The Telegraph reports that central banks and official bodies have "parked" record sums of dollars at the US
Federal Reserve for safe-keeping.
For why?
It seems that they have lost confidence in the commercial banks.
Reserve funds from "official foreign accounts" have doubled since the start of 2011, with a dramatic surge since the end of July when the eurozone debt crisis spread to Italy and Spain.
For why?
It seems that they have lost confidence in the commercial banks.
Reserve funds from "official foreign accounts" have doubled since the start of 2011, with a dramatic surge since the end of July when the eurozone debt crisis spread to Italy and Spain.
Whilst the amounts are (in relation to the global economy) small ($100BN), the increase serves as an indicator of problems that resemble what happened in late 2008.
To add to the indicators of problems ahead, talks between Greece and a visiting troika of international
inspectors (IMF, the European Union, and the European Central
Bank) were suspended today.The talks ended abruptly this morning, as there is some disagreement over Greece's ability to meet its deficit targets.
The troika is expected to return in 10 days time.
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