How The Fed Destroyed The Offshore Dollar Market
The Three Step Plan
The following twitter thread presents what I have, in the past, presented as the views of Tom Luongo. Where this analysis originates I don’t know, but it comes highly recommended by Luongo. It’s pretty lucid. Key to the importance of this presentation is that use of the Offshore Dollar Market was the method by which the WEF amassed so much clout throughout the world. Whether or not the Fed intentionally set out to undercut the power of the WEF, that is in fact the effect of this Three Step Plan.
🍊Phil (#PowellisMyPal) Gibson🦚
1/10 THREAD How the @federalreserve Destroyed the Offshore Dollar Market (ODM) in 3 Steps
Step 1: US banks stopped accepting Eurodebt as collateral in Jan 2019, causing the repo spasm that Fall. No collateral means Davos can’t get dollar reserves in exchange to lever up
2/10 Meaning Davos cantaloupe get dollar reserves to fractional reserve-print more money than the Fed itself bc ODM is outside the Fed’s jurisdiction. No reserves means no more printing of Eurodollars (AKA: the beginnings of the death of the ODM).
3/10 Step 2: At the June FOMC meeting in 2021, Powell raised the Reverse Repo Payout Rate by 5 basis points and opened foreign repo facilities. This removes $1.7T of base 0 money/dollar liquidity from the global economy, further increasing demand and strengthening the dollar.
4/10 Step 3: Starting Jan 2022, all newly issued US domestic debt is re-indexed from LIBOR to SOFR, removing US exposure to Eurobank balance sheets. Before SOFR, if LIBOR rates blew out, Americans would have to socialize European losses via higher credit card rates/mortgages etc.
5/10 Now with SOFR, American pockets don’t suffer from this financial contagion of being tied to Europe’s ball and chain (LIBOR). This also helps give the Fed more room to raise rates as high as a target as 6% as @DiMartinoBooth has mentioned.
6/10 For more info on the importance of SOFR, see my playlist of J.P. Morgan’s podcast Making Sense & their series “Leaving LIBOR”👇
7/10 All 3 steps enable the Fed to destroy the ODM, cause Capital flight to flow into the US & gives Powell the ability to raise rates by no longer having the exposure to toxic and hindering European debt liabilities.
8/10 The Fed will have officially gained back its monetary independence. These actions demonstrate how the Federal Reserve is officially off the reservation. A “normalcy” in inflation, employment, and price stability will be a mere byproduct of the intended goal.
9/10 Whether or not destroying the ODM is the Fed’s intended goal is a fair question. However, Powell and current/former Fed officials dare not say, or else they suffer a severe political loss. They are trying to preserve credibility in not only themselves, but the Fed itself.
10/10 Ergo, they must tread lightly. As @TFL1728 says, what’s more important is to watch what they do, not what they say. Based on the above, if one thing is for sure it’s that the Fed’s boogie man is definitely not inflation…
To quote JWB, "This thread is outstanding." The goal or the Fed is to be rational. If, as has been suggested, they are following the New York banks, it is because the New York banks are scared. Europe is a basket case. Our government is running wild, forgiving loans and spending money that doesn't exist, all the while discouraging productivity. Preserving some sort of a rational economy, even if only in America, is essential, and everything else will fall into place. There will be hardships, but there will be hope.
This is really good, accurate (I believe), and is in 100% agreement with what Luongo has said. This is a very strong argument against the CTH theory that the Fed is in cahoots with the European central banks. Quite the contrary. I would recommend, however, reading the full Phil Gibson article rather than the Twitter thread. The content is the same and the article is clearer and easier to understand. You won't have to wonder what a "Cantaloupe" is.
Thanks, Mark!