The world is awash in dollar liqudity that no one wants

Bloomberg/Tracy Alloway

Repost from 9-7-2021

photograph of many $100,000 stacks of $100 bills

“For years, the premium paid for dollars over the euro, Japanese yen and so on in the cross-currency markets has been negative, indicating rampant demand for greenbacks. Now, these so-called cross-currency basis swaps are on the verge of turning positive in a major shift for money markets.”

USAGOLD note: Credit Suisse’s Zoltan Pozsar, the acknowledged expert in these matters, is quoted extensively in this article. The Fed, he says, is doing QE faster than the BOJ or ECB and therefore the world is awash in dollars looking for a place to call home. Though gold is not mentioned, it seems logical to think that eventually it would become a beneficiary in a world where no one wants the greenback.

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