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Unca Walt said:
Jeez. The Brits are screwed.

Jeeves Six-pack just about to retire. Has big mortgage. Retirement dividends will not cover half his new expenses re: home heating this winter, food, auto payments and gas, etc.

No prob: Them retirement dividends won't show up now, either.

Brings it to a whole 'nother level, donnit? We could be there very, very soon also.
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Ummm ya... someone want to break the bad news to Unca? We are like ... maybe 3 months behind.
 
pmbug said:
Huge move in the dollar index seems to be affecting most markets right now. What's happening?
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IMO we don't see what is driving the USD... basically it is about the Euro Dollar (US) market. The USD outside the USA has been lent out on a fractional reserve basis meaning that there are now way more external USD obligations than there are USD outside the USA to pay for them. When we get stress people need USD to clear that obligation. The higher the USD goes the hard it is, the more stress, the more buying. This has nothing to do with rates and everything to do with USD debtors with their nuts in an ever brightening vice!

Hence we can only know after the fact if they blow up over not getting the USD to repay obligations. I don't think we are in that phase yet, maybe close.

JMO etc

2c worth.
 
Zed said:
IMO we don't see what is driving the USD... basically it is about the Euro Dollar (US) market. The USD outside the USA has been lent out on a fractional reserve basis meaning that there are now way more external USD obligations than there are USD outside the USA to pay for them. When we get stress people need USD to clear that obligation. The higher the USD goes the hard it is, the more stress, the more buying. This has nothing to do with rates and everything to do with USD debtors with their nuts in an ever brightening vice!

Hence we can only know after the fact if they blow up over not getting the USD to repay obligations. I don't think we are in that phase yet, maybe close.

JMO etc

2c worth.
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To that end the FED just sent the Swiss central bank $3 Billion overnight. Lots of these loans have nothing to do with the US but for some God-forsaken moronic reason both parties decide to use the US Dollar.
 
Voodoo said:
To that end the FED just sent the Swiss central bank $3 Billion overnight. Lots of these loans have nothing to do with the US but for some God-forsaken moronic reason both parties decide to use the US Dollar.
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...because the source of the original loan is the USA, the 'stable' reserve. All well and good when the USD is falling over time in a stable dynamic. Something goes wrong and its crunch time for the periphery.
 
Zed said:
...because the source of the original loan is the USA, the 'stable' reserve. All well and good when the USD is falling over time in a stable dynamic. Something goes wrong and its crunch time for the periphery.
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But the source of the loan can't really be the USA. Say that someone in Switzerland gets a loan from HSBC. Neither party has anything to do with the US but they decide to denominate the loan in USD. More of these would be corporate or fancier lending but still. Banks have the capital so why denominate in USD?
 
Voodoo said:
But the source of the loan can't really be the USA.
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Of course it can! There are more USD circulating outside the US than inside! That is a part of the exorbitant privilege of being the worlds reserve. You get to create USD, export it in return for goods and never suffer domestic inflation.
 
Voodoo said:
But the source of the loan can't really be the USA. Say that someone in Switzerland gets a loan from HSBC. Neither party has anything to do with the US but they decide to denominate the loan in USD. More of these would be corporate or fancier lending but still. Banks have the capital so why denominate in USD?
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Think of it this way, if they could just 'magic up' USD then the USD would never need to be bought and would not rise in value. This is not about money fleeing to US bond markets now is it?
 
But this wasn't your kindly, ole grandpa Biden politely asking Riyadh for a favor: instead, in US officials unleashed full-blown threat mode and warned Saudi leaders that "a cut would be viewed as a clear choice by Riyadh to side with Russia in the Ukraine war and that the move would weaken already-waning support in Washington for the kingdom."
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Saudi Arabia Defied Biden's Threats Ahead Of OPEC+ Production Cut | ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero
www.zerohedge.com www.zerohedge.com

BRIC's currency anyone?
 
Zed said:
Think of it this way, if they could just 'magic up' USD then the USD would never need to be bought and would not rise in value. This is not about money fleeing to US bond markets now is it?
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The Dollars Never really even existed UNTIL they are needed to pay back the loan. I'm not exactly sure how they create the opening transaction but the money did not exist. Otherwise, why would they need to BUY Dollars now? They need them now to pay back the debts. All these make believe loans created USD out of nothing. And when the debt pyramid starts to collapse now they need the real things, that don't exist.
 
Zed said:
Petrodollar demise?

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Yes, of course. So we are getting Zero Russian oil, less Mideast oil, less Canadian oil, and less US oil. This is deliberately shutting down oil. Those lines and events in France are just the start. Or they just want to pretend oil grows on trees and the FED can print some when needed.
 
Voodoo said:
The Dollars Never really even existed UNTIL they are needed to pay back the loan. I'm not exactly sure how they create the opening transaction but the money did not exist.
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It does at the time of the loan, then it becomes an liability on a balance sheet as it is loaned out and circulated. Fractional reserve banking, which is how liabilities end up exceeding USD supply.

Voodoo said:
Otherwise, why would they need to BUY Dollars now? They need them now to pay back the debts.
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Which is exactly why the USD is being bid up. Relative shortage.

Voodoo said:
All these make believe loans created USD out of nothing. And when the debt pyramid starts to collapse now they need the real things, that don't exist.
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No, they where leveraged off the currency base exported from the US in return for goods.
 
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Silver, $21 is the line in the sand! Fireworks above? Looking for a higher low, $18.30 or more. Right around here would be good.

SI1!_2022-10-12_13-15-04.png
 
One of those annoying diagonal lines suggests. We need to close above 18.85 tomorrow.

SI1!_2022-10-12_13-16-41.png
 
DXY looks like it is rolling over in anticipation of a pivot (pause?!)... Momentum waning, rolling over a little below recent highs.

DXY_2022-10-12_13-37-56.png
 
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