How to be your own central bank
In his words, “What tends to happen is your syntax collapses… All of a sudden, you are mumbling. It often works. I created a new language which we now call Fedspeak. Unless you are expert at it, you can’t tell that I didn’t say anything.”1 Recently, in a departure from ‘Fedspeak’, Central bankers around the world have made their intentions known about how they plan to manage their foreign exchange reserves, giving investors a rare glimpse into how to manage their own portfolios. Daniel Mminele, Deputy Governor of the South African Reserve Bank, recently gave his view on the impact of the Federal Reserve tapering of its bond purchases. He believes that asset purchases by the Fed have significantly elevated prices for US Treasuries. With more than 60% of South African foreign exchange reserves held in US dollars, he has a lot to lose.
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