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Zoltan! US Greenback Buying Energy For Customers Sinking Quicker Than The Titanic As Zoltan Pozsar Suggests Bretton Woods III With Cash Backed By Commodities


by confoundedinterest17

Zoltan!

(Forbes) – Credit score Suisse’s Zoltan Pozsar argues Bretton Woods II crumbled when the G7 international locations seized Russia’s overseas alternate reserves. Holding cash inside monetary establishments just like the IMF was thought-about danger free. That’s clearly not the case. Equally, Bretton Woods I collapsed when Nixon took the US of the gold customary again in 1971 when {dollars} have been convertible to gold at a set alternate price of $35 an oz. This led to Bretton Woods II, backed by “inside cash” or the greenback, which itself isn’t linked to gold or another commodity.

Now the idea of this method, which has operated for the previous 50 years, is being known as into query. The sanctions on Russia, which confirmed that reserves accrued by central banks can merely be taken away, raised the query of “what’s cash?”

That query could clarify why Pozsar believes an enormous shift in the best way the world organizes cash and reserves is now underway, “making a “Bretton Woods III backed by outdoors cash,” (gold and different commodities). Together with crude oil and bitcoin.

A minimum of crude oil has fallen under $100 as Biden merrily drains the Strategic Petroleum Reserve (SPR). Gasoline costs have fallen barely as that is being completed earlier than the midterm elections with political, not financial, intent. As soon as the midterms move, will Biden proceed draining the SPR till there may be little left forcing the US to transform to “inexperienced power”?

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The buying energy of the buyer greenback took a plunge underneath Biden as different commodities reminiscent of Bitcoin and crude oil soared.

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Another asset, gold, have typically risen underneath Biden’s Reign of Error, however significantly after the Russian invasion of Ukraine.

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Politicians like to spend cash, typically recklessly. And with The Fed monetizing Federal authorities expenditures, the buying energy of the US greenback for shoppers is sinking sooner than The Titanic.

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