YouSaid · the spoken record

Jeffrey Snider

lines on the record: 48
first: 2022-06-17
most recent: 2022-06-17
sittings or episodes: 1
sources: podcast

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“There's lots of research on the Eurodala system and the macro and financial consequences of it that they're all over the internet. So it's pretty easy to find. If you are interested in taking my word for it”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“Sure. And what I tell people is that you don't have to take my word for it. Maybe I'm just the guy bringing up the issues and raising these possible questions and connecting some of these dots that maybe have bothered people, like the rising dollar versus all these other kinds of things. But you really don't have to take my word for it. You can just do a little bit of research, a little bit of scholarship, uncover the same things that I have over time. You can see the euro dollar emerge. You can even see central bankers like Alan Greenspan and Ben Bernanke admit that they're not really central bankers and the Fed isn't actually a central bank. They don't like to say these things in public, but the quotes are out there and there are a lot of them. So you don't have to take my word for it. But in case you want to, you can find me, like I said, I do a podcast with my co-host Camille Kalinowski. It's called Eurodollar University. You can find that on YouTube. You can find it at Spotify, iTunes, wherever you get your podcast from. I also publish a lot of stuff on the blogs. I do weekly column at a place called Real Clear Markets. I have a weekly column at the Epicon.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“Said a long time ago, we need animal spirits, we need risk taking. And that's just not going to take place in this malfunctioning currency system until we solve the inelasticity issue. So yeah, I think cryptocurrency digital currencies have potential to solve that issue. They're not anywhere close to there just yet, but potentially if allowed to go further, if governments don't come in and strangle them in the crib, then potentially there's actually a solution there.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, as I said, I think the cryptocurrency and digital currencies in general, and I will lump Bitcoin into that, even though Bitcoin has trended more towards store value than medium exchange. My personal opinion is I don't think Bitcoin is a usable global medium of exchange because you have a fixed finite system or a fixed finite amount which doesn't really work well historically speaking. But that's, you know, overall digital currency, yes. I think they came about as a potential answer. That's really why they proliferated as a potential answer to the inelasticity in the euro dollar system. And I do think the euro dollar has become more and more dysfunctional over time, again, just look at the US dollars exchange value, go up and up and up. It almost goes up, you know, not all at once, not in a straight line, but over the last 15 years, it's only gone in the one direction because more and more malfunction, more and more dysfunctioned within the system, more and more attention only on safety and liquidity when money, real sustainable economic growth, as John Mayner came.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“And it's really difficult to say what is the most likely scenario because in some ways this is unprecedented times, unprecedented problems where we don't really know. I'd like to be more long run optimistic than not, which is eventually we get our stuff together here and really do look at the problem in terms of how it actually is. Stop looking at central banks and governments to try to fix it because they're not going to be able to and start looking at a realistic alternative, maybe digital currencies or something like that. I'd like to believe that we get to that scenario before something like 2008 happens again.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“Number one question I get all the time too is how does this all end? And I think the human mind we immediately go to while the system just crashes and we have to reset from there, when the euro dollar itself provides us with another example because the euro dollar system took over from a grossly malfunctioning system. Hardly anybody knew it did. In fact, it did its job so well. We transitioned from the 1960s in Trippin's paradox to the great inflation of the 1970s, which today people still understand what the hell happened in the 1970s either.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“Necessarily the case. In fact, I know it's not the case that there's an oversupply of money propping up markets, there's an undersupply of assets because of that same problem. We have a global monetary liquidity problem that is forcing essentially the system to restrain itself in sort of a self-reinforcing spiral. And there's really no way out of, at least no way under the current framework where the Fed's not going to solve it. It's not going to solve itself. I mean, it's been 15 years. It's not going to just randomly fix itself one day or the other. And so you have this volatile system where we all run into one class or another over time based on mistaken identity, based on mistaken impressions. Or as you said, Trey, based on nothing more than the placebo effect.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“You have the placebo effect of markets, as I said, but you also have, again, small economics too, especially in real estate in the United States. We haven't been building houses. We haven't been building enough apartments. So wealthy people who tend to be more liquid have been piling into assets based on the placebo effect, including cryptocurrencies, including digital currencies, as well as real estate, even though there's nowhere near as much real estate being built, especially on a population adjusted basis as there was in the 1990s, for example. Again, you have the demand curve shift to the right supply in elastic. prices have to adjust. As you said, there's an asset short, there's a liquid asset shortage that has spilled over into things like real estate. It's no different than collateral and safe and liquid assets because in a safe and liquid environment, those are the things that are in demand. Those are the assets that are in demand. What we don't see is all the illiquid assets that don't get markets anymore, that don't get priced, that don't get the same sort of considerations that liquid markets do. So I think it's not enough.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“are taking the placebo and running with it and running wild with the cryptocurrency prices, which is sort of not what's going on in actual, the development, the technology and innovation in the crypto space. So you have one thing that's sort of a long-run trend where digital currencies are trying to solve elasticity in the medium of exchange where investors and speculators are running into cryptocurrency on the other side because they wrongly conclude that crypto is about store value when it's really not. So long run, I think there's value there. Long run, there's potential there, even though the prices have been extremely volatile and wild. And I think that, you know, current prices in crypto are way overvalued because we don't really know what that elasticity solution might look like when we get to the long run.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“Which to me is really what's going on in cryptocurrency and digital currencies and DeFi and everything else has nothing to do with store of value. It's all about medium of exchange and elasticity. So if the general thesis and the general condition in the monetary system, and I think I'm right about this, in fact, I'm really sure I'm right about this, since 2007 is we have a shortage of money. We have an inelastic currency system. Historically speaking, whenever you have an inelastic currency system that doesn't supply the money that the economy needs to grow and be efficient, competing currencies will evolve because human beings are ingenious. And digital currencies in their underlying basic fundamental capacities are ways to solve this any elasticity medium of exchange and have nothing to do with store value. So you have these competing tensions where digital currencies are evolving toward a medium of exchange that's useful in parallel or in competition to the euro dollar system, but invest”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“Sure, we're telling you it's going to crash. Just wait and see. But then it doesn't. The dollar starts to level off and continue higher. Then, of course, later in 2021, especially in 2022, the dollar starts to skyrocket. And everybody says, well, wait a minute. We were told the dollar is going to crash. It's not crashing. It's doing something the opposite. Oh, by the way, we just did this a couple years ago. Suddenly not as many people are interested in cryptocurrency anymore. So from my own personal view, a short run cryptocurrency, I think, again, they have the placebo effect in mind. They have this idea the federal government together have devalued the dollar, but you can never square that circle because the dollar never goes down. It only goes up over time. And so you have this influx of interest into crypto and then this outflow of interest into crypto. So short run, you have this massive volatility in price, which is not what you want from a competing or an alternate currency system, which is kind of open the door to other forms of crypto, like Stablecoin.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“I think it's exactly what the narrative that's driving cryptocurrency interest and investment is that. It's the wrong one. It's the idea that the dollar is going down in value. But as we said before, the dollar keeps going up, not down. And so every time we have these periods where the dollar sort of goes down for a little bit, like in 2017, for example, everybody says, okay, this is the dollar crash. Here it comes. And everybody piles into crypto because they've been told you need to protect yourself against the dollar crash, but then 2018, the dollar suddenly goes higher in the middle of 2018 and you think, well, wait a minute, the dollar didn't crash. It's going the other way. We're not seeing an eruption of currency. We're seeing the exact opposite. We're seeing deflationary money break out all over the global economy and everybody piles out of crypto. Repeat in 2020, 2021, everybody, oh, the dollar's going to crash this time for sure. Have you seen what the Fed done? Have you seen what the federal government has been doing and everybody piles into the crypto assets because the dollar's going to crash this time for sure?”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“do what you did yesterday just to do the same amount of stuff that you did yesterday so as the dollar goes up and that signals all of these problems in the euro dollar system funding deficits funding shortfalls increased costs just to maintain the same things that you're doing before that's where you see these correlations as you described Trey that dollar goes up and then all sorts of these other problems that are very real that aren't you know they're not just theoretical or on somebody's piece of paper this is there are actual collateral calls going out we know that because of the price of t-bills for example so we can see these things happening in real time and I think what you just said is really what we're trying to do here because we're talking about a shadow money system that nobody has really been investigated nobody has been monitoring there's certainly no quantitative measures to go in there and say what is how many euro dollars are there because there's no such thing as a euro dollar really what we all we have to go on is the euro dollar system telling us what must be happening in the shadows and that's where we look to these various market prices”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“I think that's an accurate framework, and I think it's just a simplified framework, but it's largely, that is the correlation you'll see. When the dollar goes up, it's like a wrecking ball. It's a wrecking ball for financial markets and financial participants as much as it is for real economy participants that are global trade merchants, for example, that have a difficulty in paying off trade debts when the dollar is going up. And the reason the dollar is going up is because it's much harder to borrow in U.S. dollars, which means it's much harder to maintain the levels of leverage and money and credit that you had beforehand because everybody operates on a short-term lending relationship. And so if you're trying to roll over short-term funding, interbank funding, for example, one day you've got X terms that are reasonable, you think they're great. And then the next day, your dollar counterparty says, I need you to put up more collateral. I need you to put up more margin. I need you to put up something else because I view you as risky. Your exchange value is going down. Whatever happens to be, it becomes that much harder to just.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“Are hanging in there despite the, you know, yes, the bond yields are up over the last couple months, but with the yield curve flattening and everything else, Jordan rates starting to fall. There's tremendous demand for these safe and liquid assets because safety and liquidity is on the minds of everybody participating in the monetary system for reasons of the short run as well as the long run. So part of that long run reason is how do you protect yourself to operate in a deglobalizing fragmenting type of world? I think we'll see more demand for things like U.S. treasuries rather than less because let's face it, uncertainty and unpredictability are a huge part of what is driving demand and safety and liquidity.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“I think that's part of it. And I would agree with that part of it too, because historically speaking, globalization is nothing more. I mean, this is not the first time we've seen the world globalize. And there usually isn't a lasting process. It usually is based on oversupply of money. And you have a wave down and usually the cleanup from it takes as long as the globalization itself. And so it's not unusual to see the world globalize and then something happens and it deglobalizes over time and it essentially devolves into everybody for themselves, which is, I think, what Zoltan is trying to put together is what does this everybody for themselves actually look like in concluding that commodity-based settlement would be one way to deal with everybody for themselves kind of an arrangement. And I think that's probably not the way that's going to go. In fact, I think the system has already evolved, it has already told you that it's continuing to move in the other direction as we discussed the US dollars exchange value continue to just go up rather than down. U.S. Treasury prices.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“Work all that well, especially again in 2013, 2014, 2015, when we had another episode of Dollar Shords that hit China in particular very hard, but also other emerging markets. But it's, you know, he doesn't really factor those things. And what he says is that there's this emerging Bretton Woods 3 consensus where because the Fed has become more and more present in his mind, in his worldview, that these countries around the world won't need to hold liquid U.S. Treasury assets. They can just depend on the Fed's overseas dollar swaps or FEMA, which is FIMA, which is a way to liquidize U.S. Treasury securities that they're holding and all sorts of other programs that the Fed could possibly implement so that they can ditch their U.S. Treasuries and do this global settlement on a commodity-based system, which is the way he sees it. And where I think he's very wrong is that he gets.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“What is Bretton Woods 2? He gets Bretton Woods too wrong. His thing is that Bretton Woods 2 is something that happened in the 2000s or after the 1997-98 Asian financial crisis, which was essentially a regional dollar shortage in the euro-dollar system. So he gets that wrong too, where it basically says that the countries around the world, national systems around the world, basically responded to the Asian financial crisis by deciding, well, to protect ourselves from this dollar shortage outside the US, wink, wink, we need to hold lots of reserve assets so that we have insurance against the type of development in the future. And so he connects that with foreigners holding U.S. treasuries in the same way that, for example, Ben Bernanke did in the middle 2000s when he called it a global savings glut, which was utterly preposterous and ridiculous, but still. So Bretton Woods 2 and Zoltan's view is that foreigners are going to hold lots of U.S. treasuries because they think they need insurance against dollar shortage. It didn't really work all that well in 2008.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“the dollar goes up that's dollar shortage and it has all of these various consequences to all the counterpart currencies around the world so i would say there's no debasement about euro dollar sufficiency or in most cases euro dollar insufficiency”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“To by debasing their own currency, what we're actually saying is there's no debasement at all. It's simply dollar shortage. And for the example, the Chinese Yuan, the Chinese are not debasing their currency whatsoever. In fact, they're doing the exact opposite. They're restraining their R&B because they have a euro dollar problem. They have the People's Bank of China, for example, has the biggest dollar problem on the planet. And it shows. And so what happens is the US dollar exchange value goes up against the Chinese yuan, which crashes. And I think that's why you hear these stories about, you know, the dollar is going to be replaced and this beggar thy neighbor currency war, it never works out that way because you're missing the euro dollar part of it. You're missing the euro dollar story, which is the only story. And again, China is a very good example of this because they're not debasing their currency. They're trying to stabilize their currency. And there's a direct relationship between dollar supply and R&B conditions internally that shows that.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“I think it's the other way around that other currencies are reacting to the shortage in the dollar system. So the euro dollar system comes harder to roll over funding. It becomes much harder to source collateral, participate in repo. You know, it's much harder to redistribute through Japanese banks and currency swaps and things like that. All of the shadow money stuff that becomes very hard to roll over and hard to source. You know, the dollar goes up as my podcast co-host, Emil Kalinowski likes to say, it's the cover charge for participating in this euro dollar system rises when the system itself becomes that much harder to operate. So the US dollar going up obviously has nothing to do with the Fed because the Fed has been quote unquote printing money since 2009 in excess of pretty much every other central bank outside maybe Japan and yet the dollar goes up and up and up again because the cover charge goes up participating in it as the dollar system becomes much harder to continue to operate by the banks operating in it. And so the other side of that is other currencies are falling not because of their central bank's response”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“Going up tells you monetary destruction to oversimplify quite a bit here. But the dollar going up is consistent with global dollar shortage. So you see the Fed doing something when something else in reality is taking place outside the...”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, what you're missing is the euro dollar system because, like you said, like we said before, you think the Fed is printing money, debasing the currency ever since 2009. We've been hearing about how the dollar is going to crash and everything else is going to go along with it. But it never happens. The dollar goes the opposite way and nobody ever says why. The Fed is printing money. The Fed is printing money, but the dollar keeps going higher. The dollar going higher is consistent with the breakdown in the monetary shortage that isn't a one-off. So what it is, you see the feds balance sheet go up. Like I said before, quantitative easing is nothing more than an asset swap. But if all you look at is the Fed's balance sheet, you think money was printed. What you don't see, which is vastly more important, is the monetary destruction that must have been taking place in the shadow money system. So every time the Fed creates bank reserves and quantitative easing, it's in response to this other much larger, much bigger, much more relevant monetary destruction that you don't see. And so the dollar.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“Enough effect to offset what are really these drastic paradigm shifting breakdowns in the monetary system. And obviously policymakers hope and expect that their sentimental offsets or their offsets in sentiment really are enough to overcome the real money deficits that are out there. But you look at the last 15 years and it's conclusively shows no that's not the case.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“you're going to keep at it with the expectations based policy and hope that as you said Trey the placebo effect actually works post crisis when it didn't really work out all that well because again we have a real money problem we have a real breakdown in the bank balance sheet construction globally and there's no way you can fix it with just sentiment there have been pockets of where you can see some kind of relationship between the placebo effect and say for example the stock market the stock market loves the placebo effect the stock market loves you know fund managers and people of financial services industry love to say the fed is printing money buy stocks jay powell's got your back don't worry about a thing just buy shares buy buy buy buy buy because we don't know if it's true or not at least there's a sentimental and psychological reaction from the financial services industry in particular buying stock with whatever the federal reserve is doing so the placebo effect does have an effect in certain places but does it have a powerful”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“Placebo effect. They thought, hey, we did a really good job through the 1990s and 2000s, which is really nothing more than the euro dollar system going forward and taking over the global reserve currency and then going the next step beyond it. It was the euro dollar system and policymakers taking credit for what was going on in the shadows that led everybody to believe this expectations policy could actually work and started to break down. We found out, oh no, this doesn't work at all because you can't have a placebo effect when you have a massive sustained global world spanning monetary real money breakdown in the monetary system. It doesn't do a fairy tales and nice stories and soothing words don't amount to a hill of beans when you have a real issue in the real economy. I mean, but after 2008, what are you going to do? Are you going to admit that you've been doing this expectations-based policy, which is really kind of just, you know, fairy tales for decades? No.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“Well, I mean, certainly there's a reason why central banks have undertaken this expectations-based policy because they think this might work, right? It might be effective. And, you know, if you use the look back period, quantify the potential effect, as you described, placebo effect is a perfect description here. If you want to quantify the placebo effect of monetary policy that has no money in it going back to the 1980s, you're going to use the great moderation. So it's going to look like this works really well. Alan Greenspan, the maestro. He was a genius. All he had to do was move the federal funds rate at a quarter point here or there and it produced this massive wave of global globalization, global trade, global financial flows, prosperity all over the world. It looked like hey, this is really good. This work really well. And then you get into the global financial crisis and suddenly everything that Ben Bernanke sped tried to do, none of it works. So in one sense, policymakers allowed themselves to be fooled into their own.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“I would say that, you know, in one sense, it was the free market solving Triffin's dilemma way back when in the 1950s because governments”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“JP Morgan, we're out of business. We're wiped out. So this is the worst or the worst case for the money dealers operating this global shadow money system. They looked at the failures in 2008 as we could be next. And the Fed can't really stop it. We see how powerless the Fed is. Doesn't matter what the Fed does, there were overseas dollar swaps. There were, you know, the TAF, the term auction facility. There was a primary dealer credit facility, one after another after another of these initialisms that all failed. They didn't keep the crisis from happening. So money dealers looked at the 2008 crisis and said, we need to change the entire way we manage our balance sheet. We need to change the entire way we do money. And so everything has been different since then because there really is no way to go back to the way it was before. And there's nothing that quantitative easing or the Fed or any central bank is going to be able to do about it.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“To deal with balance sheet constraints that limited the ability of dealers to act in all of these various markets to maintain liquid markets so that everything could price in predictable fashion. And when all of those capacity started to disappear in the financial crisis, it wasn't just, okay, we went through this, it was bad, we've had a great recession that transmitted globally. Everybody understood that the risks that they thought wasn't, that weren't there in the pre-crisis period actually were pretty severe. Think about it from terms of just bear sterns. Bear Stearns is sold as some kind of success story that the Fed didn't bail out Bear Stearns, but they got JP Morgan to buy it at the last minute to save it from insolvency and bankruptcy and worse. But if you're a Wall Street proprietor, your money dealer, not just in Wall Street, but outside the United States, you look at Bear Stearns and think, all of that risky stuff that we've been doing for decades, I could be the next Bear Stearns. And it doesn't matter if, you know, we get bought out for, you know, what was it, a dollar or a share?”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“It came from any number of places. You had a collateral shortage, you had a collateral breakdown, you had balance sheets, constraints that became unworkable. You know, when you have a ledger system that operates outside the United States, you have all sorts of these shadow money conduits, shadow money forms that take place. There was any number of possible fault lines. And part of it was, yes, participants in that euro dollar system came to believe that if push came to shove, somehow some way Alan Greenspan or Ben Bernanke would be able to bail everybody out. So risk taking was paramount is certainly in the last parts of the housing bubble. The housing bubble being nothing more than a symptom of what was a global money and credit expansion that happened over decades, especially from 1995 forward. And as all of those things began to contract, especially collateral, as collateral became hard to source and hard to get, there was really no way for any authority, whether the United States or the Federal Reserve or not, to deal with a collateral type shortfall.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“It wasn't a temporary one off. It represented a paradigm shift in this global euro dollar system. So the Federal Reserve, like the ECB or the Bank of Japan, they're going to continue to do QE. They're going to raise in lower interest rates as they see fit, raise or lower their benchmark rates. Market rates are a different story, but that doesn't necessarily mean they're doing exactly what they claim to be doing or what everybody says they're actually doing.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“Quantitative easing, what are all these transactions do? And if quantitative easing isn't actually money printing and spoiler alert, it's not, then quantitative tightening isn't actually monetary tightening. It's nothing more than expectations-based policy to get people to act in a specific way that policymakers have designed. So it makes sense why the Fed would raise rates and do quantitative tightening, because if everybody believes that that's what's actually happening, then they're going to act as if the Fed is heightened. But see, that's not actually how it works and that's not actually an effective form of policy, which is why in 2022, 15 years after the first financial crisis, we're still dealing with the aftermath of the first financial crisis because QE creation of bank reserves didn't actually solve the original problem, which is the other quote that you picked out, 2008 was not about housing. It wasn't about subprime mortgages. It was a global dollar shortage. And the worst part about it.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“But when you actually stop and look at what quantitative easing is, first of all, it's not really quantitative if you've got to do it more than once. And is it actually easing from the perspective of the commercial banking system, bank reserves are not money? It's nothing more than another asset that's created that banks actually hold. And what quantitative easing actually amounts to for the commercial banking system is an asset swap. So it isn't actually money printing, and it can't be money printing. Think about it this way. Have you or I ever been able to use a bank reserve and go to the grocery store or the gasoline station and buy goods or service with it? You can't. A bank reserve is nothing more than an interbank token. And it's only one form of interbank token alongside many other forms of interbank settlement tokens that the private system, the private euro system, had used and invented for decades before them. So we have to stop and think about what the Federal Reserve actually does in terms of bank reserves as well.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“We've seen quantitative tightening just a couple years ago. And the thing is, okay, it gets back to the original problem that we started with, which is what is money? What the Fed creates are bank reserves. Again, it's understandable why people get this wrong, because we're told bank reserves, the Fed, it's printing money. Bank reserves are base money, some people say. Is that actually true? You have to actually stop and think about what is it the Federal Reserve does? What is the role these bank reserves have, if any, in the actual monetary system? And it goes back to expectations. Without thinking anything about it, the Fed expands its balance sheet by buying assets, creating these bank reserves as an offset. And if you don't think any more about it, you think, well, the Fed printed money, I better act as if inflation's coming because the Fed just printed a bunch of money. That's what the Fed is actually counting on. They're counting on people looking at their balance sheet and only their balance sheet, not thinking about what bank reserves actually do, and acting as if that is money printing. That's expected.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“Every currency because it wasn't money that was printed. It was simply a supply shock. And because it wasn't money printing, the way this is likely to end is in another bad way, which is a recession. And that's really what markets have been predicting over the last more than a year actually, because the yield curve has been flattening. So even as interest rates have been rising, the yield curve has been flattening. The euro dollar futures curves have been flattening. All of the signals from the monetary system itself have been sending, hey, there's no money here. This is not money printing. This is a supply shock and this is going to end predictably in something like a contraction or recession. So it was never inflation to begin with. It was simply small the economics of a supply issue.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“As much as it was consumer prices reacting to small e-economics. Whenever you have a demand curve shift out to the right, especially when supply is inelastic as it was during that time, consumer prices have to react. And I know most people are saying, who cares? Consumer prices went way up. What does it matter if it's inflation or what does it matter if we call it inflation or not? And the issue is how it ends because if it's nothing more than a supply shock, it's always going to be temporary and transitory rather than something like the 1970s where you ignite the monetary spark of excessive currency that leads to all sorts of great inflation type of problems. And so, you know, how do we tell one from the other? And one of the things that consistent with excessive currency and money printing would have been destruction of the US dollar. It has been long proclaimed, long predicted, long forecasted. But what you see ever since last year is the US dollars exchange value going up against almost”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“Well, because that isn't actually inflation. This isn't due to money printing. This is sort of the federal government. I mean, that's why you didn't see consumer prices react to QE6 back in 2020. Consumer prices didn't start to skyrocket until March and April of 2021, which was coincident to the U.S. Treasury's helicopter drops. So this wasn't money printing. This wasn't the Fed creating money. This wasn't the Fed being a central bank. It was essentially a supply shock, which was the U.S. government redistributed borrowing through the Treasury and mostly Treasury bills actually. The US government essentially redistributing cash into the pockets of consumers and then consumers went nuts spending that cash at a time when the ability of the global economic system to supply goods and then transport goods in particular was at its lowest point. So you see inventories of goods actually crash during these periods because we had essentially a supply shock. And so it isn't inflation.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“The funny thing is, you know, we always think scientific progress is linear. It always goes in one direction. But here's an example of how monetary scholarship, academic scholarship about money actually moved backward. When you go back in time and do the historical research, you see there's much more awareness, much more understanding, not the whole thing, but much more understanding about at least the basics of the eurodollar system in contemporary time. So back in the 1960s, for example, it took international authorities and national authorities about a decade after the eurodellar system began to really start investigating it because it had become that big of an issue even for national authorities like the Federal Reserve. But when they did, you know, they were sort of putting bits and pieces of it together through time, I mean, which makes sense because it's a brand new development. Banks were doing things. They were not sharing the information with anybody, which is, again, why we call it shadow money. And so there was a huge, huge blind spot for even regulators and officials to try to deal with. But at that time,”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“At the full iceberg, what you find out is, oh, there's a lot more going on and a lot more that was going on long before Saudi Arabia and the oil embargo of 1973. There's this whole other monetary ecosphere, this whole other monetary arrangement that goes back into the 1950s that did all of the things that we assigned with the petrodollar. It was doing countries that were buying and holding U.S. treasuries and using them as reserves. That long predates 1973. That goes back to the early days of the euro dollar system. So the petrodollar you can understand why the public, some parts of the public have said there must be something to it because I know there's money. I know there's something going on outside the United States. I know it involves countries buying and holding U.S. treasuries, but there's no answers other than that. So it makes perfect sense why people would say that's a petrodollar when we're at the really glimpsing is a very small section or very small slice of the overall euro dollar.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“Because it's essentially the public or people who are paying somewhat attention to the monetary system understanding and seeing the tip of the iceberg. They can see that there's some money, there's some kind of monetary activity taking place outside the United States. I don't know what it is. It seems to be pretty big. And I do know that there's this relationship between oil producing countries. Somehow they're ending up with U.S. Treasuries. We've heard about the conspiracy, about the political, you know, the hidden agreement in 1973. So you're looking at something, you don't really know what it is. This offshore system. And you're kind of doing the best you can to put together an explanation for what you can see in the petrodollar in some ways is sort of the understandable way to make sense of what is really the euro dollar system. So in one sense, it's like the tip of the iceberg. It's the tip of the iceberg that you could see. It's the really, it's the euro dollar system part that you can see and make sense of. But when you actually look at underneath the surface of the water,”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“It's a little bit of both, Trey, because you think about it, you're right. As human beings, we're not specialists, most of us. Most of us don't spend their life like I do digging through historical statements and doing all the research. You can't. And so in one sense, you have to sort of take the word for other people about what's going on in particular subject because you just don't have the time to do the research yourself. And so, yeah, this idea of a petrodollar starts from that very natural, very understandable illiteracy and ignorance because it's a complex world. This is a complex monetary system. It's a complex subject operated by hidden shadow forces, not conspiratorial, but forces that are operating outside of the global regulatory framework outside of monetary definitions and everything else. So it's very understandable why people would say the petrodollar took over from Bretton Woods because that seems to be what everybody says and that seems to be, it looks like that's what actually what happened. And there is a kernel of truth to the petrodollar because”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“The short answer is no, and it's a common misperception because you can understand why the Brighton Woods system, which was a quasi-gold back system, a commodity-based monetary system that grew out of World War II and the Ashes World War II, where Harry Dexter White and John Mayor Keynes in particular said, we can't just have an international currency arrangement because nobody will accept it. So we need to tie this international currency to some national reserve. And historically speaking, people wanted to use gold because gold for various reasons that we don't need to get into here. So you had the Bretton Woods system 1944, which always had this inherent flaw or inherent tendency in it, as Robert Triffin called it in the late 1950s, eventually become called the Triffin's paradox or Triffin's dilemma, which was that in order to operate a global reserve currency, you need to have enough currency”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“Cash would, except the currency swap doesn't fit into a monetary aggregate, it doesn't fit into any sort of quantitative measure nor qualitative understanding. It doesn't even fit into the bank balance sheets in any intuitive way. In essence, this is a virtual ledger money system that's a shadow money system because of the way the banks operate on their balance sheet.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“Well, shadow banking is part of it, and that's really more about some of the non-bank participants who actually in this global monetary arrangement. I like to use the term shadow money because they're actually monetary forms that they don't show up any of the statistics. They don't show up in any regulatory discussions. They're not involved in any of the mainstream policy frameworks because, again, this is outside the United States, it's outside of every regulatory regime on earth. And regulators are not too keen about people knowing about this vast, huge monetary system existing outside of their reach when their entire monetary policy and really political existence relies upon the idea that they are very much in control of this system and this arrangement. So it's outside of everyone's reach, but also the ways in which these banks operate monetarily as well as credit has evolved and changed so that you have monetary forms like currency swaps, for example, that function every bit the same as...”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“Not just the US, but pretty much anywhere, which is kind of a strange concept because these banks are located and doing business someplace. They're physically located somewhere, but they have located and they have been able to take advantage of various regulatory blank spots, regulatory boundaries. So this currency system has been able to grow and expand basically outside the reach of national governments, national regulators, bank regulators, whatever it may be, and operate throughout the rest of the world. Again, so the point being to create this global reserve currency arrangement that goes back a long, long time.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“Yen outside of Japan that's in this offshore currency system or even something like the Euro, which is offshore euros. So essentially, after beginning sometime in the 1950s and spreading through the 1960s, we have a huge, very much comprehensive global monetary system that undertook the roles of the reserve currency, global reserve currency, but it's not actual cash. It's not actual currency. There's no money in it. It's a virtual ledger system, a distributed ledger system that the banking system operates, and therefore has undertaken the roles of a reserve currency because its banks have been able to flexibly and dynamically respond to the world in which they live in. And so for the last 60 years, this euro-dollar system has been essentially the global monetary reserve. And it's been because it's offshore, it's outside the jurisdiction.”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT
“Well, technically speaking, and going back all the way to the beginning, euro dollar refers to a very specific term. And it means U.S. dollars on deposit outside the United States. And in the early days, it actually took the form of actual cash deposit, physical Federal Reserve notes, you know, bills, cash bills, and things like that that found their way mostly to Europe, but not just exclusively to Europe. Thus, the term euro dollar. It doesn't have anything to do with the European common currency. It is, again, the term euro simply means offshore because this goes way back to the 1950s and 1960s, long before the European common currency was ever introduced. So whenever you hear the term euro and then attached to a currency denomination, what that simply means is money that the banking system uses outside the jurisdiction of the United States or even any of the other currency denominations that are floating around in it. So there are things like euro yen, for example, which means”
2022-06-17 · We Study Billionaires · TIP457: Why the Dollar Is Not Collapsing w/ Jeffrey Snider · IDENTIFIED FROM THE TRANSCRIPT