Why the FIMA Repo Facility Can’t Save Japan (Or the U.S.) - SchiffGold.com
Why the FIMA Repo Facility Can’t Save Japan (Or the U.S.) - SchiffGold.com
Source: SchiffGold.com
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DW NOTE
The FIMA facility lets foreign central banks pledge Treasuries for overnight dollar liquidity. SchiffGold thinks this solves nothing because Japan's problem isn't access to dollars — it's that defending the yen by selling Treasuries creates the very dollar shortage the facility is meant to cure. The real constraint is that Japan can't simultaneously hold yields down, defend the currency, and avoid liquidating its reserves.