank said it would auction U.S. dollars to commercial banks and other financial institutions on March 26 together with Sweden and Norway’s central banks. (Reporting by Nerijus Adomaitis, editing by Gwladys Fouche)

Read more: https://www.reuters.com/article/health-coronavirus-norway-cenbank/norway-central-bank-declines-comment-on-planned-u-s-dollar-auction-idUSO9N28600I

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A Dollar auction explained......................

https://www.investopedia.com/terms/d/dollar-auction.asp

[Miguelito Loveless]

1. Okay, I understand the explanation

I don't understand why you would ever be able to find a second bidder. Also, the person holding the auction makes out like a bandit, as he gets more than a dollar for his dollar every time.

[turbinetree]

2. This also shows the strength of the currency in play..................

and the world will be watching ......................either you believe it is worth it or you believe it is not..............

[Jim__]

3. Bloomberg has a different explanation of a dollar auction.

The investopedia description makes it sound like a demonstration of a paradox.

Bloomberg describes it as a rational action - at least by my understanding:

The Federal Reserve and five counterparts united to ensure that dollars keep flowing around the world after the coronavirus emergency sparked a rush for greenbacks.

In coordinated statements on Sunday, the Fed, Bank of Japan, European Central Bank, Swiss National Bank, Bank of Canada and Bank of England said they would use their swap lines to support the international supply of the world’s reserve currency. They added a weekly offering of dollars over a longer maturity, and reduced the cost of the facility.

The aim is to meet the needs of companies and financial institutions rushing for dollars as the global payments system undergoes severe strain due to the coronavirus. The Bloomberg Dollar Spot Index soared the most since the financial crisis in 2008 last week, reflecting enormous demand for the currency.

“For international financial markets, where the U.S. dollar dominates as an international currency, strong U.S. leadership in containing global market disruptions is still essential,” said Shigeto Nagai, chief Japan economist at Oxford Economics in Tokyo, who previously worked at the Bank of Japan. “I initially worried that the U.S.-first Trump administration may hesitate.”

more ...

[Dan]

4. I've been wondering about this, with all the money that the Fed has been pushing

and wondering, what happens to the value of the dollar when you keep printing money...

[beachbumbob]

5. Fed/PPT efforts have throw several Trillion $$$ at the easily over last

month, so when do will we see the dollar so diluted, it would to be "devalued"?

[LudwigPastorius]

6. This is due to Trump's tax cuts for the rich.

Emergency spending now, to keep a major depression at bay, wouldn't drive up the deficit as much if we had paid down some of that debt, instead of giving the 1% a windfall.

As it is, the dollar as reserve currency is looking less and less attractive.

[NonPC]

7. That's Why Gold is Skyrocketing

Gold was up $50 / oz yesterday, and $95 / oz today. There's enough people in the world that think the US Congress and the Orange Stain will print enough money to seriously devalue the dollar. Tough to really manipulate the world gold market, although I think the main governments are able to do that fairly well. China has been stockpiling gold and gold-rich ore for years now, waiting for the US Government to blow up the dollar. We may be close here.