Ummm ya... someone want to break the bad news to Unca? We are like ... maybe 3 months behind.
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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.
Huge move in the dollar index seems to be affecting most markets right now. What's happening?
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.
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.
...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.
But the source of the loan can't really be the USA.
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?
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."
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?
Petrodollar demise?
So stupid it has to be an intentional act of vandalism.
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.
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