How the US Dollar Shortage is Driving Global Instability with Jeff Snider
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SHOW DESCRIPTION
Jeff Snider is co-host of the Eurodollar University podcast and Head of Global Research at Atlas Financial Advisors. In this interview, we discuss the crazy possibility that nobody knows what money is, and as a result, nobody knows how to run or fix the economy. Central banks and governments are essentially engaged in a high-risk game of pretend.
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Every year around 800 million containers (categorised as Twenty-foot Equivalent Units, TEUs) are handled by ports every year. This represents around 80% of official global trade. Harvard has produced an incredible visualization of total global trade. They have populated the globe with the origin of exports of every type of product. Each tiny dot represents $100 million of exports. The globe is covered in a mass of tiny dots.
This complex, interconnected and shadowy web of global trade, where final products, intermediate inputs and raw materials are exchanged on a massive scale, represents about 50-60% of global GDP. The rest is made up of all kinds of activities, business investment, personal consumption and government expenditure.
The IMF predicts that the combined GDP of the world economies will exceed $100 trillion by the end of 2022. However, this is dwarfed by global wealth, which is estimated to be over $1,500 trillion. To put these numbers into context, US debt is currently estimated to be over $31 trillion, whilst global debt is reckoned to be over $300 trillion. Global finance, which helps manage and fuel global trade and debt, is expected to be valued at $25 trillion this year.
These are obvious gigantic numbers. Yet, these figures aren’t the thing that should give you pause for thought. What should stop you in your tracks is that nobody really understands the workings of this complex system, let alone is in control of the resultant global economy.
Most of the global trade is conducted in Eurodollars, which is money generated outside of any control of the US or the nexus of other countries' Central Banking/Government institutional structures. Eurodollars are not understood by the major actors involved in oversight or management roles affecting global economics. That is why nobody knows how to fix the issues with the global economy. It’s because nobody knows what money actually is.
TIMESTAMPS
00:02:38: Introductions
00:03:44: The complex nature and instability of money
00:09:19: Nobody knows what money is
00:15:01: Gold standard, 1971 and the eurodollar
00:19:08: The shortage of US dollars
00:34:21: Global implications from the lack of dollars
00:44:58: Possible solutions to end the dollar shortage
00:48:04: All bank money is just book entries
00:52:01: Instability impedes economic growth
01:02:57: The Fed doesn't know how to do its job, and the end of central banks
01:06:50: Recessionary signals and the need for a great reset
01:17:57: Transitioning to Bitcoin, and the need to financialise it
01:23:15: The need for the Fed to drop interest rates
01:27:52: Final comments
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SHOW NOTES
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Mentioned in the interview:
Just How Big Is The Everything Bubble? - Dylan LeClair and Sam Rule, Bitcoin Magazine, Aug 11th 2022
Bernanke Won the Nobel, but Is His Bubble About to Burst? - Foreign Policy, Oct 13th 2022
Aug. 9, 2007: The Day the Mortgage Crisis Went Global - The Wall Street Journal, Aug 2017
Bear Stearns: Its Collapse and Bailout - The Balance, Oct 2021
China has now spent $1 trillion defending its currency - Quartz, Feb 2017
Credit Suisse reassures investors over its financial strength - FT, Oct 3rd 2022
The UK’s Crisis Is Threatening the Global Inflation Fight - Bloomberg, Oct 14th 2022
The General Theory of Employment, Interest and Money [John Maynard Keynes] - Wikipedia
German 10-year/30-year yield curve inverts - Yahoo Finance, Sep 15th 2022
Housing slowdown warning after mortgage rates rise - BBC, Oct, 13th 2022
FedEx's bleak warning could reflect global economy - CNBC, Sep 21st 2022
Four steps that the Bank of England could take to repair the gilt market - FT, Oct 12th 2022
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WBD565: Europe in Crisis with Lyn Alden
WBD542: Fractional Reserve, Base Money & Bitcoin with Matthew Mežinskis
WBD528: Everything You Know About the Economy is Wrong with Jeff Snider
WBD449: Chaos in the Bond Market with Greg Foss & Lawrence Lepard
WBD445: Do We Really Understand Inflation? with Cullen Roche