Storm warning: almost a trillion in global reserves gone, a quarter 'missing' from Swiss.

[@GillerHeston]

In light of the ongoing global economic crisis, it is crucial for everyone to prioritize investing in diverse sources of income that are not reliant on the government. This includes exploring opportunities in stocks, gold, silver, and digital currencies. Despite the challenging economic situation, it remains a favorable time to consider these investments.

[@rogerwheelers4322]

The pathway to substantial returns doesn't solely rely on stocks with significant movements. Instead, it revolves around effectively managing risk relative to reward. By appropriately sizing your positions and capitalizing on your advantage repeatedly, you can progressively work towards achieving your financial goals. This principle applies across various investment approaches, whether it be long-term investing or day trading.

[@joshbarney114]

Despite utilizing the correct strategies and possessing the right assets, there can still be variations in the investment returns among different investors. It is important to acknowledge that experience plays a crucial role in investment success. Personally, I realized the significance of this and sought the guidance of a market analyst, which enabled me to substantially grow my account to nearly a million. I strategically withdrew my profits just before the market correction, and now I am taking advantage of the buying opportunities once again.

[@FabioOdelega876]

@@joshbarney114 Inflation is around 6.5% here in the UK, but as we know it's definitely way more than the Government would like to admit. My plan is to earn more passive income and ride this out, can your Investment-adviser assist?

[@joshbarney114]

@@FabioOdelega876 My Financial adviser is ‘’Colleen Janie Towe’’ she’s highly qualified and experienced in the financial market. She has extensive knowledge of portfolio diversity and is considered an expert in the field. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.

[@FabioOdelega876]

@@joshbarney114 Thanks for the contributions, I just skimmed through Colleen Janie Towe webpage, interesting stuff, wrote her an email.

[@norsefalconer]

Always interesting listening to Jeff's take on macro. Amazing the information and insight available today for free.

[@danthemann6565]

Jeff, nothing short of a remarkable and interesting presentation. Keep doing what you do, I will humbly continue to learn from you.

[@Longtack55]

The Yield Curve caution was given by Mr Grantham two years ago. He was a year early but he has experience and patience. Your commentary was excellent Jeff, particularly when you mentioned the difficulty of timing the start of the fall.

[@graceocean8323]

As an lnvesting enthusiast, I often wonder how top level investors are able to become millionaires off investing. . I’ve been sitting on over $545K equity from a home sale and I’m not sure where to go from here, is it a good time to buy into stocks or do I wait for another opportunity?

[@MattDouglas-hj9wh]

It's best to seek an advisor right now, unless you're canny yourself. As a business owner in both the service industry and eBay reseller of all product categories, I can tell you we’re in a deep recession and everyone is running out of money.

[@trazzpalmer3199]

I agree, that's the more reason I prefer my day to day invst decisions being guided by a invst-advisor, seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using a invst-coach for over 2years+ and I've netted over $900K.

[@trazzpalmer3199]

"Carol Pasol Lewis". You can easily look her up, she has years of financiaI market experience.

[@contemplating1015]

I greatly appreciate the time, effort and research you put into these videos. We are very lucky!🙏

[@Jean-BlaiseGillioz]

Hello Thank you for the quality of your work and the seriousness of your analyses; As far as Switzerland is concerned, the decline in reserves is simply explained by the fact that the dollars held with the National Bank are invested mainly in US stocks and bonds, the price of which has simply fallen.

[@miltkarr5109]

I like Jeff. He talks slow and thinks through what he says. Then I play at 2x speed to download the info.

[@robryan751]

hey, thanks for the tip.

[@JakeAllen3]

Lmao same

[@tactileslut]

He's usually faster. Jet lag is real.

[@mattmo9829]

FX reserves go down in USD because other assets held are to be recalculated in USD, with the leading currency being stronger their value goes down. Troublesome… maybe, but explained by the strong USD, DXY is 10% up, so other values should go down a problem only if you need collateral … there it connects with the yield curve, looking bad for the economy 2023, 24. Great content… keep it up!

[@magahongkong4664]

Humm u speak like collateral is something of its own rather than being "other asset" u said. Matter of fact, anything can be collateral as long as it has a buy/sell market. The global financial system is a giant pawnshop. Collaterals are determined legible or not depends on the store owners (we call them lenders/creditors in the modern global financial system). Anything can be collateral. However, as the world entered geopolitical conflicts, we see more risk in normal businesses hence sales down, expense up, lower profit margin if not negative, lesser valuation. Because more risk, liquidity/cash funding is harder to come by. Productions are less efficient leading to nominal increase in price. That positive feedback loop (less cash/liqudity > higher risk/tension > less cash/liquidity > repeat) keeps making things worse.

[@tonewreck1]

exactly The lowering of the foreign currency reserves of all those countries is actually quite simple to explain. It is due to the valorisation of the US dollar. Foreign reserves are spread around various assets and currencies, but they are valued in dollars. So when the dollar goes up, the dollar part stays the same and the rest goes down in dollars, therefore the total goes down. It doesn't disappear in thin air.

[@tonewreck1]

The lowering of the foreign currency reserves of all those countries is actually quite simple to explain. It is due to the valorisation of the US dollar. Foreign reserves are spread around various assets and currencies, but they are valued in dollars. So when the dollar goes up, the dollar part stays the same and the rest goes down in dollars, therefore the total goes down. It doesn't disappear in thin air.

[@cambriawellness3102]

You mean valuation?

[@cambriawellness3102]

Did you hear the latest KlausScwabb platform that there won't be a global plan, ( since there's so much division in the world ). This was either to throw off the opponents, or to create two major currency denominations, the Western and Eastern, perhaps, with Russia and the Saudi's joining China, as has been observed. Jim Rickards says our US$ will remain a US$ but he didn't mention the adjustment in value. Is this to continue our petro$ wars? I wouldn't be surprised. They have no imagination as to what could be innovative instead of petrol based currency and hegemony.

[@tonewreck1]

@@cambriawellness3102 yes, english is not my first language...

[@georgesiew6203]

Good take but it's missing the other key implication of so much USD getting destroyed. An often-overlooked implication of global USD reserves is that they are a barometer of how integrated the world economy is. When the global economy is not well integrated the reserves barely exist. When the global economy becomes more integrated the reserves begin to grow. Contrary to conventional wisdom, the globe getting more integrated doesn't lead to more balanced financial flows but less balanced financial flows. This is because it is precisely the imbalanced flows that mean there is something to be gained by integration. Given the above, a decrease in global USD reserves means that the interconnectedness of the global economy is being unwound rapidly in very destructive ways. The shrinkage of the total float of global USD reserves by 7-8% over the past year or so is just the monetary side of the huge wave of de-globalization that started in earnest with COVID. What the inverted yield curves knows is that the process of de-globalization is just beginning and like you said the bulk of the pain is still ahead.

[@Blueridge-Doc]

Thank you

[@brunopadovani7347]

Will a reduction in global USD reserves result in fewer dollars circulating? If yes, does this work towards reducing dollar-denominated inflation?

[@georgesiew6203]

@@brunopadovani7347 It does leave fewer dollars circulating and that does make dollar-denominated inflation lower than it otherwise would be. However, the effect of that is already reflected. Clearly there are inflationary forces that are stronger than these deflationary forces. Or to be sensitive to the distinction between monetary inflation and non-monetary inflation there are non-monetary forces that push up prices which are stronger than these monetary forces that are pushing down prices. The reduction of USD reserves is not something that happens in isolation. It is a response to other fundamental forces in the economy. So, we can't just say well those are the monetary forces at play, and this is what they get you. We have to look at what is paired with the monetary changes since things rarely move in isolation. The real side of deglobalization is inflationary in that relative real costs for everything must go up (it must be more expensive for you to afford the same standard of living). The monetary side of deglobalization is deflationary in that money is being destroyed and money supply is contracting. You may ask which effect will be stronger? The answer is hard to know if you just count beans, but you can invoke the fundamental laws to get the answer easily. The net effect must be that inflation is stronger in the long run. The reason is, it is incoherent for something that is destructive to the global economy to give you a lower cost of living and leave you better off. That would be a "free lunch" or "perpetual motion machine" outcome, which we know can't happen. The perverse result of having deflation from deglobalization however can happen in the short run because ppl can respond to the monetary contraction by going into survival mode in the short run. In doing that they stop consuming anything. That will result in a supply glut which will cause deflation, but people can't stay in survival mode forever (that will grow exceedingly unpleasant over time). Eventually the glut gets worked off and people have to get off survival mode. Then we are in the long run where the cost of living must get much higher. This isn't the same as a spiraling monetary inflation cause by the collapse of confidence or persistent money printing so don't confuse the two.

[@brunopadovani7347]

@@georgesiew6203 Thanks for the explanation, George. Clearly two forces are at play. Supply chain realignments (bottlenecks and shortages, moving production to areas with higher cost labor etc...) counterbalanced by the inflationary and deflationary effects of increasing and decreasing money supply respectively. For whatever my opinion is worth, I don't think that inflation is necessarily a net negative, if it was caused by reshoring manufacturing back to the US. I'm willing to pay more for that.

[@georgesiew6203]

@@brunopadovani7347 There is one big misconception and I think in another of Jeff's videos he also points this out. That is that people don't appreciate the amount of economic prosperity that was brought by globalization. That prosperity was real, and it was massive. Just think of it this way. People think the Chinese benefited greatly from globalization. They went from a very backwards agrarian economy to an advanced industrial economy. Several hundred years of progress in the space of forty some years. That is definitely true, but would you really believe that on the other side of that the western economies did not benefit at all? That would make no economic sense. The Chinese were always in a position of lower bargaining power than the west so if there was any economic pie to be shared from collaboration, everything we know about economics would suggest that the Chinese got the smaller share. The issue with the west is that it squandered everything it got from this relationship and then some on the hedonism of the present. It didn't save anything because it thought there would always be a free lunch. Today if we undo globalization, the Chinese get to keep their cities and development. They lose a productive source of income for a time, but they were close to exhausting the benefits of this partnership anyway. The west on the other hand has already spent everything they got from the relationship. There isn't anything more coming in for a society that is used to so much over consumption. The issue isn't that prices are going to go up a little bit. They probably will go up a lot. But that isn't even the issue. Prices will do whatever they have to do. The real limiting condition for the real economy is that consumption has to come way down. So, no life won't be just a little bit different after deglobalization. Life will be a lot different. People will have to rediscover the frugality of their grandparents.

[@SpinStar1956]

Thanks so much for helping us both become aware and to make us understand what it all mean! 😄

[@deanpaterson3219]

I learned a new understanding of the economic issues from your video. Thank you for this video.

[@Zoofactory]

Thx Jeff, this content is like no other.

[@Syltibob]

Great episode. Jeff is the best!

[@icecoldporksoda3461]

Jeff, I have a few questions about your video. You have done a great job explaining how we know that these reserves are being destroyed. My questions are, what is the mechanism for their destruction and why are they being destroyed? I’ll try watching the video again to see if I can answer my own questions, but if you could clarify that would be great.

[@josephgunter6722]

destroying $reserves is how they reduce inflation. more dollars means our things cost more. less means less, so they flooded world w/ cheap dollars, now theyre taking them back. it reduces inflation. its a brutal way of doing it for sure. wish they could turn the spigot on more slowly, therefore off more slowly, but i'm sure 'someone' would make less $$ that way......

[@PJ-cj4uv]

Perhaps they are bonds created as part of a QE program being 'extinguished' by a central bank

[@Digrrr]

CBDC - all by design

[@travelsouthafrica5048]

I think this might help you understand some more kzbin.info/www/bejne/eqq5YYKciphgfLc

[@tonewreck1]

The lowering of the foreign currency reserves of all those countries is actually quite simple to explain. It is due to the valorisation of the US dollar. Foreign reserves are spread around various assets and currencies, but they are valued in dollars. So when the dollar goes up, the dollar part stays the same and the rest goes down in dollars, therefore the total goes down. It doesn't disappear in thin air.

[@danb1618]

This is outstanding! Great research on FX reserves evidence.

[@cas343]

Why markets are upset? > hot war in Ukraine. >Every pension system in NATO was priced for 8% interest and after 20 yrs of less than that are bankrupt. > energy/supply shocks Edit: *Also foriegn debt is denominated in dollars. High interest rates will destroy foriegn markets.

[@Ladida386]

I've learned a thing or two from you. You really understand this topic. Thank you 👍

[@jmarie1959]

Thank you Jeff! I hope Nicole goes easy on you tonight/tomorrow. Take care everybody!

[@Applepie409]

???

[@phazon6179]

fantastic video once again, greatly appreciated in these tough times

[@jayski9410]

Isn't it possible that much of that money was converted into gold reserves? Which makes tracking it much harder since most nations, central banks or sovereign wealth funds would rather others not no known how much they have. It's almost like governments are opting out of the fiat money systems that they themselves sponsor.

[@hansvanrostenberghe3514]

I had the same ideas crossing my mind, listening to the video

[@tonewreck1]

The lowering of the foreign currency reserves of all those countries is actually quite simple to explain. It is due to the valorisation of the US dollar. Foreign reserves are spread around various assets and currencies, but they are valued in dollars. So when the dollar goes up, the dollar part stays the same and the rest goes down in dollars, therefore the total goes down. It doesn't disappear in thin air.

[@bigqueue]

Thanks much for the updates, I'm absolutely beside myself with all the information you have taught me over these years.

[@ghost101049]

The information you are presenting is solid and you do the presenting well. Slight suggestion, more graphs please. It really helps convey the info and gets away from "the talking head" that too many people do.

[@eymeeraosaka2954]

Most of the reserves are in USD. And with USD at all time high, the only way money can be destroyed in those countries is they sell USD and buy their own currencies? Is there evidence this is happening? My guess is that a lot of the reserves were invested in Gold. But you may ask, why is the Gold price not up then? The reason is because the the Gold Indices are paper gold and manipulated. They Central Banks bought physical Gold...

[@drunvert]

If they invested in crypto then their money disappeared

[@missfits4780]

@@drunvert No I don't think it did. This is simply money changing hands - neither creation nor destruction.

[@drunvert]

@@missfits4780 yes. Someone has it

[@Utubeisassho]

Canada is the only Nation w/ zero gold in it's Central Bank

[@drunvert]

@@Utubeisassho Canada is run by toddlers

[@RemusKingOfRome]

THANK YOU Jeff ,for your warning, stepping back to see the wider problem makes more sense to Plebs like me. :D

[@braddeal6445]

The problem with a managed economy is that it will not react rationally. Weird things will manifest that cannot be predicted. I’m sure the FED’s super AI enhanced brainiac computer is trying to forecast the economy but it’s too subjective, too unpredictable. Expect the unexpected. And it ain’t gonna be pretty

[@hill2750]

I think you might be giving them too much credit. I'm pretty sure they are working with the Bureaucracy OS.

[@mkaberli]

It seems to me that an economy based primarily on manipulation (by crooks and politicians) is a catastrophe waiting to happen, but since I don't have a PhD in economics from some prestigious university (or any university for that matter), what do I know? By the way, what ever happened to Capitalism?

[@rcmrcm3370]

Over the long term has there been any economy that's reacted rationally to everything?

[@DrRock2009]

Complex systems can’t be modelled…🤷‍♂️

[@philfortner1805]

There is no AI just alot of normalcy bias and the belief that money printing can go on beyond their current term. Short term thinking is what started this whole disaster in 1913.

[@Nothing-ns7tf]

That was very imformitive Jeff,thanks for that. But what about some sort of strategy to take advantage of this situation?

[@BlueWaterSTAX]

Stick a fork in the financial system. It's DONE. Get your money out of the banks and into hard assets ASAP guys. Get precious metals ASAP before the Central Banks buy it all

[@terryli340]

Sooooo creepy out there! Alway a great video and eye opening. Thank you!!!

[@dethray1000]

been hearing this same thing for 50 years--and things stay the same ---if you have debt your going to get hurt but always been this way

[@jackgoldman1]

I had cancer. The medication kept the symptoms gone but the tumor grew. I needed painful surgery, radiation, more surgery. America does not need lower interest rates as medication. America needs surgery, higher rates, to bankrupt the non profit Big Tech companies. Big Tech needs to make a profit. Time for surgery, not medication. We need to bankrupt some lousy companies. Will we? Can we? That is what Powell must do, surgery, not medication.

[@nickm1727]

This is the perspective I was looking for! This is a global economy, not just "will the Fed pivot or not" like everyone else reports. Big liquidity crunch coming that will hit the markets hard

[@despoticmusic]

I looked down the back of my sofa - the missing trillion isn’t there... It’s not all bad news though; I did find a green M&M 😂😂😂

[@dmenace9288]

Interesting take. Thanks. Was always wondering about this, but youve taken time to gather the information thanks.

[@stevenbonebrake]

I love seeing "Jerome Powell" listed as a member at the end of these videos! 😆

[@andrevdmerwe4163]

Thanks for sharing the hard core data behind the thesis. wow!

[@GeoBrown-qe7pd]

A great commentary of our times !!

[@kevinprice2831]

❤ Brilliant - Jeff.

[@Peter-wt1lk]

Would I be correct in thinking money being destroyed equals deflation as less of that green stuff to bid up prices?

[@tubesoupio]

Currency, not money.

[@yessyesss7743]

Excellent analysis !!!!!!

[@leejacobs8887]

When you hear the voice of someone that knows what is going on the voice inside you tells you pay attention you might just learn something. Things aren't what you would like them to be but are what they GOING TO BE. Reg from South Africa thanks Lee

[@leejacobs8887]

Thanks for your 😉 great program it gives me the NOW down side but then there is always that ( FOR 2 YEAR'S ? ) UP SIDE that sounds great. I am 80 years old now so ( if possible give me a ( pensioners discount - 1 year ) one never knows when you going to clock out. Reg Lee from South Africa

[@johnnysteradactyl558]

Take care with an attitude like that though!

[@BobEstler]

Thanks Jeff. very interesting topic. My brain hurts but I learned a lot.

[@josephgunter6722]

awesome jeff. u are the man. thx much!! batten down the hatches

[@USAACbrat]

For years interest rates were artificially lowered for a variety of reasons; rates will come down but not to the artificial level as before. Realistic interest rates will prevail at around 3%.

[@tomc4304]

God bless you Jeff.

[@simonfowler698]

Amazing, thank you Jeff!

[@graemelee5701]

Thank you, Continue to seek the truth, find the truth, speak the truth. Beware of anyone that does not.

[@WarrenRoddy]

Jeff, the Nasdaq 100 added $1.1T in market cap just today. Why couldn’t many of those ‘vanished reserves’ have been invested in equities?

[@ericmaclaurin8525]

CPI is going down because it's a lagging indicator made up of data that isn't a complete mystery. Inverted yield curves are normal during an inflation spike. High interest rates are the biggest risk by far with trillions in debt. It has to be fixed at any cost and will be. Bet agai st it at your own peril. This isn't about the feds eye. It's about keeping the payment on national debts low enough to afford.

[@jairomoreno4259]

Hi jeff, great video as always, I have a question: How much of FX Reserves disaccumulation can be atrributed to outright sales rather than market price losses?

[@SportsIncorporated]

alternate Eurodollar University college fight song: kzbin.info/www/bejne/e16zY6SCaNaesM0 kzbin.info/www/bejne/lZLacntjf6-rZ80

[@thethan3]

Jeff, have you considered that the missing money isn't being destroyed but is instead being converted to commodities (Gold) via private sector entities?

[@maureennewman905]

Wouldn’t surprise me

[@wonderwoman497]

Creative accounting inflating asset balances

[@charlesbrown9213]

SYNOPSIS OF VIDEO : "Something big and bad is going to happen. I have no idea what it is, or when it is."

[@wageslave387]

Might as well be reading Zero Hedge tbh.

[@bradspaugh9827]

Ben Bernanke got a nobel prize in economics.

[@Stopinvadingmyhardware]

Which isn’t actually a thing.

[@jameswynn4699]

Yes dollars aren't coming back in stock markets in the US but I would argue that money had come back in terms of food and energy costs

[@bertclements]

Thanks Jeff, awesome!

[@Crypto-mr3hg]

Thanks ✌️

[@asdf3568]

So how does the dollars get destroyed?

[@darinthesecularspiritualist]

weatherman now, i like it. you are talented

[@brunoruegg2172]

why do you have empty frames hanging on the wall? any meaning?

[@educosta21]

Do these numbers include mark to market losses in bonds and sales?

[@jaywhoisit4863]

So where does the dollar value go in this case? Less dollars. Lowering demand for US treasuries. However dollar demand as seen from the Eurodollar side of the equation remains high. This is confusing!

[@Jack-hy1zq]

I'm new to all this...they kept us little people away from learning how money works. I'm picking things up one piece at a time. Thanks for the video. This is my question: How does this (clearly imminent) monetary hurricane relate to the (seemingly imminent) end of fiat currency and the currency reset - the switch to centralised digital currency - alla WEF? In your video, are you explaining the fine details of this dynamic?

[@gordonstanley7802]

Who is "they"? And do they control your high school curriculum?

[@Jack-hy1zq]

@@gordonstanley7802 Our classrooms were veritable hotbeds of monitory meanderings. I guess I just didn't pay attention smh

[@tonewreck1]

The lowering of the foreign currency reserves of all those countries is actually quite simple to explain. It is due to the valorisation of the US dollar. Foreign reserves are spread around various assets and currencies, but they are valued in dollars. So when the dollar goes up, the dollar part stays the same and the rest goes down in dollars, therefore the total goes down. It doesn't disappear in thin air.

[@spirobel]

I dont understand what you mean by "disappear" or "money is being destroyed". Please explain this concept further! I mean the money needs to go somewhere, right? Or do you mean it is flowing into treasuries and therefore it is not available for the economy as money?

[@coolcatool]

22:22 wow , Jerome Powell your channel's member. Gr8👍

[@samdog_1]

Great opening metaphor....

[@vyotechnutritionals]

Fantastic video!

[@markgreenstreet6111]

I have the feeling that this is extremely important. Sadly, my comprehension of where and how this money is moving to, is beyond my ability to grasp. Is this money going into a separate 'reserve fund' that will used to reduce bond yields at the front end in a spectacular and fast way, to compensate for QT? Or is QT itself absorbing these stray reserves, with roll off? Something else?

[@RemusKingOfRome]

The inversion tells us Powell will break something with higher rates. If Powell pauses rate hikes at current (sane) levels, the inverion will probably be removed ? Inflation will come down on it's own - food prices in Australia are already coming down to pre-inflation levels.

[@incawarrior5470]

Powell has no power, he never did.

[@josephgunter6722]

jeff, isnt the point of $ reserve destruction how inflation is reduced? can you illustrate/emphasis on what the EXPECTED reserve amount is VS the amount currently, as in how many $reserve existing @ 3% inflation annual is what our current reserve$ should be (from a point in past history that is NOT in a correction cycle, compared to what it is currently. i.e. how many $ have to be destroyed, to put as 'where we should be' w/ 3% inflation? hope i'm clear..ish on this

[@tonewreck1]

The lowering of the foreign currency reserves of all those countries is actually quite simple to explain. It is due to the valorisation of the US dollar. Foreign reserves are spread around various assets and currencies, but they are valued in dollars. So when the dollar goes up, the dollar part stays the same and the rest goes down in dollars, therefore the total goes down. It doesn't disappear in thin air.

[@ChatGPTLeader]

Investments in stocks, bonds, gold, crypto are all down a lot this year while the dollar is stronger (making dollar investments in other countries’ assets go down). Do the foreign currency reserves include these investments?

[@Anubis-hm7ro]

I’m buying a new furnace. The price is expected to go up 12-15% in Jan 2023. Price just was raised 10% in September. I think I’ll buy soon.

[@davidlasoff8261]

What a cliffhanger, Jeff! Great question, what could it be that's so bad that Jay quickly reverses the rate hikes? Jeff, give us a suggestion or two!!!

[@magahongkong4664]

We got a few. Jay focuses on CPI and employment. We are seeing some layoffs and inventory stacking up. But most importantly, a blow up in some financial institutions are certainly the best wake up call for Jay and his stupid goons. UK having problems w/ pension funds so I bet US pension funds are following. It's not hard to predict. Pension funds since 08 got less and less yield on investment. They have 2 choices, go for other investment besides the safe investment in government bonds they are mandated to buy or borrow a hell lot more to buy more government bonds on bigger volume so if a UST yields 1%, they would buy 10 UST yielding 10% total. How would they do that? Easy, they buy 1 UST, throw that UST into money market fund to borrow short term cash and buy more UST then repeat the process. Short term rates are mostly variable. If they used to borrow @ 1% and buy long term UST yielding 3%, now short term goes up to 4% and it's on variable rate, they have to put up more cash or get margin called. Supposedly they get margin called and lenders confiscate collateral to sell out fast to recoup the most they can, next time when that borrower borrow again, the interest rate goes up because he was reported in the system as riskier. So you see it, massive selling pressure from foreign public sector leading to potential margin call on leveraged positions. If pension funds these days don't leverage up their safe investment, they would go to meme stock and crypto to generate higher return. Suddenly, reality hits and all those Lalaland stuff crashed. It might happen very soon. To me, I can see that pension funds, retailers and consumers will be hit with reality. That's when Jay has to reverse course. Right now, pension funds and many depository institutions are bailed out by the Fed through RRP. I think at some points, when the Fed get forced to stop RRP, that's when all my points above could become reality.

[@gbabayan]

Pretty sure he’s talking about the treasury market becoming illiquid

[@johnkla7866]

False Flag...just wake up it's all connected. If and when it happens in the coming weeks at least you'll know why...

[@c.p.haslop2500]

@@magahongkong4664 Wells Fargo

[@davidphelps]

That's called the old Swiss Miss. Goodnight everybody.

[@heinzzimmer5401]

Hi in case of Switzerland- pls look at the BS, draw down of the 1 Trillion in US equities portfolio and fx exchange caused a loss of app. 145 billion = yes it disappeared but the money was not in circulation, easy come - easy go ! Heinz

[@ThaiNativeGems]

Awesome video and explanation Jeff! Money disappearing 'poof' making $ shortage worse around the world. Tic toc, tic toc, "who" will require more $ collateral to sure up their balance sheets in the coming days, that is the question?

[@friend757]

Will the dxy rebound higher sharply? It has been dropping insanely on Thursday and Friday.

[@ThaiNativeGems]

@@friend757 I wish I can predict the market short term and it is unreasonable to think anyone can. Also nothing goes up or down in a straight line. Dxy already had a great year and was surprising how fast other currencies were dropping. So some relief rally was predictable. But with all warning signs out there as Jeff keeps pointing out for years, I won't bet against Dxy in next year or so

[@friend757]

@@ThaiNativeGems Thank you.

[@dave0126]

The Case of the Missing Money Part 2?

[@timnisbet2078]

Just great info !!

[@Gabber44906]

I am shocked our current banana republic is allowing these videos to be shown How long will it be before these great videos are banned? Thanks Jeff!

[@issenvan1050]

How does it vanish? Is it mostly USD?

[@timrenner9864]

The Australian numbers look wrong, Sept 2022 is higher than Sept 2021. EDIT: all foreign reserves not just USD

[@TwoGrainsOfGold]

Hi 👋 have you looked at the wcu (world currency unit) flows? I have been noticing the xdrwcu cross-rate be the balancing out factor between various currencies since about thanksgiving time last year 2021. It’s like if usd needs to go down then I see a massive spike in xdrusd & then later on a drop on the xdrwcu like someone swaps dollar for SDR then they take the SDR and swap SDR for wcu. Do check it out since you’re a professional in this area. I’m a doctoral student and just been watching this going on on the charts. Thanks in advance 🙏🏼

[@jerrychandler657]

Interesting take. Raising dollar rates lowers the amount of Eurodollars and helps with inflation from the other direction.

[@maywang8288]

This is a very strange video. When you talk about the reserve, I think it must mean the total reserve a country has had. When the USD is appreciating relentlessly, the assets held in the other currencies within the reserve must be marked down in $ by a lot. It is very strange that you didn't mention that.

[@donotreportmebro]

When talking about USD reserves I always assed they had actual USD. For example Russia just paid 140mln in USD to Iran bringing those USD by plane.

[@maywang8288]

@@donotreportmebro How could that be true? Both are being sanctioned, no USD for them.

[@peters972]

This is US dollar reserves in foreign lands. In a foreign land you mark down the local currency relative to the US dollar. You can’t mark down the US dollar relative to itself!

[@chandlerbing700]

Hi from India. India forever is more than the figures u hv mentioned but I think u may be right , I don't know. Also no sign of India slowing down economy wise. Everyone working fullest capacity and lot of demand.

[@wouldyoudomeakindnes]

I know the reserve food in my freezer is also going down, this is spreading very quickly

[@warntheidiotmasses7114]

So are these countries buying Gold? Or did these countries lose foreign reserves on US Treasuries going down in price?

[@shadym1lkman]

Could you elaborate on 'destroyed'

[@borutstariha4231]

Central banks do not hold only USD, but also other currencies and as that part of their foreign reserves is worth less (because it is measured in USD, whose exchange rate rose against other currencies), foreign reserves(measured in USD) are lower. ))

[@livinglifetothefullest22]

They are NOT MISSING!! You can find them at the WEF!!!

[@TheLosrodri]

Jeff - nice vid, thanks for the info; any thoughts on Saudi Arabia at +15?

[@LECOMAYAGUA]

What amazes me is that short and long term interest rates are so low...

[@otopalov]

Jeff, the question I am asking probably reveals my ignorance about the central banks accounting. Nevertheless, is it possible that the decline in the CB reserves is due to "mark to market" accounting for their duration US treasures holdings? We know the long US bods (TLT, EDV, ZROS) have declines north of 20-30%.

[@magahongkong4664]

GAAP is based on actual transaction, not market value. If he doesn't sell yet, that's not a loss. As long as the stream of periodic interest payment comes in periodically, there is no credit risk so the Fed's balance sheet does not go down based on that. Unrealized gains and loss generally shouldn't stay on income statement.

[@tonewreck1]

The lowering of the foreign currency reserves of all those countries is actually quite simple to explain. It is due to the valorisation of the US dollar. Foreign reserves are spread around various assets and currencies, but they are valued in dollars. So when the dollar goes up, the dollar part stays the same and the rest goes down in dollars, therefore the total goes down. It doesn't disappear in thin air.

[@Mark.S.Hamilton]

This is painful to listen to. Did he even listen to Powell's press conference?

[@BoeserWolf1977]

Hi Jeff, Please let me ask the ultimate stupid question: What is the problem of reserves going down? In my simple world view, the reserves of the countries are just sitting around doing nothing. When they are "released" to move again freely within the markets, should this not be good?

[@aidanallen1976]

increases inflation?

[@HahaDamn]

God. Banks do not lend out reserves. The amount of reserves held by banks is a regulatory requirement - in Australia for example there is no reserve requirement.

[@BoeserWolf1977]

@@HahaDamn the question was related to the Government foreign exchange reserves

[@HahaDamn]

@@BoeserWolf1977 I just checked the RBA foreign reserve assets - there’s been no significant change since 2021 to now, what is he even talking about www.rba.gov.au/statistics/frequency/reserve-assets.html

[@HahaDamn]

@@BoeserWolf1977 also, what is he talking about “dollars dropping off the ledger”. The RBA doesn’t physically have USD, it has an account with the FED, where USD is held on its behalf, if the RBA sells USD for another commodity or money, the FED marks down its account, and marks up the account through a request to a private bank likely of whoever the buyers was to their account in the USA. The money can’t literally vanish unless it’s physically held, which foreign currency reserves are not. If you want to know why stock prices or houses aren’t going up it’s because tax receipts are higher due to higher nominal prices and wages due to inflation, which acts as a negative feedback on economic activity in the US due to progressive income tax brackets, sales taxes etc.

[@phils5650]

Great analysis. Is it just the reduction of asset values with the end of the wealth effect. IE no more low rates and less QE.

[@jean-marcducommun8185]

Frankly I don’t get it. According to my understanding money always has two entries: “I own you - You own me”. Asset values can be destroyed but money in the form of bookings can’t. So you tell us that substantial amounts of foreign reserves “disappeared” from the books of India, Japan etc. Didn’t it happen because those countries used their FX reserves to shore up their proper currencies? This is the only way I can imagine the sudden “disappearance” that seems to have taken place and that fits into the global picture.

[@andrewwood2313]

I heard it cost upwards of 40 billion to get a seat on the spaceship

[@mattpkp]

Highest central bank gold purchases on record in 22. Things are just getting warmed up