I was reading through the crisis timeline I downloaded from the Fed website, and one item that keeps coming up is the Fed arranging swap lines with foriegn central banks for currency exchange. I did a little research, and based on what I read, it seems that this is nothing more than a way for the FOMC to create more money by buying foriegn currencies. I admit, I don’t know too much about currency swaps, however, so if anyone here could shed some light on what these swap lines are all about, I’d appreciate it. They have hundreds of billions tied up in these, so I’m kinda concerned about what they’re up to.
The Rev