Source: https://www.linkedin.com/feed/update/urn%3Ali%3Ashare%3A7005765449485352960
#Fed #Chair #Powell Save the #Americans from #Inflation AND #Recession by Doing #Volcker: https://lnkd.in/g3WVxHdr : J.P. Morgan CEO: “Inflation will Cause Recession. 5% Not Sufficient to Subdue Inflation”: https://lnkd.in/gQ2_CQVG :
Ascertain Which Other Dollar-Denominated Emperors Are Swimming Naked in the ZIRP Swamp besides Leveraged-Zeroed Crypto “rife with criminality” with “73% to 81% [crypto investors having] likely lost money”: https://lnkd.in/gkxnxmbU :
$65 Trillion #Derivatives in Dollar Debts Mostly Off The Books:
#Off-#BalanceSheet #Derivatives:
Zero Interest Rate Policies #ZIRP have encouraged Historically Unprecedented #Hidden #Leverage and #Maturity #Mismatch Resulting in Unprecedented #Dollar #Funding #LiquidityRisk inter-coupled with #CounterParty #CreditRisk and #MarketsRisk. Many of such #Real #Risks are becoming exposed with #Normalizing of #Interest #Rates as evident from the $3 #Trillion #Crypto #Market coming into #Public #View with recent events.
#MarkToMarket: #US #Dollar: #Real #Emperor With #Clothes:
“FX swap markets are vulnerable to funding squeezes. This was evident during the Great Financial Crisis (GFC) and again in March 2020 when the Covid-19 pandemic wrought havoc. For all the differences between 2008 and 2020, swaps emerged in both episodes as flash points, with #dollar #borrowers forced to #pay #high #rates *if they could #borrow at all*.”
Bloomberg: ‘Huge, Missing and Growing:’ $65 Trillion in Dollar Debt Sparks Concern: #FX #swaps a ‘blind spot’ in #global #finance:
https://lnkd.in/g7y_ahBF :
“There’s a hidden risk to the global financial system embedded in the $65 trillion of dollar debt being held by non-US institutions via currency derivatives. A lack of information is making it harder for #policy makers to #anticipate the next #financial #crisis. In particular, they raised concern with the fact that the debt is going unrecorded on balance sheets because of #accounting conventions on how to track #derivative #positions.”
Bank for International Settlements – BIS: Dollar debt in FX #swaps and #forwards: huge, missing and growing, #BIS Quarterly Review, December 2022: 05 December 2022:
HTML https://lnkd.in/gf9ji-gq :
PDF https://lnkd.in/g4cNqneq :
• FX swaps, forwards and #currency #swaps give rise to #dollar #obligations that were backstopped in 2008 and 2020 by #centralbanks acting on little information about who owed the #debt.
• For non-banks outside USA, dollar obligations from FX swaps, forwards and currency swaps have grown fast, reaching $26 trillion or double their on-balance sheet dollar debt.
• In mid-2022, non-US banks with direct access to Federal Reserve #credit only in their US operations owed an estimated $39 trillion in dollars from #FX #swaps, #forwards and #currency #swaps.
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