Mega-Bailout, Dollar Flood, So How Are They Out Of Dollars Yet Again?

In reviewing this, a few things should stand out. First, how the Federal Reserve is not a dollar central bank, or a central bank in charge of the dollar monetary system. That’s what we are led to believe the institution does, take direct care of dollars broadly speaking (using bank reserves). Instead, the Fed is nothing more than a domestic bank authority whose actual authority ends at the US border.

But it’s not just that its authority ends at the border, the entire official understanding of dollars and money does, too. No small thing. This despite the fact, as I chronicled in good detail in the article above, what goes on outside the US in dollars is bigger, more relevant, and therefore the primary means of setting the global direction. US, like Argentina, included.

The only difference is one of degree, not type.

The gross eurodollar size was in 1988 a third greater than the entire [domestic] M2 stock would be three years afterward, while its net size was closing in on two-thirds of it. And this was three decades ago.

They don’t care; they don’t factor this at all. In fact, central bankers and Economists struggle even to explain the “good” times like the so-called Great “Moderation” because in the mainstream, official view there are only domestic banks to worry about. And the only time anyone worried about domestic banks was a dozen years ago.

Global dollars, they might exist, and a few Fed researchers have occasionally, infrequently written about them, but that’s as far as it has ever gone. Or ever goes the orthodox thinking.

The results show. It’s all a puppet show. There’s no inflation puzzle, nor is there some huge global mystery about why everything changed around 2008 (August 9, 2007, specifically).

The IMF mega-bailed out Argentina. The Fed flooded 2020. And yet, “somehow” this country is out of dollars again. It’s really easy to think that it’s just Argentina being Argentina, but that’s just what the IMF and Jay Powell think. Look where it’s got them – and us.

They are hardly alone.

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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