The USD Isn't The Reserve Currency

This statement might surprise people but when you look at the money that is spread throughout the world, you will see this is the case.

If the USD isn't the world's reserve currency, then what is?

Here is where things get very complicated. Once again, we have to stress how the world is not how people make it out to be. When it comes to money, very few have an idea of how things operate.

It requires looking beyond currency. That is what most people believe is money. Unfortunately, this is not correct.

In this article we will delve into some of the different markets and how this reveals a different story.

Do Not Look At Payments

In my discussions about HBD and stablecoins, I cannot tell you how many times people mention about getting HBD accepted for payments. That is all people look at.

The reality is that is just a smidgeon of the monetary transactions globally. This is why those who believe in the Petrodollar are also equally as wrong. The USD's strength does not come from that.

What make the USD so powerful, along with the confusion, is the USD is the unit of account used globally. The challenge is that, in most instances, there are no dollars involved.

This is what dwarfs the medium of exchange. While the USD is the dominant force there also, it is small potatoes.

The Bankers Tell The Entire Story

It is estimated that 90% of all international transactions are financed through the Repo market. The question is how many people reading this are even aware of what this is? You would think of something with such huge volume would be known by everything.

In fact, you would also believe the mainstream media would be all over this. Of course, when was the last time CNBC or Bloomberg has a trader from the Repo market on?

This little understood market is enormous. The official numbers are $3T-$4T daily in swaps are done. We state official since that is only what the custodian and primary dealers report to the Federal Reserve Bank of NY. What takes place with bilateral agreements is likely orders of magnitude higher.

Notice the numbers again: $3T-$4T daily. That appears to be a lot of money. Here is the challenge: there is virtually no USD in this market. It is all done in other form of "money" the banks utilize. This can be Treasuries, MBS, Interest Rate Swaps, or anything they can think of.

We are dealing with true balance sheet banking.

The Eurodollar System

One of the most overlooked, yet vital aspects, to the financial puzzle is the Eurodollar system. This is sometimes called the wholesale or shadow banking system. Whatever term you give it, this is what fuels the global economy. Once again, few are aware of it.

Instead everyone watches the Fed like they matter. It is the Eurodollar system which makes the "printer go brr" total nonesense. The Fed doesn't print USD, they create reserves. The problem is the are worthless in the Eurodollar system since they have zero value as collateral.

When a system depends on collateral, anything that is not in there is worthless. That is why bankers ignored reserves as far back as 1937. They have no impact upon anything in the real economy. Paul Volcker admitted this back in the 1970s.

Often, I alluded to the Alan Greenspan statement in the FOMC meeting in 2000 regarding money. He cited the proliferation of products as the reason why it was "increasingly difficult" for the Fed to even find money.

What were those products? Certainly he wasn't referring to Amazon. It was the money created by the international banking conglomerate. This is what changed the entire system.

Starting in the 1950s, the bankers started to use USD in foreign banks as the basis for a system of lending, borrowing, remittance, cross-border payment, and collateralization. This grew to the point where USD no longer was the basis of this other than that was the unit of account. When we look at the entire spectrum, we have tens of trillions in assets with no USD whatsoever.

This is why Greenspan, and certainly Powell, cannot find the money. They are looking at it through economists eyes. The bankers truly understand.

Its The Eurodollar Dummy

So when you tear it down, it is really the Eurodollar that is the reserve currency. This is what most cross border payments utilize. It is the basis for tens of trillions in overnight and short term lending. It is the basis for the quadrillion derivative market.

Essentially, this is what runs the show.


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Bang, I did it again... I just rehived your post!
Week 115 of my contest just started...you can now check the winners of the previous week!
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(Edited)

If my interpretation is accurate that cryptocurrency is now a "threat" to the Eurodollar system, will the former also be in the process of replacing the latter in its position as a reserve currency?

!PIZZA

!CTP

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Blockchain is actually the innovation. It is the Eurodollar system's foundation.

It all comes down to the ledger. Right now, the bankers control that. If we understand that the monetary system is a combination of accounting with communications, then we see how blockchain serves that role.

Then it is up to us, instead of the bankers, to create whatever forms of money we decide to.

We are taking over their role.

With that, it makes sense to keep the USD as the unit of account since that is what 4 generations of people understand. But as with the Eurodollar system, there is no USD currency involved.

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I really like that part where we are taking the bankers' role. 😄

!LOLZ

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When you truly understand the banking system and how it really operates, it is easy to see where this is all going.

Distributed ledger technology (DLT) is very powerful. We can really alter the control of the financial ledger that is operating globally and keeping track of all our money.

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Yeah, this is good news, but most people either refuse to see it or they think it's too good to be true. 😆

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This is a good information you have shared thanks..crypto currency is also giving some though time to local banks here also but they don't just want to admit that crypto is the life saver

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Thank you for this Eurodollar information. Here in Italy someone says that the euro will no longer exist in 10 years. I say that it is impossible precisely because the euro-dollar exchange rate is the most used exchange rate in the world.

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The Eurodollar has nothing to do with the EURO. Actually, other than a unit of account, it has nothing to do with the dollar.

Euro in this content means outside the domestic system.

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Well, here in my country, Venezuela, although the USD is not the official currency, practically if we go out on the street, most of them have them to protect themselves from inflation. I don't know how it will be in other countries but here it is

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That is what most in the US do not realize. They USD is a safe haven, especially in developing countries. Some areas, it is more valuable than gold since it has a lot more utility.

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So many hidden informations in this world. So many things I don't understand but thanks for this information

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On any given Tuesday, we can short circuit the bankster system by simply continuing to make the goods while refusing to pay for anything.
You contribute one share of the work, and you receive one share of the production.

But, they don't have to burn books when nobody reads them.

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