How the Federal Reserve Manages the Dollar and Avoids Collapse

Will the Fed Sacrifice the Dollar To Save the Markets?

Buy Silver Bullion Rounds

The Dollar Index* is higher today than it was before the Federal Reserve launched a series of quantitative easing programs that involved printing over $4 trillion out of thin air in order to buy U.S. Treasury Bonds and mortgage backed securities from the too big too fail banks.

How did the Fed pull this off without causing a collapse in the dollar?

In the podcast below we show how Fed open mouth operations, yack attacks and coordination with other central banks keeps confidence in the dollar and demand for U.S. Treasuries elevated.

Dollar confidence and demand for U.S. Treasury bonds are two of the most important assets that the United States has and the Federal Reserve is entrusted with protecting both of them. Without foreign central bank demand for U.S. Treasuries, the United States could not conduct its welfare/warfare state deficit spending.

In this podcast we show why protecting or keeping the dollar in an acceptable range and demand for U.S. Treasuries high is more important than the Fed’s stated dual mandate of “maximizing employment, stabilizing prices and moderating long term interest rates.”

Sign Up For Updates Here!

A Dollar Not Too Strong, Not Too Weak

A dollar that is too strong makes exported U.S. military hardware too expensive for foreign purchases and dollar that is too weak can cause a lack of confidence in the dollar and can cause domestic inflation because the U.S. relies heavily on imports.

A point not made explicitly in the podcast – If an interest rate hike causes the equity markets to crash, demand for U.S. Treasuries will spike, thus furthering the Fed’s objectives of keeping demand high for U.S. Treasury bonds. (the plunge protection team/ESF can clean up the stock market mess if necessary)

Please have a listen and check out the charts and links below:

Please consider making a small donation to Thanks!

Sign Up For Updates Here!

Further Reading

Re the Petro Dollar Agreements – Why Saudi Arabia Matters in Helping to Keep the U.S. Dollar the World’s Reserve Currency

Why the Fed Raised Rates

Why The Fed Raised Rates and Will Do It Again If It Has To

Yellen speech Monday June 6, 2016

Buy American Gold Eagle Coins

The Dollar Index 2006 -2016

dollar index ten year chart

The Dollar Index hit a ten year high in early 2016.

The Dollar Index 1971-2016

Dollar index 1971-2016 chart

The Dollar Index peaked in the mid 1980’s after the Fed raised interest rates and the economy recovered.

Sign Up For Updates Here!

Check out all the Podcasts here

*The US Dollar Index currently tracks the US dollar vs. the Euro, the Japanese Yen, the British Pound, the Canadian Dollar, the Swedish Krona and the Swiss Franc. The Euro comprises nearly 58% of the index.

Dollar Index charts courtesy of Nick Laird at Sharelynx.

If you have enjoyed this report, please consider sharing it, buying your precious metals through the Smaulgld affiliates linked to on this site* and subscribing (for free) to

Get Free Updates From

Subscribe to and get the free In Case You Missed Itweekly email as well as updates and analysis on gold, silver, real estate and the economy.

Also get the free report “Twelve Key Differences Between Gold and Silver” when you subscribe.

Subscribe to to receive free gold and silver updates, news and analysis.

Please visit the Smaulgld Store for a large selection of recommended Kindles, books, music, movies and other items.

You can support by making all your Amazon purchases through the search widget below and by ordering your gold and silver by clicking on the JM Bullion, BGASC, Bullion Vault, Gold Broker, Golden Eagle Coin, GoldMoney, SD Bullion, Perth and Royal Canadian Mint ads on the site.

Browse Silver Coins on Amazon

Buy Silver Austrian Philharmonic Coins

Browse Collectible Coins on Amazon

DISCLOSURE: Smaulgld provides the content on this site free of charge. If you purchase items though the links on this site, Smaulgld LLC. will be paid a commission. The prices charged are the same as they would be if you were to visit the sites directly. Please do your own research regarding the suitability of making purchases from the merchants featured on this site.

Chart Disclaimer: Information presented here has been obtained from a third party and is presented for information purposes only. Smaulgld can not and does not guarantee the accuracy or timeliness of the data displayed on this site and therefor the data provided should not be used to make actual investment decisions. You should always consult a professional investment adviser before investing in precious metals or any type of investment. You acknowledge that Smaulgld assumes no responsibility for the integrity of data on this site.

The content provided here is for informational purposes only. Making investment decisions based on information published by Smaulgld (SG), or any Internet site, is not a good idea. Accordingly, users agree to hold SG, its owner and affiliates, harmless for all information presented on the site. SG presents no warranties. SG is not responsible for any loss of data, financial loss, interruption in services, claims of libel, damages or loss from the use or inability to access SG, any linked content, or the reliance on any information on the site.

The information contained herein does not constitute investment advice and may be subject to correction, completion and amendment without notice. SG assumes no duty to make any such corrections or updates. As with all investments, there are associated risks and you could lose money investing. Prior to making any investment, a prospective investor should consult with its own investment, accounting, legal and tax advisers to evaluate independently the risks, consequences and suitability of that investment. SG disclaims any and all liability relating to any investor reliance on the accuracy of the information contained herein or relating to any omissions or errors and as such disclaims any and all losses that may result.

Post Navigation