An excellent read that pinpoints the vulnerabilities of the EU that a case can be argued was planned by one faction in the US that realised pumping dollars into the Eurozone ad infinitum was unsustainable and likely to destroy the Fed before the ECB.
So Trump 1.0 installed Jerome Powell to prepare the roll out SOFR as the US dollar benchmark, removing control from Europe and the massive offshore 'Eurodollars' pool which was benchmarked by LIBOR. This became nailed down the moment Powell secured his second term in the early Biden administration and then immediately hiked interest rates which has seen a capital outflow from Europe and the UK, and forced the BoE and ECB to buy US Treasuries to maintain an inverse yield curve.
Those who claim the UK left the EU in 2020 should look at the current positions of the BoE and ECB and concede that their monetary policies were nearly perfectly aligned and remain so to this day
So now with Trump 2.0 due on January 20th, capital is flowing into the USD leaving the UK and EU with a massive position in US Treasuries and depleted FX reserves, a cupboard stripped bare of collateral and a commitment to an energy policy that everyone can see is not worth the hot air Ed Miliband exhales telling anyone left listening about Britain leading the way to net zero
I would think the EU is in the more vulnerable position because it has a fractured bond market whereas the UK can at least use repos to keep its banks liquid even if inflation rises as a result.
So once Trump is inaugerated, how long before the BoE look to do a deal with the Fed for dollar swap lines to provide some much needed dollar liquidity, and with that the UK finally exit the EU ?
An excellent read that pinpoints the vulnerabilities of the EU that a case can be argued was planned by one faction in the US that realised pumping dollars into the Eurozone ad infinitum was unsustainable and likely to destroy the Fed before the ECB.
So Trump 1.0 installed Jerome Powell to prepare the roll out SOFR as the US dollar benchmark, removing control from Europe and the massive offshore 'Eurodollars' pool which was benchmarked by LIBOR. This became nailed down the moment Powell secured his second term in the early Biden administration and then immediately hiked interest rates which has seen a capital outflow from Europe and the UK, and forced the BoE and ECB to buy US Treasuries to maintain an inverse yield curve.
Those who claim the UK left the EU in 2020 should look at the current positions of the BoE and ECB and concede that their monetary policies were nearly perfectly aligned and remain so to this day
https://www.statista.com/statistics/246420/major-foreign-holders-of-us-treasury-debt/
So now with Trump 2.0 due on January 20th, capital is flowing into the USD leaving the UK and EU with a massive position in US Treasuries and depleted FX reserves, a cupboard stripped bare of collateral and a commitment to an energy policy that everyone can see is not worth the hot air Ed Miliband exhales telling anyone left listening about Britain leading the way to net zero
I would think the EU is in the more vulnerable position because it has a fractured bond market whereas the UK can at least use repos to keep its banks liquid even if inflation rises as a result.
So once Trump is inaugerated, how long before the BoE look to do a deal with the Fed for dollar swap lines to provide some much needed dollar liquidity, and with that the UK finally exit the EU ?
There is another Sniff Test in the arguments you present here John.