Eurodollar University

The latest purchasing manager surveys (services, manufacturing, composite) and manufacturing index (Kansas City Fed) suggest the United States is heading towards a recession, soon (maybe already?). ----EP. 254 REFERENCES---- Alhambra Investments Blog: https://bit.ly/3wh01G2 RealClear Markets Essays: https://bit.ly/38tL5a7 Epoch Times Columns: https://bit.ly/39ESkRf -------THE EPISODES------- YouTu...

How does a former bank trader with billions of euros in assets react to an impending recession? Is the inflection in bond yields (back down) and prices (back up) starting right now? Did the European Central Bank just warn of a re-run of the 2011-12 European Sovereign Debt Crisis? ----EP. 253 REFERENCES---- Alfonso Peccatiello's Substack: https://TheMacroCompass.substack.com/ Alfonso Peccatiello's...

Jeff Snider explains how the global currency and monetary systems actually work, the origins of the Eurodollar system, Triffin’s Paradox and the breakdown of the Bretton Woods System, the stampede towards prime collateral at all costs, the importance of sentiment and why the main role of central banks is theatrical, how vast swathes of the real economy have been deprived of credit since 2008, and...

One day prior to the Federal Reserve raising its policy rate by a *bananas* big 75-basis point the Eurodollar Futures market moved its yield curve inversion into the next four quarters. As fast as the Fed is hiking, the market is betting it will 'imminently-ish' be cutting. Market contempt! ----EP. 251 REFERENCES---- More Data And Markets To The Idea Something (big) Changed A Couple Months Ago: ht...

The pinnacle of investigative, introspective financial journalism assembled in front of the Federal Reserve chairman on June 15, 2022 and asked him... questions? Hardly. Weak sauce. In this episode Jeff Snider responds as a Fed chairman SHOULD respond - honestly. ----EP. 250 REFERENCES---- Transcript of Press Questions at Fed Conference June 15, 2022: https://www.federalreserve.gov/mediacenter/fil...

Jeff Snider reacts live to Jay Powell's June 15, 2022 opening statement to assembled members of the press regarding the Federal Reserve's 75-basis point rate hike to the Federal Funds target range: the overarching message, overall economic activity, inflation, labor, and the 3/4-point move. ----EP. 249 REFERENCES---- Transcript of Chair Powell’s Press Conference June 15, 2022: https://bit.ly/3bbk4...

The Crash of 1907 'convinced' Washington DC that a central bank was needed. Or, perhaps more likely, the Crash of 1907 was used as an excuse for a national central bank. ----EP. 248 REFERENCES---- The Premium For Cash Is Presently Enormous: https://bit.ly/3xr0G7l Alhambra Investments Blog: https://bit.ly/3wh01G2 RealClear Markets Essays: https://bit.ly/38tL5a7 Epoch Times Columns: https://bit.ly/3...

We are told that Paul Volcker led the Federal Reserve into the breech and bravely and knowingly raised short-term interest rates so as to bring about a recession and extinguish the 1970s Great Inflation. But according to Fed transcripts Volcker & Co. fell ass-backwards into recession. ----EP. 247 REFERENCES---- Monetary Policy Is All Talk All the Time, and Always Has Been: https://bit.ly/3xNg9...

US consumer prices rose 8.6% year-over-year for the month of May 2022, says the US Bureau of Labor Statistics. Economists, financial media and central banks implicitly conflate this price expansion with money expansion (inflation) and economic expansion (booming) - that's a mistake. ----EP. 246 REFERENCES---- CPIs Aren't the Economy, and They're Not Inflation: https://bit.ly/3MMn8NX United States...

Pine-Richland High School won a 120+ team international competition debating whether the dollar's hegemony is detrimental. Pine-Richland won due to their preparation, perspiration, inspiration... and because they ambushed the competition with something called "the eurodollar".  Sponsored by the Brewer Foundation, each year the International Public Policy Forum hosts a new debate. Teams from across...

US President Joe Biden has a three-step plan to address the vulnerable US economy. We agree the economy is vulnerable but note that it is not for the reasons the president believes. Also, we note similarities between President Xi Jingping's 2017 messaging and Biden's 2022 narrative. ----EP. 244 REFERENCES---- Joe Biden: My Plan for Fighting Inflation: https://on.wsj.com/3MpUAcT President Phillips...

Two short-term money markets are yielding LESS THAN the Federal Reserve's RISK FREE reverse repurchase agreement program. Despite the Fed offering now $2 trillion in Treasury securities to the market the 'below-market' yields are signaling there's not enough money / credit / collateral / securities available -- a money shortage. ----EP. 243 REFERENCES---- RRP (use) Hits $2T, SOFR Like T-bills Belo...

The Eurodollar Futures yield curve inverted on December 1, 2021 warning that somewhere over the horizon there was trouble. In March 2022 the US Treasury curve inverted too, confirming the earlier alert. Today the Eurodollar market is warning that trouble is on the horizon itself, and approaching. ----EP. 242 REFERENCES---- UST 2s & Euro$ Futures *Whites* Both Ask, Landmine At Last?: https://bi...

According to the US Census Bureau both retailers and wholesalers reported *bananas-crazy* increases in inventory levels. As the US economy tips over into a slowdown - and realistically a recession - these inventories will have to be purged at fire-sale prices. ----EP. 241 REFERENCES---- Inventory Flood Continues Just As Consumers Tap Out: https://alhambrapartners.com/2022/05/27/inventory-flood-con...

Target, Walmart, Japanese merchandise exports, German retail sales, and the early-morning hours of US Treasury Bill trading are all sending the same message: escalating, systemic fragility of the economic order. ----EP. 240 REFERENCES---- T-bills Targeted Target: https://bit.ly/3zf5teH Can’t Blame COVID For This One: https://bit.ly/3Miq6JM Alhambra Investments Blog: https://bit.ly/3wh01G2 RealClea...

A generation ago banks knew that there was money to be made and they acted upon that faith, creating money for the world economy to enrich itself. But ever since 2008 banks have been scared to do it; the risk is too great! The Global Financial Crisis never ended, it continues to the present. ----EP. 239 REFERENCES---- It Isn't the Fed's Theater of Rate Hikes That Got Us Here: https://bit.ly/3wvRNK...

The Federal Reserve is hiking rates as part of political theater in response to pressure from the legislative and executive branches of the US government. 'Do something!' A panoply of economic, monetary and financial accounts are screaming for looser monetary policy, not tighter. ----EP. 238 REFERENCES---- History Shows the Fed Would Be Cutting Rates by Now: https://bit.ly/3G2vCyF Alhambra Investm...

The Federal Reserve, we are told, controls interest rates. We have learned over and over that is not true with long-term rates (e.g. yield curve inversion, Greenspan's "conundrum"). But what about short-term rates? Surely the Fed is in control. No, not really - just look at US Treasury Bills. ----EP. 237 REFERENCES---- Why the Fed Can’t Hike T-bill Rates and What That Really Means: https://bit.ly/...

Retail sales - a temperature check on the American consumer - were absolutely fabulous in April 2022; glory, hallelujah! So then why are three different, independent surveys of the US consumer reporting results that range from "bad" to "miserable"? Because there has been NO REAL growth, only nominal. ----EP. 236 REFERENCES---- Shipping Around Retail ‘Inflation’: https://bit.ly/3PyeXaA Alhambra Inv...

The Chinese reported how their economy has fared in the month of April 2022 - the results were very, very poor. It is tempting to say the illness is Beijing's 'Zero Covid' lockdown of hundreds of millions of souls. But the true illness is the long-term, degenerative money shortage. ----EP. 235 REFERENCES---- Synchronized Not Coronavirus: https://bit.ly/3sIimtF Why CNY DOWN = BAD (Part 3) For Every...

The Federal Reserve is hiking interest rates while the European Central Bank is in no rush to raise its policy rates. The Economics Textbook and Financial Media say that is why the dollar is rising and the euro is falling: interest rate differentials. But that is not it! ----EP. 234 REFERENCES---- What Really ‘Raises’ The Rising ‘Dollar’: https://bit.ly/3sr6xrx Do I Owe Christine Lagarde An Apolog...

US Treasury Bills are trading below the 'floor' set by the Federal Reserve. Why? Why guarantee less return with Treasury Bills when the Fed is promising more?! Because the market will suffer the lost return when the financial system is short monetary collateral (like UST Bills). ----EP. 233 REFERENCES---- Collateral Shortage…From *A* Fed Perspective: https://bit.ly/3ypudk0 Alhambra Investments Blo...

In 1928 American economist Irving Fischer published a book titled "The Money Illusion" in which he explained the difference between nominal numbers (Japan's exports are booming! Imports are surging!) and inflation-adjusted, real numbers (Japan's exports are falling! Imports are stagnating!). ----EP. 232 REFERENCES---- What We Can Learn From Japan About the Real Economic Risks to the World: https:/...

President Xi Jingping has, according to Western financial media, announced an 'all out' infrastructure spending spree stimulus to goose the Chinese economy. What will this spending be on? On tightening the security state. More observation, more tracking, more control. ----EP. 231 REFERENCES---- Synchronized Manufacturing, Hopefully Not Mao: https://bit.ly/37sieXI Alhambra Investments Blog: https:/...

The public utility of commodity-based money was in retreat long before President Roosevelt confiscated gold. That has implications as to whether the 1970s Petrodollar was a real monetary system, as well as whether we are moving towards a commodity-based system now, a Bretton Woods 3. ----EP. 230 REFERENCES---- The Root of the Petrodollar Error Is That There Is One: https://bit.ly/39ESnMV Alhambra...