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Discussion Thread - Jeffrey Snider Episode 50

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1 year 5 months ago #1 by PatrickCeresna
Discussion Thread - Jeffrey Snider Episode 50 was created by PatrickCeresna
Jeffrey does a great job explaining the complex world of money markets. It is always important to remember that the world is intertwined in a global U.S. dollar system and that American monetary policy has a global effect. With Jeff debunking the reflation trade and suggesting the rate hikes will be limited, it will be very interesting if this manifests itself in 2017. Comments?
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1 year 5 months ago #2 by EmilKalinowski
Replied by EmilKalinowski on topic Discussion Thread - Jeffrey Snider Episode 50
Thank you, thank you for bringing Jeffrey P. Snider back again. The man is a fountain of knowledge on the US Dollar, modern money and economic statistics. His blog posts have been invaluable to me in understanding modern money and why central bank policies are not working. He's fighting the heroic fight and sharing his institutional-level knowledge and quality writing with us plebes for free on the web. What a service! Thank you again MacroVoices for bringing to us such an important topic and speaker who remains underappreciated to this day.

(This week's research roundup was excellent too. Thank you.)

I hope the podcast continues to be successful and meaningful to you all, we get a great benefit from it and though we don't always let you know it we appreciate it.

Thank you.
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1 year 5 months ago #3 by CP
Great Podcast! Thank you..

Would it be possible in the future to see the Eurodollar absorbed into some form of global currency or SDR like concept, and have the "onshore" $usd become decoupled so to speak? at some point they've got to get inflation back into the system?

Cheers

CP
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1 year 5 months ago #4 by rgehlmann
Replied by rgehlmann on topic Discussion Thread - Jeffrey Snider Episode 50
I thought this episode was very insightful. I am having a hard time understanding why banks are leaving arbitrage money on the table. I understand that it as a symptom of just how broken the current financial system is, but someone should fill the void. I also believe that the story for the strength in the $ makes more sense from a short squeeze perspective than true belief that Trump will succeed in reflating the US and thereby the World economy. If that is the case, how much will the dollar shortage be compounded with the repatriation of offshore $. There should be $ to be made if this is in fact the case. Short squeeze in UST? Eric often talks about how expensive stocks are, but under this narrative, the financial system will be supported by FED for the foreseeable future and there is no reason to not buy any dip in stocks.

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1 year 4 months ago #5 by Roberto
Replied by Roberto on topic Discussion Thread - Jeffrey Snider Episode 50
Page 7 transcript: "So, the rising dollar to me is not about economic strength at all. It's about the fragility in the … global Eurodollar system..."

I strongly disagree, the rising dollar is all about relative US-EZ real economic strength:
1. US monetary policy diverged with EZ MP especially from Jun 14 as the Fed hawkishly adhered to the QE3 timetable of its termination. This was all driven by US economic strength which comforted the Fed as its employment mandate was being fulfilled. The latter parts of the Jun14-Mar15 rally in DXY was driven by the ECB announcement in Dec14 of their first QE round. They also did this for economic (weakness) reasons.
2. US twin deficits were sharply contracting from 2009 through 2014 and are still contracting. This is always bullish DXY, other things being equal.
3. The relative economic real growth rate of US-EZ as represented by Markit Manufacturing PMIs or OECD CLIs was increasing through 2014. This is now pointing to a DXY top however. But again this won’t be caused by a so called dollar shortage but by this relative growth slowdown.

There have been major regulatory changes in banking, largely to reduce the size of the derivatives market. This has driven much of what Jeff talks about. 15 pages in this transcript but it was undiscussed. Just this constant mystery and doomsterism. He is as bad as Jim Rickards in that regard.

He even ascribes the slow growth since 2007 to the “decay of the Eurodollar system”. Ridiculous. Again, it was economic: peak worker populations and ratios, a debt supercycle completion, the huge growth in the parasitic financial sector, a huge growth in inequality, the lower capex required by new industrial sectors, the higher cost of oil extraction, etc.

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1 year 4 months ago #6 by d2thdr
Great Interview. Listened to it twice and will listen to it again tonight. Clears the cobwebs from my understanding. Brilliant.

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1 year 4 months ago #7 by bizzrian
Replied by bizzrian on topic Discussion Thread - Jeffrey Snider Episode 50
http://imgur.com/a/Rsjbz

I went back and plotted out the eurodollar yield/2 year yield spread on contracts 21 to 24 months forward (ie EDZ18 currently) . Seems like it aligns nicely with the 2/10 yield curve. Interesting confirmation tool, thanks for opening my eyes to the eurodollar!
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