201804.23
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The (Official) World Moves A Little Closer To The Eurodollar

The primary reason I focus so much on time is that I believe it is running out. No one possesses a crystal ball, least of all me, and while making such a statement might presume to be intensely negative (doom and gloom) it’s not always that way and it certainly doesn’t have to be. For…

201804.20
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Renewed ‘Reflation’ From A Short-term Dollar Perspective

It’s worth revisiting the topic of the “rising dollar.” What determines its exchange value in the first place? Orthodox convention associates the general direction up or down with interest rate differentials, the infamous global carry trade. Not just any interest rate comps, either, but those of short-term money markets. Thus, if the Federal Reserve is…

201804.18 7

Can We Blame Japan For The Liquidations (and HKD)? Right Now It Sure Seems That Way

February was a very interesting month, wasn’t it? There was the pause or even end of the inflation hysteria driven home by “unexpected” liquidations in markets all over the world. On top of those, LIBOR-OIS blew out and all the absurd explanations put forth for it, and even outright lies. Needless to say (write), I’ve…

201804.13 10

Hong Kong, China, And The Nightmare of Forex Piles

Very early on in the turn, I mean very early, you could already tell there were substantial problems underneath. By the time CNY started lower, against all expectations, there had already been serious signs of trouble in China for months by then. In that initial seemingly minor drop in early 2014, the PBOC’s actions belied a…

201706.13
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The ‘Dollar’ Devil Shows Itself Again In China

Some economic and financial conditions leave a yield curve as a more complex affair. Then there are others that are incredibly simple. The UST yield curve is the former, while right now the Chinese Treasury curve is the latter. Even still, the media manages to make it something it isn’t because the world from its…

201605.10
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Disturbed in Japan

Japanese officials including those at the Bank of Japan have been acting very erratic of late, eschewing the more traditional financial setting of vagueness. First it was NIRP that immediately blew up in their face, leading to very loud rumors of additional bank “stimulus” to offset NIRP only to have the BoJ instead do nothing…

201409.30
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Old Mother Dollar (Liquidity)

The pestilence of the wholesale “money” system, the eurodollar standard if you will, is that the “dollar” is no longer anything like one and that these “markets” for it are not directly observable. That leaves observers and interested parties to gloss and gleam related second or third hand accounts, hopefully piecing together the right parts…

201408.27
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Attending the Exits, Part 2

There are several misconceptions about the US$ as the world’s reserve currency, including the use of the hegemony qualifier. Part of that stems from a very persistent lack of understanding about what actually took the place of the gold exchange standard after Bretton Woods (which itself is misunderstood as it replaced other forms of exchange…