The Dollar Endgame

The Dollar Endgame explores the vulnerabilities of the global financial system, focusing on the United States' monetary policies, debt levels, and the potential consequences of current economic practices. It examines market dynamics, regulatory challenges, and historical cycles to predict significant shifts and crises in the financial landscape.

Monetary Policy and Debt Market Dynamics and Crises Economic History and Cycles Financial Markets and Instruments Central Banking Cryptocurrency Global Economic Challenges Regulatory and Fiscal Policy Investment Strategies Economic Predictions and Analysis

The hottest Substack posts of The Dollar Endgame

And their main takeaways

The DRS Mystery

718 implied HN points • 29 Mar 24
💰 Finance Securities Market Manipulation Investors Stock Market
  1. There is a movement to directly register the entire float of a company through the Direct Registration System (DRS), which allows investors to hold their securities in book entry form directly with the issuer.
  2. The growth in DRS registrations started to stall, leading to investigations about why the consistent buy volume and DRS transfer images were not reflecting in reports. Theories emerged about how shares are manipulated and moved between book and plan shares.
  3. Complexities in the market and opaque practices by institutions make it challenging for retail investors to understand the full picture. The DRS numbers may not reflect the complete truth due to potential manipulation and changing market dynamics.

The Gold Endgame Begins

559 implied HN points • 02 Apr 24
💰 Finance Gold Market Manipulation Central Banks
  1. Gold prices have been soaring recently, possibly due to China's influence and central banks accelerating their gold purchases.
  2. The gold market has been subject to manipulation by central banks through various means like buying/selling gold, gold leasing, and engaging in derivatives.
  3. There is evidence of market manipulation in the gold industry, including spoofing tactics by traders leading to inflated or deflated prices, and the potential for a significant impact on the gold market if large investors start taking physical delivery.

STEALTH QE

319 implied HN points • 11 Apr 24
💰 Finance Monetary Policy Federal Reserve Balance Sheet
  1. The Federal Reserve implemented liquidity injections in response to financial chaos post-COVID-19, leading to a tapering process that raised questions about the true nature of the measures.
  2. Despite the apparent tapering by the Fed, financial markets didn't react as expected, hinting at an expansion in the authorities' toolkit that analysts might not fully comprehend.
  3. The evolution of liquidity measures and updated understandings about the Fed's balance sheet reveal a broader range of tools and potentially hidden liquidity injections.

The BoJ is Trapped

279 implied HN points • 19 Mar 24
💰 Finance Monetary Policy Central Bank Inflation Interest Rates
  1. The Bank of Japan raised its rates for the first time in years, adjusting its primary goal for short-term interest rates and marking its first rate hike since 2007.
  2. The Bank of Japan previously used Negative Interest Rate Policy to stimulate borrowing and lending to revitalize Japan's sluggish economy.
  3. The Bank of Japan has ceased certain policies but will continue to print money, maintain low rates, and combat potential inflation, as seen through their recent monetary announcements.

QE is Coming

399 implied HN points • 06 Mar 24
💰 Finance Markets Bitcoin Gold Inflation Central Bank
  1. Markets are anticipating increased liquidity injections from the Fed, with assets like Gold and Bitcoin hitting all-time highs even before the easing cycle starts.
  2. The surge in Bitcoin's value is attributed to significant inflows from U.S.-based Bitcoin ETFs, indicating a historic rally compared to gold ETFs.
  3. The financial markets are preparing for a potential Fed intervention, likely in response to the rising net liquidity despite the seeming balance sheet reductions.
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The Hidden Bank Panic

259 implied HN points • 12 Mar 24
💰 Finance Banking Economy Regulations Capital Assets
  1. Institutions are requesting the Fed to exclude Treasuries from their leverage ratios post the Bank Term Funding Program, which is causing concern within the financial industry.
  2. Capital requirements in banks are crucial for preventing insolvency, with risk-based and leverage ratios being the two main types of requirements.
  3. Leverage ratios do not consider the risk levels of assets and require banks to maintain a specific ratio of capital to assets, helping ensure financial stability.

ANOTHER: The Inside Gold-For-Oil Deal That Could Rock The World's Financial Centers

339 implied HN points • 19 Feb 24
💰 Finance Economics Markets Geopolitics Gold Monetary System
  1. A controversial blogger in 1997 exposed a hidden gold-for-oil deal that impacted global geopolitics.
  2. Gold prices might have been suppressed to maintain the international monetary system's stability.
  3. The delicate balance between gold, oil, and currencies has historical roots and holds the power to disrupt financial systems.

Shades of 2008?

239 implied HN points • 29 Feb 24
💰 Finance Real Estate Banking Market Trends Risk management
  1. The commercial real estate market is facing challenges due to decreased demand for office and retail spaces, leading to increased vacancy rates.
  2. Approximately $1.2 trillion of commercial real estate debt in the US is set to mature within the next two years, posing risks for banks and investors.
  3. There are concerns of a commercial real estate crisis resembling the 2008 financial crisis, with warning signs evident in the US, Europe, and Asia.

GameStopped

439 implied HN points • 29 Jan 24
💰 Finance Stock Market Market Manipulation
  1. In January 2021, the GameStop ($GME) stock price experienced extreme volatility and a significant price surge, shedding light on underlying issues in the stock market.
  2. The situation revealed how shorting mechanisms were exploited, with the stock being sold significantly beyond its float, and the impact of large institutions and financial media favoring institutional interests over retail investors.
  3. The events with GameStop highlighted the complex interactions between retail investors, short sellers, brokers, and clearinghouses, ultimately leading to regulatory scrutiny and uncovering the reality of market dynamics.

Crisis in Shanghai

339 implied HN points • 05 Feb 24
💰 Finance Stock Markets Real Estate Market volatility
  1. Chinese stock markets are collapsing, showing signs of a potential fraud that's causing panic among investors.
  2. The real estate crisis in China is exacerbating the financial turmoil, leading to massive declines in stock market indexes like the Shanghai Composite and Shenzhen Component.
  3. Efforts by Chinese regulators to stabilize the markets, such as injecting funds and clamping down on illegal practices, have so far been ineffective in curbing the crisis.

Asian Financial Crisis Redux

199 implied HN points • 21 Feb 24
💰 Finance Markets Economy Policy Banking
  1. The Chinese yuan is weakening, reaching its lowest level against the dollar in a while. China taking measures like reducing the five-year loan prime rate to stimulate credit demand and revive the property market.
  2. Economists were surprised by the significant decrease in the reference rate by China, indicating the most substantial cut since its introduction in 2019. China is facing challenges from a property crisis, falling consumer confidence, and increasing deflationary pressures.
  3. China's central bank has been injecting liquidity into the financial system consistently through measures like reducing the reserve-requirement ratio for lenders and implementing regulations to support the yuan. The recent net injection of 1 billion yuan aims to maintain balanced liquidity post the Lunar New Year holiday.

2024 Predictions

359 implied HN points • 13 Jan 24
💰 Finance Economy Monetary Policy Inflation Government spending Market Analysis
  1. The Federal Reserve is likely to start cutting rates by Q2 or Q3 and possibly implement quantitative easing, based on recent signals and market predictions.
  2. There is an anticipation that the Fed will eventually restart quantitative easing due to factors like high deficits and pressure from the Monetary Black Hole, impacting financial markets and assets.
  3. Inflation is expected to return in the near future as liquidity programs kick in, fiscal deficits grow, and government spending increases, potentially leading to economic challenges and a recession.

Repo Crisis Revisited

199 implied HN points • 13 Feb 24
💰 Finance Economic Crisis Federal Reserve Financial system Monetary Policy
  1. The repo market is crucial for global finance, and it broke down in September 2019, causing significant repercussions.
  2. The Federal Reserve has been deeply involved in the repo market to ensure the smooth functioning of the world's secured borrowing system.
  3. In September 2019, there was a sudden surge in overnight money market rates, leading to unexpected fluctuations and challenges in the financial system.

Stuffing the Coffers

279 implied HN points • 19 Jan 24
💰 Finance Banking Regulation Economy Federal Reserve Financial Crisis
  1. Regulatory changes post-2008 require banks to hold more US Treasuries. However, banks are running out of space and time.
  2. The Fed made an exemption of Treasury bonds from the Supplementary Leverage Ratio (SLR) to boost lending and stabilize markets during the COVID-19 crisis.
  3. The SLR calculates a bank's solvency by dividing Tier 1 Capital against assets. Adjustments during crises help banks manage potential losses better.

The Fed Stole The American Dream

359 implied HN points • 01 Jan 24
🇺🇸 U.S. Politics Economy Housing Crisis Social Impact Demographics
  1. The Federal Reserve's actions post-2008 financial crisis led to massive asset price inflation in the housing market, benefiting a select wealthy few while worsening economic despair for others.
  2. The Fed's policies, like suppressing interest rates, inadvertently fueled the tech industry boom, resulting in addictive apps and negative impacts on mental health, particularly among young people.
  3. The economic impact of the Fed's actions includes rising depression rates, reduced birth rates, and impending strains on the retirement system, painting a grim picture for the future of the American economy.

The Potemkin Economy

6 HN points • 23 Apr 24
🇺🇸 U.S. Politics Economy Employment Manipulation Unemployment Inflation
  1. Economic data may not reflect the true situation: Reports of a strong economy may be misleading, with statistics like job numbers potentially manipulated to present a facade of growth.
  2. There are concerns about the accuracy of government statistics: Issues like overestimating job growth and manipulating unemployment rates raise questions about the reliability of official data.
  3. The changing nature of employment is worrisome: The shift towards part-time work, decline in full-time jobs, and decreasing workforce participation rates indicate underlying problems in the job market.

Net Liquidity

299 implied HN points • 05 Dec 23
💰 Finance Financial system Central Banks
  1. Liquidity is more than just central bank reserves; it's about the available cash for trading financial assets.
  2. Global liquidity, different from traditional money supply measures, is crucial for funding transactions and rolling over debt in financial markets.
  3. Increases in liquidity drive up prices of assets like equities, bonds, and cryptocurrencies as more dollars chase the same investments.

The Monetary Event Horizon

938 implied HN points • 08 Jul 23
💰 Finance Debt Economy Government Interest Rates
  1. The U.S. national debt is skyrocketing due to increased government spending, tax cuts, and economic events like the COVID-19 pandemic, leading to a staggering $32.47 trillion in debt and a rapid increase of over $1 trillion in just 34 days.
  2. As the U.S. debt continues to grow, the country is possibly entering a debt spiral where borrowing becomes necessary to fulfill existing financial obligations, potentially leading to an annual interest payment of $1.6 trillion at a 5% rate and putting the nation at risk of financial instability.
  3. Rising interest rates and debt levels could push the U.S. Treasury towards insolvency, with potential consequences including inflation and the need for severe fiscal austerity measures to mitigate the crisis, a situation further complicated by complex economic feedback loops.

Ayahuasca and the Simulacrum

359 implied HN points • 03 Nov 23
💰 Finance Economy Markets Central Bank Derivatives Monetary Policy
  1. Jorge Luis Borges' fable "On Exactitude in Science" explores the concept of representation and the consequences of abstractions overtaking reality.
  2. Psychedelics like Ayahuasca can challenge our perceptions by dissolving the ego and blurring boundaries between the self and the external world.
  3. The modern financial system, with its heavy reliance on derivatives, has created a simulacrum that central bankers manipulate, leading to a dangerous dependence on fake money.

Bonds are the Ultimate Shitcoin

399 implied HN points • 17 Oct 23
💰 Finance Investing Economics Banking Debt Monetary Policy
  1. Bonds are facing significant challenges with the Federal Reserve's interest rate hikes and inflation, causing a major downturn in the bond market.
  2. Bonds are crucial in the financial system and act as a form of money, affecting various sectors like banking and exposing risks in durations and interest rate movements.
  3. The bond market's current struggles are indicative of larger economic issues, with potential consequences for inflation, debt, and decisions by the Federal Reserve.

China Crumbles

199 implied HN points • 16 Dec 23
🌍 World Politics China Economy Debt Real Estate Banks
  1. China's real estate market is facing significant challenges, with existing home prices dropping and outstanding property loans declining.
  2. Major developers like Evergrande and Country Garden are struggling with debt obligations and bankruptcy proceedings.
  3. Moody's downgrade of China's credit outlook indicates that the turmoil in the real estate sector is starting to impact the broader economy and banks.

The Singularity

339 implied HN points • 26 Oct 23
💰 Finance Monetary System Quantitative Easing
  1. Money creation and quantitative easing are often misunderstood concepts in the financial system, with complex implications for the economy.
  2. Most of the circulating money is in the form of bank deposits, created when commercial banks issue loans, not just by saving money in bank accounts.
  3. Monetary policy, like quantitative easing, impacts the money supply and bank reserves, influencing the real economy by affecting inflation, prices, and economic growth.

Bitcoin Solves Triffin's Dilemma

259 implied HN points • 12 Nov 23
💰 Finance Bitcoin Cryptocurrency Macroeconomics
  1. The Bretton Woods system established the U.S. dollar as the global reserve currency in 1944, benefiting the U.S. significantly.
  2. Triffin's dilemma addressed the fatal flaw in the Bretton Woods system, highlighting the challenges of a central issuer currency in a global monetary system.
  3. Bitcoin offers a solution to Triffin's dilemma by being a neutral reserve currency, avoiding the issues associated with central issuer currencies and promoting balance in the global economy.

How The First Reserve Currency Died

379 implied HN points • 19 Sep 23
💾 History Currency Global Trade
  1. Reserve currencies have played a vital role in upholding global dominance for empires throughout history by offering a widely accepted medium of exchange, fueling borrowing, spending, and state funding for wars of expansion.
  2. History does not follow a linear path but rather a cyclical pattern, with repeated 80-year cycles known as Fourth Turnings, marked by moments of crisis and upheaval that reshape societies and nations.
  3. The rise and fall of the Dutch Guilder, the first global reserve currency controlled by the Dutch through the powerful United Dutch East India Company, exemplify the dynamics of economic dominance and empire-building in the past.

Edging Armageddon

758 implied HN points • 30 May 23
🇺🇸 U.S. Politics Government Economics Finance Debt Legislation
  1. The debt ceiling is a legal cap on how much money the US government can borrow to pay for its expenses. It's a self-imposed limit to control borrowing.
  2. A US debt default would have severe global consequences like loss of confidence in US financial stability, spike in interest rates, and turmoil in financial markets.
  3. The recent debt limit deal promises two years of complete debt limit suspension until 2025, new spending caps, and potential removal of budgetary limits on government spending post-2025.

Endgame #2

319 implied HN points • 28 Sep 23
💰 Finance Currency Bonds Market Analysis Economic Impact Government shutdown
  1. Japan is facing challenges with its currency and bond market, with the USD/JPY crossing critical levels and the market pressuring the Yen amidst debt concerns.
  2. The US bond market is experiencing significant turbulence, with record lows in various instruments and rising yields posing challenges for investors.
  3. China is grappling with an economic slowdown fueled by a declining property market and potential need for widespread bailouts, leading to concerns about the country's economic future.

Major Signals are flashing Code Red in the Shadow Banking System

718 implied HN points • 07 May 23
💰 Finance Banking Investments Regulation Economy Markets
  1. The reverse repo figures reaching $2 trillion signal a serious issue in the market, showing strains on the entire banking system from massive liquidity injections.
  2. Reverse repos in the shadow banking system allow entities like MMFs to act like banks but without the same regulations, functioning in an opaque, complex, and risky world.
  3. The increased usage of the Fed's RRP facility and rising award rates indicate collateral shortages within the system, leading to concerns about the stability of MMFs and potential risks in the financial system.

Endgame #1

359 implied HN points • 26 Aug 23
💰 Finance Economics Global Markets Currency International Trade Cryptocurrency
  1. Argentina is facing a severe economic crisis with massive currency devaluation and high inflation, but there is hope for stabilization with proposed governmental changes and monetary reforms.
  2. China's property market is experiencing significant challenges, with key real estate firms facing default, worker payment issues, and the country slipping into deflation, raising concerns for a possible global recession.
  3. The BRICS alliance, particularly China and Russia, is strategizing to lessen dollar dominance by expanding membership and discussing possible alternatives, like involving major oil exporters and establishing a new reserve currency, amidst complexities and challenges in implementing such changes.

Layered Money

159 implied HN points • 22 Nov 23
💰 Finance Bitcoin Debt
  1. Understanding how the financial system operates in layers is crucial for designing an efficient monetary system.
  2. The modern financial system operates with different layers, each offering scaling solutions and varying levels of security, transparency, and operability.
  3. The layers of the financial system include the base layer with systems like FedWire, a layer for deposits, and a top layer for debt, all serving different needs of users in the economy.

The Sword of Damocles

319 implied HN points • 30 Aug 23
💰 Finance Global Markets Economic Theory Central Banks Monetary Policy
  1. The global financial system heavily depends on the US dollar, causing a constant demand for dollars worldwide.
  2. Triffin's Dilemma and the Dollar Milkshake Theory highlight the systemic risks and implications of the US dollar's dominance.
  3. The Fed plays a critical role in stabilizing the global financial system by supplying dollars; any missteps could lead to widespread financial instability.

Endgame #3

119 implied HN points • 29 Nov 23
💰 Finance Economy Investments Monetary Policy Real Estate Banking
  1. Japan adjusted its bond yield control policy in an effort to curb interest rates, showing the delicate balance between stimulating the economy and managing debt.
  2. The United States is experiencing increases in national debt and a housing market slowdown due to rising interest rates impacting new home and car sales.
  3. Gold prices have been rising as a safe haven investment, influenced by a weakening dollar and central banks acquiring significant amounts of gold, serving as a potential indicator of future monetary debasement.

Argentina Enters the Endgame

239 implied HN points • 21 Aug 23
🌍 World Politics Economic Crisis Quantitative Easing
  1. Argentina is facing an economic crisis with collapsing peso, soaring inflation, and high demand for US dollars.
  2. The country's central bank has devalued the currency and increased interest rates, but the situation continues to deteriorate.
  3. People in Argentina are scrambling for US dollars, leading to significant fluctuations in the exchange rate.

China Teeters

219 implied HN points • 01 Sep 23
🌍 World Politics China Real Estate Economy
  1. China's real estate market is showing warning signals and potential financial crisis issues.
  2. The Chinese government's push for massive industrial growth led to developers taking on massive debts for unprofitable projects like 'ghost cities'.
  3. Lenders in China have authorized bad loans for real estate projects, creating a housing bubble that surpasses the 2008 financial crisis.

The Japanese Maginot Line

239 implied HN points • 13 Aug 23
💰 Finance Monetary Policy Central Bank Interest Rates Government debt Quantitative Easing
  1. The Bank of Japan's shift in monetary policy caused chaos in FX and stock markets. The volatility in bond markets led to unscheduled bond-buying operations.
  2. Yield Curve Control aims to keep bond yields in a tight range to suppress yields and maintain accommodative monetary policy. This strategy becomes crucial in Japan with high government debt.
  3. The BoJ is strategically intervening in bond rates, pushing them back down whenever they approach a certain threshold. They aim to maintain confusion and market control.

Yellen's Billion Dollar Credit Card

339 implied HN points • 05 Jun 23
💰 Finance Government debt Federal Reserve Market Dynamics
  1. The Treasury is issuing extremely short-term debt instruments to finance government operations, essentially turning into a massive credit card to avoid default.
  2. The history of short-duration Treasury bills dates back to World War I, where the debate of financing war expenses through debt or taxes arose, leading to the issuance of Liberty bonds and certificates of indebtedness.
  3. The use of these short-term debt instruments by the Treasury is a strategic move to meet immediate financial obligations, especially amid significant spending needs, while also impacting liquidity in the banking system.

The Case for Fiat

159 implied HN points • 23 Sep 23
💰 Finance Monetary Systems Economic Theory Financial Literacy Cryptocurrency Wealth Inequality
  1. The fiat system's survival doesn't depend on morality, as history shows evil systems have persisted. People may feel powerless against organized evil but may also become complicit in it.
  2. The fiat system, flawed as it is, has worked to lift many out of poverty and fuel innovation. Everyday citizens often lack the financial and political knowledge to make informed decisions about the system.
  3. Bitcoin's adoption faces hurdles as the majority may not share the beliefs of its proponents. Transitioning to a new system might lead to short-term pain and disparities, impacting various demographics differently.

Eurodollar I: Origins

139 implied HN points • 07 Oct 23
💰 Finance Banking Central Bank Financial Stability
  1. There exists a secret financial system, the Eurodollar System, that operates outside traditional financial regulations and could impact the global economy significantly.
  2. In the history of banking, innovations like private banks and clearing systems arose to address challenges like widely circulated banknotes and redemption issues.
  3. The Federal Reserve was created based on existing reserve bank systems, adding the revolutionary concept of the money printer and bank reserves, paving the way for expansion of credit creation.

The Dying Banks and the Singularity

339 implied HN points • 12 May 23
💰 Finance Banking Investments Market Regulations Risk management
  1. There is a financial crisis brewing with banks collapsing and facing liquidity issues, leading to a rapid withdrawal of funds from the system.
  2. Banks like Silicon Valley Bank have made risky investments with high-end clients, creating vulnerabilities in the financial sector.
  3. The Federal Reserve's policies have inadvertently caused a drain on traditional banks, pushing money into shadow banks and triggering a potential chain of bank failures.

BRICS: A Ghost Power?

139 implied HN points • 12 Sep 23
🌍 World Politics Global Alliances Geopolitical Tensions Global Economy
  1. Creating a new currency by BRICS is not a practical idea due to various challenges and conflicting interests among member nations.
  2. For a global reserve currency to be successful, it needs to address essential features like demand, liquidity, and market size.
  3. Switching from the U.S. Dollar as the global reserve currency would require a significant shift in economic advantages and stability, making it a complex and unlikely change.

More is coming soon!

299 implied HN points • 07 May 23
💰 Finance Fintech Financial system
  1. The author, Peruvian Bull, is a fintech analyst focusing on finance and monetary economics.
  2. The author invites readers to join their journey to explore the darker aspects of the financial system.
  3. The post hints at more content to come in the future.