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Is the U.S. Dollar in Crisis? Exploring Currency Markets, Inflation, and Bank Downgrades

Blog Dec 19, 2023

Lynette answers questions about the potential crisis looming over the U.S. dollar. 🇺🇸💸 Join us as we dissect the complexities of currency markets, inflation, and recent bank downgrades, shedding light on the challenges facing the financial system. From the impact on regional banks to the global implications, we navigate through the signs of a currency crisis. 🌐💼 Are you prepared for what’s ahead? Tune in for crucial insights and stay informed!

 

CHAPTERS

0:00 Is the US dollar in crisis
0:20 The currency markets and the downgrades
3:44 You mentioned Moody’s, how many rating services are there?
4:33 So what do you see happening with regional banks in the future with this downgrade?
6:20 Why do they raise rates versus lowering rates back and forth to begin with?
7:46 What do you see happening when they lower rates?
8:36 What typically happens first when the public starts to lose confidence?

 

VIDEO TRANSCRIPT

00:00:00:00 – 00:00:26:05
Unknown
US technical word, soup. We don’t have to do this. We have enough in the can if you want. Wanted to wait on it. I’m still here for two more weeks. Okay, But very safe.

00:00:26:07 – 00:00:56:05
Unknown
Did you use those entries? Both of them. Were they good the way they were? It pretty much. I mean, I always put a little ad lib in there, but. Yeah, Yeah. So I definitely had questions about the little corporations. And I did modify the second one to in clude the deflation because I knew that I was going to talk so much about that and so I just modified it just a teeny bit like the very first paragraph.

00:00:56:07 – 00:01:25:11
Unknown
Okay, so this one, how come you’re here and Randy’s not to do? I’ll tell you. He’s at Hobby Lobby. No, he did not tell me. Why do you go to Hobby Lobby? He needs a background for you. Background? White background. Yes, for here. So this right. And we’ll go out September 20, 27, just letting you know we’re like, way ahead.

00:01:26:09 – 00:02:18:01
Unknown
well, okay. That that’s what I said. If you unless you want to cut it into snippets for ticktock or for whatever to you, I’m prepared to go in any direction. Let me look at this topic here. yeah. No, it’s too pantsed deflation versus inflation. Did you talk about what happens with gold during deflation? Hell, yes.

00:02:18:03 – 00:02:49:07
Unknown
Quite a bit. All right. We talked about the dollar last time. Yeah. Remember what you think is really what do you think is really bigger than a currency crisis? We could get into why you believe there’s a currency crisis, and then I could just go all around from there. Rock n roll entry to. Okay, let’s. Let’s do that, because that’s a timeless one.

00:02:49:07 – 00:03:18:12
Unknown
So do a normal intro and say we’re going to talk about currency crisis. Yeah, okay. Why there’s a printed racist or something like that in the U.S. or What do you think? Well, I think right now there is more of a currency crisis in Japan that’s the one that’s like really standing out to me. And since Japan is the canary in the coal mine.

00:03:18:14 – 00:03:56:24
Unknown
And you told that story. Yes. Yeah. And technically we’re having one to the beginning stages, right? Well, yeah, but that’s been true since 2008, which is something that I always say, you know, to. I mean, that’s when the system died. So. Okay, well, do you not believe or do you think we should talk about currency crisis? Really for the US, we depends on the questions that you asked me.

00:03:56:24 – 00:04:29:27
Unknown
So. So, yes, but you don’t believe we’re in one right now versus we’re headed towards one? We’re definitely headed towards one. And I think what might actually be well, this is not coming out until the I mean, that’s why I said, you know, if we do this rather than saying, well, that’s not going out until September 27th, we could not worry about when it’s we don’t need something for September 27th.

00:04:30:00 – 00:04:57:12
Unknown
So if you ask me questions about what’s happening in the currency markets, what’s happening with all the downgrades, because Moody’s just came out and downgraded like ten regional banks, I put six regional, six large banks on credit watch. So they want us to think that March and April were just isolated incidents, but they’re not. And we’ve always said they’re not.

00:04:57:12 – 00:05:35:29
Unknown
And now that starting to unfold again now, how does that tie in with the currency crisis? Well, the banks are there to create money by loaning it into existence. Are you recording? Of course. Okay. Yeah. So the banks are there to loan money into existence, but with all of the tightening credit and with the problems throughout the entire banking sector, they don’t because the value of the assets that they’re holding, the bonds are down so much because the interest rates are up so much.

00:05:36:01 – 00:06:13:02
Unknown
That’s creating a big, huge problem in their ability to create more dollars. Somebody’s got to create those dollars. Well, yeah, the Treasury’s doing that right by borrowing into existence in this quarter at least a trillion new dollars. So what does that do to all the dollars that are already out there? I mean, there isn’t. And all of this currency crisis, but there’s absolutely a currency crisis because there’s no purchasing power left in the currency.

00:06:13:06 – 00:06:49:16
Unknown
The only thing holding it together is the public confidence in the currency. And that’s waning. And, by the way, what we’re also seeing these days is an uptick in commodity prices like oil and even gold, Right. So the inflation that is supposedly we’re going to get the CPI, the new CPI tomorrow, which doesn’t mean anything because they just juggle those numbers anyway, shocking that, this is what was anticipated this was happening.

00:06:49:21 – 00:07:21:24
Unknown
What a coincidence. Right or not? But what I expect to see between now and the first of the year is heating up of the inflation because oil is up and OPEC plus, which includes Russia. Right. They’ve cut back production. There are no new drills coming online, oil drilling fields coming online. That means that the price of oil is going to go up at the gas pumps.

00:07:21:24 – 00:07:50:27
Unknown
That’s already started happening. That’s what people notice. They notice the food inflation, which is huge, and they notice they the inflation at the pumps. So is there a crisis in the US dollar? 100%, Because what’s the only thing that’s left that’s holding it together is public confidence. And if they can’t mask that, then the public knows what’s going on.

00:07:50:27 – 00:08:05:03
Unknown
The Ponzi scheme is over. That’s the only thing that’s holding it together. And once that’s gone, it can go very, very quickly. Okay.

00:08:05:05 – 00:08:40:09
Unknown
Well, you mentioned Moody’s. Yeah. Grading services. How many rating services are there? Well, there are many, but there are three key grading services. S&P that downgraded the US debt in 2011 when they had the debt ceiling debate. Then Fitch would just downgraded the U.S. credit rating and Moody’s, those are the three key credit rating agencies. So two out of three have downgraded the US.

00:08:40:11 – 00:09:04:25
Unknown
Correct. And then the third one just downgraded a whole bunch of the regional banks, ten regional banks and PAC West is being absorbed into another bank. So that’s a regional bank that’s going away, another bank failure. So it ain’t over, though. You’re not really hearing a whole lot about it because they don’t want the public to realize that another bank has just failed.

00:09:04:27 – 00:09:48:27
Unknown
So what do you see happening with regional banks in the future with this downgrade? Well, I think I think all of the banks, not just the regional banks, are I mean, they’re are all in deep trouble. And that that’s really, I think, what very well may cause the fright, the Fed pivot to lower rates, because if they keep raising rates or even if they keep them up at this level, the value of all of their assets, all of their assets, all of their debt assets, so all the treasuries, all the mortgages, all the loans, all the credit card loans that they’d securitized, the auto loans that they’ve securitized, the student loans that have been securitized.

00:09:48:29 – 00:10:25:00
Unknown
And when I say security securitized, what those are debt instruments that have been turned into products and sold to you. Right. That that’s what’s really, I think, going to cause the pivot. If they push it too far and they may have already pushed it too far, but there’s a lag in there. And so we’ll see. But that’s kind of an indication that that lag is having a very negative effect on a broader market for the banks.

00:10:25:03 – 00:10:52:02
Unknown
But that’s true in all the changing. MORGAN Also about all those bonds and all that debt that were issued in 15 years of zero interest rate policy, they’re all underwater in a very big way. When you simply that mean lower rates, correct? Yes. Pivot. So from raising rates, even keeping them higher for longer. I’m talking about lowering the rates.

00:10:52:06 – 00:11:22:22
Unknown
And why do they raise rates versus lowering rates back and forth to begin with? It’s a way to regulate the rate and speed of inflation. The problem is and why it’s not I mean, it appears to be working on the headline, but that’s more about the oil than anything else. Right. So that’s what’s making it look like. Inflation is more under control, but darned if that quote unquote, core inflation isn’t stickier.

00:11:22:28 – 00:11:45:27
Unknown
Why? This is because the dollar has lost so much of its value and we are at the end of this life cycle period. I mean, period, you have no value left and you have no tools to regulate the rate and speed of that loss because there’s virtually no purchasing power left. That’s what the interest rates are about and that’s what they attempt to do.

00:11:45:27 – 00:12:13:08
Unknown
That’s, that’s the main tool. That and confidence are the two key tools. And you remember it was June of last year when global central banks essentially gave away market confidence in the central banks that they would do what they say they’re going to do. And remember how that was a big deal. I couldn’t believe that they would just so easily give that confidence away.

00:12:13:10 – 00:12:35:13
Unknown
What did they want? Another crisis? The answer is yes. And what do you see happening when they lower rates? I see inflation speeding up again, and I think we’re going to see that anyway, no matter what happens with rates, I think we’re going to see that by the end of this year. It’ll be between now and the end of the year.

00:12:35:13 – 00:13:01:08
Unknown
I think you’ll see inflation coming back in a very obvious way, especially oil inflation. What do you see happening after that? I see. This is this is really when will the public realize that the central banks aren’t fixing anything because it’s not their job to fix it for the public. It’s their job to stay in control. That’s what they’re doing it for.

00:13:01:10 – 00:13:31:27
Unknown
But we I see a rapid loss of trust and confidence in the central banks and the money in the system. And personally, I believe we’ve already begun the trek and into hyperinflation. What typically happens first when the public starts to lose confidence? Well, you know, one of the things that they don’t want to do is, well, they don’t want to save the money.

00:13:32:00 – 00:13:54:25
Unknown
Right. There’s virtually no savings anyway. But there could be more runs on the bank. You’re going to see more runs on the banks. And with the 24 seven instant access, that makes that a whole lot harder to control. But I do think that you’ll see more runs on the banks as people get that their money’s not safe in there and then it’s not buying you as much.

00:13:54:27 – 00:14:26:13
Unknown
So we could well see if those people are not buying on credit but have savings in the bank. Right? Then we could see an uptick in consumer spending because they’re trying to get rid of the dollars into something, anything that might hold more value. The smart people, the ones that are paying attention, are already converting their debt money into good money, gold and silver.

00:14:26:15 – 00:14:53:27
Unknown
I mean, that’s what the global central banks are doing. First half of this year, they bought more gold ever in history. why are they doing that? Who knows more about money than the central banks? So and, you know, I definitely believe that you should always do with the smartest guys on any given topic are doing for themselves.

00:14:54:00 – 00:15:19:00
Unknown
Thanks for that. You’re welcome. So we should do an intro right? Where you listening to that, Trying to figure out what the intro could be about? I was marking timestamps. Do you think that we just talked about the heating up of inflation like oil in the future and no, go ahead run it. You’re we’re still filming, you know, are we recording?

00:15:19:00 – 00:15:56:09
Unknown
I got it. So the question is, is the U.S. dollar in crisis? And the answer is yes, it is. You might not yet be able to see that crisis, but when do you want to know about it? That’s what we’re going to talk about today coming up. Perfect. Full. So part of what I think we might be able to do just to kind of alleviate you a little bit is I’m always more clear after you bombarded with questions, that’s not a negative.

00:15:56:12 – 00:16:23:14
Unknown
You know, and maybe I can do a little bit more of that and you can do the title and the and the thingy. Did you do more? What? So maybe I can do more of that intro piece because I am always more clear after we talk. So we have our discussions on Monday on how you do the title and thumbnail.

00:16:23:15 – 00:16:49:07
Unknown
I could do the and then I could send it to you. Well, neither one of us really wants to add more often for points because it’s going to go back to one a week. Yeah, maybe two occasionally. Like when I do the if you want to do it for Headline News, that’s fine. I mean, I’m really am always done by Monday evening.

00:16:49:09 – 00:17:11:26
Unknown
I could just shut my door on Mondays and try to get as much traction as possible. It’s just Mondays or Mondays, so I know. Yeah. I mean, they are for me as well. Yeah. So that’s why going like and then I could do is like what? Are you out of your frickin mind. Yeah. You know, you basically have every second claimed.

00:17:11:29 – 00:17:51:26
Unknown
Yeah. I wonder if there’s another version like do you see yourself even keeping this exact schedule indefinitely? No, you haven’t. I mean, I didn’t even have to think about that. The answer is no, I don’t want to work this hard. I want more time. Would you be able to just stop, like, blank canvas brainstorming? Like what the most efficient week looks like in all of these different areas and just, like, wiping clean what it is now and just seeing if there’s a better way.

00:17:51:26 – 00:18:29:00
Unknown
I don’t know if there is, but maybe a few of us in a room at the same time bouncing ideas off. You could find another scenario that’s better. I don’t know. You know what scenario would be better? Would Taylor and Daniella coming on board, moving here so that the three of us can have a lot more interaction and conversation, do some things together, do things separately, get them into the the mode of interviews.

00:18:29:00 – 00:18:58:18
Unknown
Because, like I said, I, Taylor totally kind of handled the interview this morning. Now, I don’t know if she did you do that interview. Yes. With about the dollar. Yes. Cashless. Cashless. Yes. You’d think she could handle it. Yes. Her yes the and here’s here’s part of the you know Yeah. Yeah. I think she could have handled I mean it was 17 minutes so took me 2 hours to get ready.

00:18:58:21 – 00:19:26:13
Unknown
It took them about a half an hour to get everything set up since Wednesday. yeah. Because I liked getting up and having to jump in the shower. 430 saying early or early. Yeah. Did I had to start getting ready at 430 in the morning. Yeah. Right. But honestly there’s there’s no doubt that, that you know, she’s since she would have known in advance what they wanted to talk about.

00:19:26:15 – 00:19:53:05
Unknown
So if there were some areas where she felt a little weak, she and I could have had a conversation. She could have done some more research if she needed it, because at some point we want her to She’s got to have her own personality. Right. They’ll still want to talk to her about something. I’m curious how they found her and wanted to talk to her in the first place.

00:19:53:05 – 00:20:12:26
Unknown
Yeah, I don’t really know. And we do not have a lot of conversation before it and we didn’t have any conversation afterwards, just black and white. It was just very black and white. Yes. No other. How do you mean? Is that cool or is it just like, yeah, they were cool? Well, you know, first of all, British people are very proper.

00:20:13:01 – 00:20:41:18
Unknown
Yeah. Second of all, you had Dave Morgan, who I know him, right. Or whatever his name is. Dave. I don’t know, but yeah. Morgan So, yeah. Morgan. He’s a silver guy. Yes, he was there. And then this other professor of economics, lovable. And he’s like, you know, if you have something to say, just let me know. And all right.

00:20:41:18 – 00:21:05:01
Unknown
So there were like a couple times because this was only 17 minutes. Where is this something really idiotic? Who did the professor guy particularly not not Morgan so much, but the professor guy and the guy, whatever his name is that was hosting, was like, that’s about to jump out of her chair. What do you have to say?

00:21:05:01 – 00:21:49:12
Unknown
One So these two guys are, like, very prim and proper, very typical, boring thing, you know? And I’m like, Wow, you know? Well, and I did my thing. That’s why people like you so much also is because finance is usually really dry and boring. Yeah, finance people are super dry, boring, monotone, and you’re like, Wow, Yes. You know, plus in those kind of panels, we get content, meaning it’s not like they really do a lot to promote, you know, the companies.

00:21:49:15 – 00:21:52:02
Unknown
So, I mean, it was a spirit.

 

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