The Death of the Eurodollar System | QPOL Issue #39
The Death of the Eurodollar System | QPOL Issue #39
How the Fed is establishing its monetary independence.
The CME (Chicago Mercantile Exchange) is ending Eurodollar Futures trading. What does this mean and why is it a big deal?
For years the Eurodollar Futures Curve has been the leading indicator on when the Fed was going to pivot. Basically, it’s the market of offshore dollars placing bets on when they were gonna make the Fed cut rates and bail out their fiat actions of mal investment and financial degeneracy. Now the tables have turned.
Starting June 30th, all trading of Eurodollars will end as the phase out of LIBOR (London Interbank Overnight Rate) takes full effect and is officially replaced by SOFR (Secured Overnight Financing Rate). What’s the significance and relationship of these debt indexes?
LIBOR is the benchmark rate that eurodollars (offshore/leveraged up dollars beyond the Fed’s jurisdiction) are indexed to. LIBOR is an unsecured rate which is decided arbitrarily by 18 panel banks at the City of London which has dictated US monetary policy since 1984 (You read that date correctly. It is not a typo. Yes, I know. Quite haunting, yet appropriate, isn’t it?).
If you do a search on the LIBOR scandal, it becomes pretty clear that you have a cabal of globalist central planners dictating US monetary policy at the expense of the American economy. Until January of 2022, all US domestic debt was indexed to LIBOR. Meaning - if there was a freeze in the credit markets in Europe and their economy caught a cold which caused the LIBOR rate to shoot up (as an expression of risk), then the American economy would catch that cold too. As an American consumer, you would feel that pain in your credit card debt, or your mortgage, or any other source of debt because Europe’s financial markets were too fragile. We were all tied to the globalist ball and chain that was LIBOR.
SOFR on the other hand is a fully securitized rate. Unlike LIBOR, it’s actually indexed by real market activity between financial institutions and money markets that solely domestically focused to the American economy. It’s as close as you can get to a “free-market” rate.
How does this all relate back to the CME ending Eurodollar Futures trading? Until June 30th, Eurodollars are still indexed to LIBOR. After that they’ll be indexed to SOFR. This means that all LIBOR liquidity (globalist offshore money) will be fully drained and replaced by SOFR. This will enable a pricing of debt that’s fully represented by America’s domestically focused and dominant economic activity, rather than the complete opposite which was LIBOR. Ultimately, this is how the Federal Reserve takes back complete control of its monetary policy.
As I’ve mentioned countless times before, the Fed hasn’t been easing rates to combat inflation. That was merely an excuse for the actual goal: destroy the creation of offshore dollars, AKA the Eurodollar system, shadow banking system, or the offshore dollar market (which I’ve coined the acronym for as the “ODM”).
The creation of offshore dollars long been the culprit of the means by which Davos funds wars, overthrows governments, exacerbates the drug cartel, finances the creation of experimental gene therapy “vaccines” on the masses, and disseminates the flow of foreign capital to wreck the US economy by inflating bubbles during times of ZIRP. As Zoltan Pozsar discovered, the ODM is what ultimately caused and knocked down the dominos of the Great Financial Crisis of 2008.
The Fed under Jerome Powell is taking an America First approach to monetary policy. It’s policy such as this that preserves the creation of private capital via the issuance of loans by the major commercial banks and their maintaining of the monetary transmission mechanism. It’s either Team Fed under Powell preserving the concept of capitalism, or bending the knee to the likes of Lagarde at the ECB who seeks a monetary policy driven by climate change which slingshots a communist dystopia under one central bank that institutes MMT as the status quo. Through this new monetary policy under Powell, America will become financially and monetarily independent as credibility is restored.
~ Phil Gibson
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