201804.16 12

Some First Principles Of A ‘Dollar Short’

On Friday I wrote: Again, the size of your reserves reflects, and is proportional to, your potential need for funding. You can’t accumulate that many unless you have a similarly arrayed “dollar short.” The bigger the stockpile the more potential for it to get out of hand if things go the wrong way (usually on…

201802.20
1
5

What The Petroyuan Is Not

In mainstream monetary convention, bank reserves are at the center of the monetary pyramid. They are the byproduct of any central bank policy which requires direct action. In the US system, they had been absent, however, until around 2008. The reason was the Federal Reserve’s belief that it didn’t require any change in the corresponding…

201504.16 0

Direct Evidence for the Supercycle

When categorizing intuition about the real economy, it is often regarded as a combination of both structural and now cyclical problems. There was, as yet, no true recovery owing largely to factors that continue to linger beyond historical comparisons about what “should” have occurred in and after the Great Recession. Some economists refer to deleveraging…

201503.31
6
0

Bernanke Part 2; Inescapable Inequalities

It’s mostly accepted that what a central bank does is no more inconsistent with capitalism than what you and I do on a regular basis. There are various reasons for this self-inclusion which should be disqualified based on common sense alone, but monetary theory is, by intent, impenetrable beyond the few indoctrinated in its ritual…

201409.25
2
0

The Dollar Short, Golden Bell

The purpose of this exercise of examination of global funding mechanisms is to put together means for inference about the state of dollar funding as it relates to the systemic short (Part 1 here; Part 2 here). There is no direct path for observation; that is why nobody can figure out how big it is…

201409.24
4
1

The Dollar Short, What and Where Now?

The first part of this examination can be found here. At first, the rebound off the 2009 low looked as if there would be no lasting changes or damage to the eurodollar system, but subsequent events have shown that there is more than a little lingering dysfunction that does not sway or erase with central…

201409.24
6
1

The Dollar Short, Hopefully Not A Day Late

I get so caught up in the minutiae of esoteric function or financial plumbing that it is worthwhile to take a step or two backward and review the financial system from a bit more afar. The repo market’s strain recently and even the idea of liquidity itself are actually features (or symptoms) of the “dollar.”…

201408.27
2
0

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…