Mark Moss breaks down the U.S. Exchange Stabilization Fund's actual firepower: $217 billion in assets, but only $18.8 billion in spendable foreign currency. That's roughly $13 billion in euros and $5 billion in yen. A leaked Camp David photo showed hedge fund manager Scott Bessent with a note about buying $5-10 billion worth of yen, suggesting the U.S. is seriously considering propping up Japan's currency.
A stable yen is important, not just for the U.S., but for the entire region. So it's very important. They're going to do a lot to prop up, to save that currency. Okay, so we have to understand it's super important to them. They're going to be doing that. Now, how? How will they do that? Well, the Exchange Stabilization Fund. Now, this is as of June 30th of this year. And what this shows us is that there's about $217 billion in total assets to Stabilize exchange rates. What it sounds like, right? About $217 billion in ammunition. But the problem is about $172 billion of that is already accounted for in the SDR book. These are special drawing rights. This is what the IMF has. Okay, that's already accounted for, which leaves only about $43 billion as a net position that they have to work with. But it's even less than that because only about $18.8 billion is spendable foreign currency. And within that, about 13 billion is euro and about 5 billion is yen. Okay, so this is the ammunition, as I say, in order to do this. At Camp David, Scott Bessent was there and he got photographed. Someone caught him, some paparazzi caught him with his legal pad, with his notepad out. And on that notepad, on that legal pad, he had reminders, tasks, things to do. And it said, to do, buy Japanese yen. $5 to $10 billion, propping it up. They were selling euros because they don't want to hurt the dollar, selling the euros down to buy the Japanese yen up. They're telegraphing.
