The MOST insightful interview on the Macro functions going on in our world. Wow GREAT actionable information. This video was made 1 year ago and much of it has played out exactly as these two guests suggested it would. GREAT interview !!!!!
Brent at 43:01 "it is not a sustainable system and I've said this a hundred times but a fractional reserve system is a system that *must grow* and if it doesn't grow, it crashes."
I cannot agree more with Jeff. What we are taught in University about how the financial and the monetary systems function, most likely has never really existed that way. A key-realization for starting to understand our current geopolitical, financial and monetary situation.
@@pinkpalmsmusic I've watched every video since they started, learned so much. Don't blindly agree with everything but really opened my eyes to things and views I've never heard.
In 2008 if the Fed didnt care about overseas markets they wouldn't have engaged in the massive currency swaps that they did with foreign central banks. In fact, it is not an international monetary system of national central banks, but one nonnational monetary system.
Thanks guys. I missed it I guess. I am trying to find out why, if eurodollar is the same as a US dollar, why is GE1 so much stronger than DXY? Is GE1 the real value of the dollar?
It sounds like the EuroDollar system has to respond to shortages in dollars/reserves by calling loans and allowing for an autocorrection. I suppose since it’s all linked it could lead to a collapse of at least that monetary/financial system. sounds like a great source of credit for crypto-trading, or any form of speculative lending and trading.
Not sure I get the problem with eurodollar shortage . It's basically the same issue as local dollars? The amount of money is shrinking so it's more difficult to service the debts?
Why would US subsidiary banks overseas borrow Eurodollars and then send them back to the US? Can they borrow dollars cheaper overseas than they can in the US? Why would that make sense if dollars are in such a shortage overseas? If there's a shortage, wouldn't the interest rates there be higher?
I don’t understand Jeff's explanation around 23:00. If the Swiss central bank received an influx of dollars, they had to maintain their peg to gold and back the dollars with "US" gold. How is gold "US" gold versus any other kind of gold? Isn't gold, gold? Then he says that they swapped these dollars back to euro dollars, allowing the US to keep their gold. How are eurodollars maintained separately from regular USD outside of the US? Isn't a dollar a dollar, regardless of where it gets generated? It would be helpful if they could explain these basic mechanisms in order for me to understand the whole picture. It sounds like there was never any gold backing the Eurodollars, even before the US went off the gold std in 1971. As a result, no peg to gold was needed. Maybe this is part of the answer?
Banks create money when the give out loans. The reserves are backed by the fed. The banks outside of US are making loans in dollars their reserve s are not backed up by the fed . When we have recession and these loans go bad these banks get into trouble. This system is huge and unregulated.
@@charlesputnam9370 , I understand now. The answer is that USD outside the US does not need to meet any reserve requirements, even if the banks that hold the USD are subsidiaries of US banks. Damn, that seems so crazy. It's like offshoring money is a way to avoid regulation.
After 2008.. We saw anonymous companies based out of belgium creating a demand for US treassury bills.. Some said that these companes were overseen by the monitaty comitee..to artifocially create a demand for treasury bills.. The credotncreated was then exporter probably into the eurondollar market that was used in the yen carrytrade...and drove the markets in china and india... Anothr point is that most of the crappy secerities bought by th e fed in exchange for dollars bank liabilities..say for goldman sachs ..went to pay insirance parties like Aig. In london ... So dollar was exported there as well.. This external dollar expansion ..was also droven by subsequent Fed programs..but i beleove they sold treasury bills to intetnational banks who lent it out to hedge funds in exchange for company bonds created by securtisation of consumption ..u could see that in india with the rise of zero interest emi payment programs ..the consumer account recevables where packaged and securitised ...and sold to hedge funds...
I think I understand. Overseas banks that have US dollars are using them as reserves to make loans in dollars. Thus they are creating dollars. Their reserve s are not backed up by the fed. If the economy goes down and their loans go bad they get into trouble. US banks have federal reserve to keep them solvent.
@@RohitKumarForever That why I listen to Emile and Jeff learn new stuff all the time. You can Google information about Eurodollar market. I took economic s in college a long time ago and did not know about it till I started listening to this podcast. Sometimes the algorithm gods send you something interesting.
interesting that the "dollar shortage event" that these folks say caused the gfc, occurred after the US clinton govt ran surpluses. And what does a govt surplus do - takes dollars out of circulation! I would think this is something to track - if the US govt deficit starts to move closer to zero (e.g. delayed/reduced stimulus bills). This is one way that banks can reduce credit growth without causing a crash - the US deficit needs to expand to fill the gap left by credit shrinking
48:17 this looks about a year-and-a-half old. Looks like you were wrong about central banks not buying gold. Looks like you never saw bilateral deals in individual currencies, Brazil and China, Iran and Russia. BRICS+ going commodities-backed (digital) currencies.
I think it is because the banks stopped lending to each others during the crisis due to loss of confidence in the US house market, which had become a de facto global collateral. No lending between banks means no creation of Eurodollars. That shortage spread everywhere, compounded by the fractional reserve system.
Fucking superb. Now that it is a few years later and I can put my hindsight glasses on, the only thing I can pick on Jeff about is that we did end up seeing significant and lasting inflation.
price increases, not in-FLATIOn. Words have meanings and inflation ONLY means an increase of prices directly caused by the inflation of the monetary base. This is why it is called inflation. When your government does everything to make a product more expensive than this is not inflation. It is simply stuff getting more expensive by dictate. If men made crisis (Covid Shutdowns, Ukraine War, China Conflict, Trucker Protests, Labor Shortage) decrease the supply of stuff, then prices will increase...still not inflation.
Food shortages by using pcr testing to “determine” bird flu and intentionally destructive policies like CA letting enough water to serve a million people for a year to drain out to sea will do that. Why? To give 1,000 salmon a chance. Then, the drought caused CA to reduce water use for farming to 1/7th of previous amt.
Is the IMF $650 Billion of SDR intended to sure up global confidence and provide liquidity targeted at developing countries who trade in dollars within this Eurodollar system?
@@FirstLast-tx3yj no, they mean is gonna collapse due to the lack of eurodollars. You can see the DXY now that's partly one signal, there aren't enough eurodollars to cover all debt.
@@juanok2775 what are the possible ways to trade this? I know its not financial advice but please some guidance I get the part where usd will be stronger but how will it affect the eurodollar futures? Please some info i just want to know how to trade this
@@FirstLast-tx3yj it is very hard to do short term trade because this are long duration events. Normally the bonds like TLT that are crashing go up very fast but this could take 6 months or more.
If the Eurodollar system collapse was the start of the GFC ~2008, which foreign bank(s) went bankrupt around that time due to defaults on bad loans that were denominated in USD? This would have had to have happened in order to start the domino effect but I only hear of US banks and AIG having been the ones who started the collapse. I never hear of any other banks outside the US that went belly up prior to the ones in the US.
Any on-shore off-shore bank connected to SWIFT can create fiat US currency out of thin air .... Thus, any government in the world can step in inside their jurisdiction and lower the commercial bank's reserve requirements to ZERO to create a infinite amount of fiat U.S. dollars out of thin air and thus, any government can bail itself out by printing USD fiat currency out of thin air ..... EURODOLLAR system! We are all rich as long as your country's bank system is not disconnected from SWIFT.... So there are no U.S. dollars... what we have right now, is FIAT WORLD SWIFT DOLLARS.... So ... say a small country (Barbados in the Caribbean) is bankrupt, like most of the countries, well, they can use SWIFT to create more U.S. dollars to keep the lights on ... Barbados can come up with some government issued BONDs that are worth USD $1 trillion because Barbados Island is worth USD $1trillion and use it as collateral to print more USD into existence via First Caribbean International Bank (a commercial bank) and the international SWIFT banking system... and those freshly minted USD $1 trillion are as legit as FED created USD out of thin air... and all international banks connected to SWIFT can not do anything about it ... the isle of Barbados is now 1 TRILLION USD richer! ... Saludos de Costa Rica!
jeffrey snider always predicts deflation. And he is right and wrong at the same time. He is right because the eurodollar system has always a shortage for dollars. And in a fractionary reserve system with a big leverage the need for dollars outside the US is really big. But when something breaks in the eurodollar system causing a deflationary shok the Fed prints a lot of money (in QE) to suply this need for dollars outside the US. However the dollars created by QE dosen't flow into the eurodollar system because the comercial banks do not land this money to the public or even for foreing banks. At the same time the IOER over the excess money in the balance sheet of the banks create more money that can be used for the comercial banks for buyng more treasuries or even be used to create more loans on the US. So you have this situation where you have a lot of liquidity in US banks and a scarcity of liquidity in foreing banks what creates a inflationary tendency in the US and a deflationary tendency outside the US. And each time where the eurodollar system has a deflationary shok the response of the fed dosent resolve the problem because the liquidity that he creat doesnt flow quickly into the system because comercial banks in the US will not land this money (they are already worried about their own risk assets) Right now the world has 1.2 quadrillion in derivatives. If the colateral of this derivatives evaporate we will see all the dollars in the world be sucked by this leverage contracts. So the solution will be the Fed creat quadrilions of dollars to suply this risk asssets? it's insane. And even the Fed do that and create quadrilions of dollars to suply a massive deflationary shok outside the US the comercial banks in the US will not loan this money to the real economy in the US or outside the US (because in the first moment this huge impression of money will cause a massive inflation in the US if comercial banks give this money to the public. And even if he didnt give this money and the money stay in the balance sheet of the comercial banks in the US the money will be automatically created by the IOER fee)
Definition of Euro Dollar. I take a Dollar I put it into France and I have a Euro Dollar! I take a Black Man I put him into Russia and I have a Black Russian!
I agree with the following: "All war and natgas shortage already priced in, and waaay too much. It's just a commodity with a price, if it's too expensive, and if industry cannot switch fast, no problem for people however, electric heaters cost double each month with minimal initial investment, like 100Euro or so, so instead of 360Euro per winter, it can be 700E in total for the entire next winter, and you should compare with 360 not with zero. Only the difference is what matters. As a percent of GDP/capita is not even 1% and it was priced in like 40% or so. Moreover is not like Europe doesn't have gas at all, or even less than other places, but it was not worth doing even prospects due to razor blade thin profits. Bill Gates would not drill in his backyard, so further you go east in Europe there is more gas because there are less Bill Gates per square km. So yeah, they will be affected like 2-3% in total, but not 30-40-50%. Except for food (for which Eu is a net exporter) the raw materials price out of a finite product price is something btw. 1-10%, depending on amount of processing and added value. So with 50% increase in raw material price, the final product gets hit by 0.5% to 5% -and that's globally, not only EU. But speaking about competitive advantage we can only consider the differences, so if E.g.: get 20% more expensive in EU than other places, this means even less: 0.2% to 2%. I wouldn't say Germany and Europe lost their competitive advantage, the operational margins except energy, mining, etc, are well above 10%. Who says the competitive advantage of European products (think Mercedes, BMW, French perfumes, etc), stood in 0.2%-2% price difference doesn't know what he's talking about. Since the great deflation of 2008 both US and Eu started to lower interest rates to stimulate credit, but this doesn't mean people borrow if they are still scared. So it's the ECB and Fed where all borrowed money and spent appear on screen and their balance sheet. Only in 24Feb 2022 the EU inflation rose from negative of 2009 to 2%, in US & UK this happened in mid 2018. Asset prices recovered top 2007 prices even earlier in US & UK in 2017. In contrast in EU, they never reached 80%, even today, even though after a much lower initial increase. All the Central & Eastern EU growth (due to abrupt increase in productivity -from lack of previous investments, was not matched nearly by consumption & credit. You can decrease ECB rates to -10%, if people don't go borrow from banks no money gets created. If in the meantime productivity increases due to lack of previous investments (from simple things like a tractor instead of physical labor -the increase can be like 100x, much more than from very modern tech, like an iPhone replacing a fixed phone) you are still in a deflationary environment -even with that -10% ECB rate. But the same thing happened with USD -due to the rest of the world, not the US, so there is no inflation for USD actually, neither for Euro, possibly for GBP and Yen as their excess turn into inflation much faster -much smaller and super-developed economies with less room for productivity increases."
I think anybody who believes in $100,000 BTC is an idiot. BTC will probably peek at $24,000 by the end of the year due to inflation. The price on everything is skyrocketing. Nearly doubled over the last six months. The problem is there were never altcoins in the past. So bitcoin didn't have a competitor or any competition. Now with competition I would much rather put my money into a Altcoin instead of Bitcoin. I think Chain-link is a perfect example up 1000% this year. I would much rather buy 800 chain-link, then 1 BTC.
I am really new to this and not very good comprehending. i found myself along at 55 without any education. i need to make the most of my money and pretty reliable income. any ideas for me
@@felixjoe8574 But the only genuine platform i can recommend you is if you try Mark Hugo crypto trading service,he has been a great mentor a motivator and an inspiration in all matters of life,a trader with the master plans to create more profit than expected.
OK, is it time to TRY to get an estimate of the total world $ supply? No? Better not to know, huh? Ignorance is bliss, huh? Till the unknown totally bites us in the ass. Maybe this "$ shortage" is currently being alleviated by tethered "stable-coins" and DeFi in the cryptocurrency space? There you go - Crypto (one in particular) saves us (in too many ways to list here).
Try looking up global money supply on Visual Capitalist- truly eye opening for me, especially the supply of derivatives, for which there is no accurate count, and is estimated at potentially over one quadrillion dollars. My best guess is that much of those derivatives are eurodollar futures, swaps and spreads held by foreign banks.
@@steventokeshi8847 Absolutely. The amount of money-like, financialized stuff out there is mind-boggling. So much so that those who own most of this stuff have lost all concept of value. The value of money is kept by those who don't have much of it - which is why those folks must constantly get squeezed, and are deemed "essential workers" (like slaughterhouse workers). These folks always have a "$-shortage" - They serve to keep money dear (if not exactly valuable). Real money is dear, in-and-of itself, for everyone - Gold, and especially Bitcoin, come to mind.
it was an absolute pleasure seeing these 2 guys bouncing their ideas off of each other
Excellent discussion. "It's not a sustainable system..." was said ever year since 2008. Crazy as it is.
Under rated comment
The MOST insightful interview on the Macro functions going on in our world. Wow GREAT actionable information. This video was made 1 year ago and much of it has played out exactly as these two guests suggested it would. GREAT interview !!!!!
Where can I learn a foundation 101 of this?
@@jackinsonpablanes760 Just type in Brent Johnson or Jeff Snider. They both know about this Jeff is the MOST specialized on Euro dollar.
Brent at 43:01 "it is not a sustainable system and I've said this a hundred times but a fractional reserve system is a system that *must grow* and if it doesn't grow, it crashes."
banks do not lend reserves. this is what alf says again and again. th-cam.com/video/LDwZqOuY0mQ/w-d-xo.html
This was the missing podcast topic. These were the two best people to opine on the subject. Moderation was also great. Thank you.
One of the best non-hysterical conversations on the monetary system I've come across.
Thank you Julie! And thanks BlockWorks, Jeff & Brent.
Glad you enjoyed! See ya next time
Deserves to have way more views!
Jeff Snider is so smart and I've been following him for a long time.
I cannot agree more with Jeff. What we are taught in University about how the financial and the monetary systems function, most likely has never really existed that way. A key-realization for starting to understand our current geopolitical, financial and monetary situation.
Only 1.6k views? That is incredible, everyone should watch this.
7/14/21 only 8k views? unbelievable!
Blockworks macro = reading the daily newspaper 💯👍
I'd actually watch Jeff talk for 20 hours.
Between the five or six videos I’ve seen with him and the ones I have bookmarked for later I’ll be there soon 😆
He has a 7 part series in Robert Breedlove’s What Is Money show.
oh you can hear him talk for 20 hours. just listen to eurodollar university :D
@@pinkpalmsmusic I've watched every video since they started, learned so much. Don't blindly agree with everything but really opened my eyes to things and views I've never heard.
I was hoping to hear, how Eurodollar Libor rates in future market ( London ), affects FED fund rates.
And also I was hoping to hear how IMF SDR works.
Thanks for this, gentlemen. Very educative and perfectly moderated.
Brilliant gents, love when you two catch up 🥳
Jeff snider content is waaaay advanced for the majority. Lol. He's a beast.
Fascinating and eye-opening. Thanks for posting
I am glad you have this video to go back to
Excellent analysis
Holy crap that was jeff 2 years ago?? dam.
Most substantial video on youtube.
Holy shit. Didn’t even recognize Jeff lol. This was only a year ago!!?!?!?
great video for all round understanding
Thanks, very good conservation
In 2008 if the Fed didnt care about overseas markets they wouldn't have engaged in the massive currency swaps that they did with foreign central banks. In fact, it is not an international monetary system of national central banks, but one nonnational monetary system.
Best finance analogy ever ... Eurodollar players are 18 yr olds drunk on 3.2 🍺 😂
Excellent podcast, very very informative...
Really good interview, thanks for the content :)
Great video, cheers from Brazil
great video
Thanks!
It was these same people that said inflation couldn’t happen and it happened. Take what they say with a grain of salt.
Thanks guys. I missed it I guess. I am trying to find out why, if eurodollar is the same as a US dollar, why is GE1 so much stronger than DXY? Is GE1 the real value of the dollar?
The deflation call didn't age well
CPI doesn't equal monetary inflation
Brent nailed it
Isn’t the imf and the sdr a way to be a lender of last resort? Thanks
Funny watching an old video with a clean shaven Jeff lol
It sounds like the EuroDollar system has to respond to shortages in dollars/reserves by calling loans and allowing for an autocorrection. I suppose since it’s all linked it could lead to a collapse of at least that monetary/financial system.
sounds like a great source of credit for crypto-trading, or any form of speculative lending and trading.
Very cool
@15:00 eurodollar & petrodollar
Not sure I get the problem with eurodollar shortage . It's basically the same issue as local dollars?
The amount of money is shrinking so it's more difficult to service the debts?
Why would US subsidiary banks overseas borrow Eurodollars and then send them back to the US? Can they borrow dollars cheaper overseas than they can in the US? Why would that make sense if dollars are in such a shortage overseas? If there's a shortage, wouldn't the interest rates there be higher?
I don’t understand Jeff's explanation around 23:00. If the Swiss central bank received an influx of dollars, they had to maintain their peg to gold and back the dollars with "US" gold. How is gold "US" gold versus any other kind of gold? Isn't gold, gold?
Then he says that they swapped these dollars back to euro dollars, allowing the US to keep their gold. How are eurodollars maintained separately from regular USD outside of the US? Isn't a dollar a dollar, regardless of where it gets generated? It would be helpful if they could explain these basic mechanisms in order for me to understand the whole picture.
It sounds like there was never any gold backing the Eurodollars, even before the US went off the gold std in 1971. As a result, no peg to gold was needed. Maybe this is part of the answer?
Banks create money when the give out loans. The reserves are backed by the fed. The banks outside of US are making loans in dollars their reserve s are not backed up by the fed . When we have recession and these loans go bad these banks get into trouble. This system is huge and unregulated.
@@charlesputnam9370 , I understand now. The answer is that USD outside the US does not need to meet any reserve requirements, even if the banks that hold the USD are subsidiaries of US banks. Damn, that seems so crazy. It's like offshoring money is a way to avoid regulation.
@@lisalph8922 That's the point, the dolar was not gold backed much before 1971
After 2008..
We saw anonymous companies based out of belgium creating a demand for US treassury bills..
Some said that these companes were overseen by the monitaty comitee..to artifocially create a demand for treasury bills..
The credotncreated was then exporter probably into the eurondollar market that was used in the yen carrytrade...and drove the markets in china and india...
Anothr point is that most of the crappy secerities bought by th e fed in exchange for dollars bank liabilities..say for goldman sachs ..went to pay insirance parties like Aig. In london ...
So dollar was exported there as well..
This external dollar expansion ..was also droven by subsequent Fed programs..but i beleove they sold treasury bills to intetnational banks who lent it out to hedge funds in exchange for company bonds created by securtisation of consumption ..u could see that in india with the rise of zero interest emi payment programs ..the consumer account recevables where packaged and securitised ...and sold to hedge funds...
I am confused on how the 2008 market melt down was caused by the euro dollar system ? Can somebody enlighten me please ?
Dollar scarcity lead by an expansion of claims on dollars
I think I understand. Overseas banks that have US dollars are using them as reserves to make loans in dollars. Thus they are creating dollars. Their reserve s are not backed up by the fed. If the economy goes down and their loans go bad they get into trouble. US banks have federal reserve to keep them solvent.
It wasn’t.
@@charlesputnam9370 interesting. I did not know that overseas bank could make dollar loans by having dollar reserves.
@@RohitKumarForever That why I listen to Emile and Jeff learn new stuff all the time. You can Google information about Eurodollar market. I took economic s in college a long time ago and did not know about it till I started listening to this podcast. Sometimes the algorithm gods send you something interesting.
Jeff is so intelligent
Why do we need a reference currency?
Dumb question; do eurodollars transact in the swift system?
interesting that the "dollar shortage event" that these folks say caused the gfc, occurred after the US clinton govt ran surpluses. And what does a govt surplus do - takes dollars out of circulation! I would think this is something to track - if the US govt deficit starts to move closer to zero (e.g. delayed/reduced stimulus bills). This is one way that banks can reduce credit growth without causing a crash - the US deficit needs to expand to fill the gap left by credit shrinking
48:17 this looks about a year-and-a-half old. Looks like you were wrong about central banks not buying gold. Looks like you never saw bilateral deals in individual currencies, Brazil and China, Iran and Russia. BRICS+ going commodities-backed (digital) currencies.
44:40 Euro$ results in $death spiral upwards
So where did those eurodollars go?
I disagree that the FED or Treasury Dollars (money). Banks create dollars(money) through loan creation. US dollar creation is essentially privitizied.
Eurodollars is definitely the most misunderstood market!!!!
Like their extreme mindset with the higher USD in the long term.
why was there so much demand for dollars in 2008?
I think it is because the banks stopped lending to each others during the crisis due to loss of confidence in the US house market, which had become a de facto global collateral. No lending between banks means no creation of Eurodollars. That shortage spread everywhere, compounded by the fractional reserve system.
Fucking superb. Now that it is a few years later and I can put my hindsight glasses on, the only thing I can pick on Jeff about is that we did end up seeing significant and lasting inflation.
price increases, not in-FLATIOn. Words have meanings and inflation ONLY means an increase of prices directly caused by the inflation of the monetary base. This is why it is called inflation. When your government does everything to make a product more expensive than this is not inflation. It is simply stuff getting more expensive by dictate. If men made crisis (Covid Shutdowns, Ukraine War, China Conflict, Trucker Protests, Labor Shortage) decrease the supply of stuff, then prices will increase...still not inflation.
Food shortages by using pcr testing to “determine” bird flu and intentionally destructive policies like CA letting enough water to serve a million people for a year to drain out to sea will do that. Why? To give 1,000 salmon a chance. Then, the drought caused CA to reduce water use for farming to 1/7th of previous amt.
This was sept 2020 before fed tightening the noose, before a war.
Wish I saw this when it came out... Could have ridden this 20% rise in DXY haha
I love watching Brent in his little SF basement
I think he lives in PR now
Selling of US Treasury by foreign banks is a great signal go track for dollar shortage. Any good source for it?
FX markets?
TIC data
Good conversation, but way too many ads. Like every 7 minutes there is an ad.....
So anyone saving/holding/hoarding US dollar is going to win big?
Good discussion.
I don't understand if Euro dollar market is so huge why is it not talked about or better understand.
Look out your window --- A country's natural resources are its wealth -- a currency is just a ruler that measures that wealth.
Another great college course...3 credit class...how much is each credit?
10:20 :: Enter the IMF and Ripple, with the XRP ledger which shall recapitalize the system.
Amazing
"Go home Eurodollar you're drunk."
The eurodollar is an unregulated stablecoin.
Would Bitcoin fix this problem??
really hard ot understand
Jeff is on a completely different level. Brent is throwing out ideas and Jeff has to ABC/educate him on how things have and continue to work.
Is the IMF $650 Billion of SDR intended to sure up global confidence and provide liquidity targeted at developing countries who trade in dollars within this Eurodollar system?
That’s like going to the hospital with $100 and asking for heart surgery and saying keep the change
@@juanok2775 so when they say the eurodollar will collapse
Do they mean that eurodollar futures price will go to near 0??
@@FirstLast-tx3yj no, they mean is gonna collapse due to the lack of eurodollars. You can see the DXY now that's partly one signal, there aren't enough eurodollars to cover all debt.
@@juanok2775 what are the possible ways to trade this?
I know its not financial advice but please some guidance
I get the part where usd will be stronger but how will it affect the eurodollar futures?
Please some info i just want to know how to trade this
@@FirstLast-tx3yj it is very hard to do short term trade because this are long duration events. Normally the bonds like TLT that are crashing go up very fast but this could take 6 months or more.
18:30
If the Eurodollar system collapse was the start of the GFC ~2008, which foreign bank(s) went bankrupt around that time due to defaults on bad loans that were denominated in USD? This would have had to have happened in order to start the domino effect but I only hear of US banks and AIG having been the ones who started the collapse. I never hear of any other banks outside the US that went belly up prior to the ones in the US.
How to hedge against the euro dollar collapse? Its 99 and dipping at the moment to about 96
So it will tank to near 0??
THANXXX A LOT!
Jeff’s is a smart man but his TLT/TMF play around this time cost him 50-80%
The last growth was 2007-09-07, so not August as the man says, but anyway, extremely useful video, thanks
Can bitcoin become the standard of the eurodollar system?
I heard that the imf is considering something like that with sdr.
20 minutes in and I have already been spammed with a 3rd round of adverts.
Why is YT spamming this video ?
Is this a prohibitive and dangerous topic ?
Any on-shore off-shore bank connected to SWIFT can create fiat US currency out of thin air .... Thus, any government in the world can step in inside their jurisdiction and lower the commercial bank's reserve requirements to ZERO to create a infinite amount of fiat U.S. dollars out of thin air and thus, any government can bail itself out by printing USD fiat currency out of thin air ..... EURODOLLAR system! We are all rich as long as your country's bank system is not disconnected from SWIFT.... So there are no U.S. dollars... what we have right now, is FIAT WORLD SWIFT DOLLARS.... So ... say a small country (Barbados in the Caribbean) is bankrupt, like most of the countries, well, they can use SWIFT to create more U.S. dollars to keep the lights on ... Barbados can come up with some government issued BONDs that are worth USD $1 trillion because Barbados Island is worth USD $1trillion and use it as collateral to print more USD into existence via First Caribbean International Bank (a commercial bank) and the international SWIFT banking system... and those freshly minted USD $1 trillion are as legit as FED created USD out of thin air... and all international banks connected to SWIFT can not do anything about it ... the isle of Barbados is now 1 TRILLION USD richer! ... Saludos de Costa Rica!
in other words, eurodollar is just like tether....
and eurodollar being destroyed is just like an altcoin/stablecoin being burned
jeffrey snider always predicts deflation. And he is right and wrong at the same time. He is right because the eurodollar system has always a shortage for dollars. And in a fractionary reserve system with a big leverage the need for dollars outside the US is really big. But when something breaks in the eurodollar system causing a deflationary shok the Fed prints a lot of money (in QE) to suply this need for dollars outside the US. However the dollars created by QE dosen't flow into the eurodollar system because the comercial banks do not land this money to the public or even for foreing banks. At the same time the IOER over the excess money in the balance sheet of the banks create more money that can be used for the comercial banks for buyng more treasuries or even be used to create more loans on the US. So you have this situation where you have a lot of liquidity in US banks and a scarcity of liquidity in foreing banks what creates a inflationary tendency in the US and a deflationary tendency outside the US. And each time where the eurodollar system has a deflationary shok the response of the fed dosent resolve the problem because the liquidity that he creat doesnt flow quickly into the system because comercial banks in the US will not land this money (they are already worried about their own risk assets)
Right now the world has 1.2 quadrillion in derivatives. If the colateral of this derivatives evaporate we will see all the dollars in the world be sucked by this leverage contracts. So the solution will be the Fed creat quadrilions of dollars to suply this risk asssets? it's insane. And even the Fed do that and create quadrilions of dollars to suply a massive deflationary shok outside the US the comercial banks in the US will not loan this money to the real economy in the US or outside the US (because in the first moment this huge impression of money will cause a massive inflation in the US if comercial banks give this money to the public. And even if he didnt give this money and the money stay in the balance sheet of the comercial banks in the US the money will be automatically created by the IOER fee)
Very insightful comment.
Definition of Euro Dollar. I take a Dollar I put it into France and I have a Euro Dollar! I take a Black Man I put him into Russia and I have a Black Russian!
I agree with the following: "All war and natgas shortage already priced in, and waaay too much. It's just a commodity with a price, if it's too expensive, and if industry cannot switch fast, no problem for people however, electric heaters cost double each month with minimal initial investment, like 100Euro or so, so instead of 360Euro per winter, it can be 700E in total for the entire next winter, and you should compare with 360 not with zero. Only the difference is what matters. As a percent of GDP/capita is not even 1% and it was priced in like 40% or so. Moreover is not like Europe doesn't have gas at all, or even less than other places, but it was not worth doing even prospects due to razor blade thin profits. Bill Gates would not drill in his backyard, so further you go east in Europe there is more gas because there are less Bill Gates per square km. So yeah, they will be affected like 2-3% in total, but not 30-40-50%. Except for food (for which Eu is a net exporter) the raw materials price out of a finite product price is something btw. 1-10%, depending on amount of processing and added value. So with 50% increase in raw material price, the final product gets hit by 0.5% to 5% -and that's globally, not only EU. But speaking about competitive advantage we can only consider the differences, so if E.g.: get 20% more expensive in EU than other places, this means even less: 0.2% to 2%. I wouldn't say Germany and Europe lost their competitive advantage, the operational margins except energy, mining, etc, are well above 10%. Who says the competitive advantage of European products (think Mercedes, BMW, French perfumes, etc), stood in 0.2%-2% price difference doesn't know what he's talking about. Since the great deflation of 2008 both US and Eu started to lower interest rates to stimulate credit, but this doesn't mean people borrow if they are still scared. So it's the ECB and Fed where all borrowed money and spent appear on screen and their balance sheet. Only in 24Feb 2022 the EU inflation rose from negative of 2009 to 2%, in US & UK this happened in mid 2018. Asset prices recovered top 2007 prices even earlier in US & UK in 2017. In contrast in EU, they never reached 80%, even today, even though after a much lower initial increase. All the Central & Eastern EU growth (due to abrupt increase in productivity -from lack of previous investments, was not matched nearly by consumption & credit. You can decrease ECB rates to -10%, if people don't go borrow from banks no money gets created. If in the meantime productivity increases due to lack of previous investments (from simple things like a tractor instead of physical labor -the increase can be like 100x, much more than from very modern tech, like an iPhone replacing a fixed phone) you are still in a deflationary environment -even with that -10% ECB rate. But the same thing happened with USD -due to the rest of the world, not the US, so there is no inflation for USD actually, neither for Euro, possibly for GBP and Yen as their excess turn into inflation much faster -much smaller and super-developed economies with less room for productivity increases."
I think anybody who believes in $100,000 BTC is an idiot. BTC will probably peek at $24,000 by the end of the year due to inflation. The price on everything is skyrocketing. Nearly doubled over the last six months. The problem is there were never altcoins in the past. So bitcoin didn't have a competitor or any competition. Now with competition I would much rather put my money into a Altcoin instead of Bitcoin. I think Chain-link is a perfect example up 1000% this year. I would much rather buy 800 chain-link, then 1 BTC.
I am really new to this and not very good comprehending. i found myself along at 55 without any education. i need to make the most of my money and pretty reliable income. any ideas for me
El mejor 👏👏👏👏 excelente!!
@@felixjoe8574
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@@felixjoe8574
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@@joshjeff595
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euro petro dollar
This is sooo incorrect. You can tell none of them have worked for an international bank.
🤯🤩
OK, is it time to TRY to get an estimate of the total world $ supply? No?
Better not to know, huh? Ignorance is bliss, huh? Till the unknown totally bites us in the ass.
Maybe this "$ shortage" is currently being alleviated by tethered "stable-coins" and DeFi in the cryptocurrency space?
There you go - Crypto (one in particular) saves us (in too many ways to list here).
Try looking up global money supply on Visual Capitalist- truly eye opening for me, especially the supply of derivatives, for which there is no accurate count, and is estimated at potentially over one quadrillion dollars. My best guess is that much of those derivatives are eurodollar futures, swaps and spreads held by foreign banks.
@@steventokeshi8847 Absolutely. The amount of money-like, financialized stuff out there is mind-boggling. So much so that those who own most of this stuff have lost all concept of value. The value of money is kept by those who don't have much of it - which is why those folks must constantly get squeezed, and are deemed "essential workers" (like slaughterhouse workers). These folks always have a "$-shortage" - They serve to keep money dear (if not exactly valuable). Real money is dear, in-and-of itself, for everyone - Gold, and especially Bitcoin, come to mind.
OlympusDAO
Lol look at Jeff he's just a baby.
The debt starr
Gave you a thumbs down because of the amount of ads.
Every few minute ads are annoying and it makes your video very unwatchable
How many times are you going to say "uhhh" like seriously???
Holy crap, Jeff! You looked much more respectable three years ago 😂
bitcoin
You have NO idea what you are talking about 😉