Seems that after the COVID crash we didn't avoid another event like Jeff was talking about, and we still have supply shortages and instability in the system.

Wow, we live in a complex world! Thanks Jeff for adding a layer of knowledge!!!

This is a really superb presentation. I admit, I did have to watch it twice to really understand. It would be great to have an update of the presentation three years down the track, after the fundamental problem still hasn’t really been fixed and we are stepping closer to the socio-political ramifications. It would also be helpful to give a little more detail up front regarding the wholesale banking model that is driving the system. It is impressive and depressing just how relevant this discussion still is, three years later. Thanks very much.

@Brooks you can find a download link for the charts/slides within the Transcript. M.

It's a lot to digest, I've spent an entire day deciphering Snider's presentations, I think I could have saved a lot of time trying to figure out the many current contradictions if I saw this one earlier.

Keep on eye on TED, which gives a good indication that Global Reserve Currency ( EuroDollar) is in short supply or not. If it's in sort supply (TED tends to increase), negative cross currency swaps tend to rise ( eg: Yen) others tend to devalue , due to the banks are craving for the dollars in the eurodollar market outbidding each other. If Interest Rates (Global IR) are lower means tight global economic conditions and EuroDollar shortage. However US is deviating this phenomenon with J. Powell came into FED, imho. China is essentially eurodollar economy along with ROW ex US. This is evident, with the collapse of the abundant Eurodollar supply post-2007, the Chinese Industrial production is keep going down. US has been suffocating ROW with lack of dollar supply. This will get intensified with new FED policies imho. But TED is still very low and doesn't show any sign of lack of eurodollar shortage yet. Fast forward to 2018; China IP is still below 8% , where as TED is 0.24, seems it's going down since April 2018 (0.60), whereas on 10th Oct,2008 is 4.58. There is a bit correlation between SPX sell-offs and increase in TED. But currency seems little bit tricky, fair enough there are so many moving parts. Very complex system and there are so many unknowns to retails traders. This is first class , Thank you RV , Thank you Jeff. Really appreciated.

EXPLAINED CLEARLY. BUT A SUBJECT I KNOW LITTLE OF. EXPLAINS WHY ECONOMIC EVENTS HAPPEN THAT WE HAVE NO UNDERLYING UNDERLYING UNDERSTANDING OF. JUST GOES TO SHOW, WE ALL NEED TO BE PREPARED. NEEDS REVIEWING REGULARLY I BELIEVE. I KNOWLEDGE IS BUILT ON KNOWLEDGE.

Just finished my third viewing of this presentation. I now understand about 12% of what he is talking about.

seems like the clearest case for the return of gold as collateral.

I'll be watching this one a few more times. Jeff is incredible. His Macrovoices appearances were golden as well. RealVision never ceases to disappoint.

Watching this in 2018...is he Satoshi?

When all money is backed by nothing and confidence is lost - the strongest fiat will be the last standing - in this case the US dollar. The failure of the Eurodollar system after 2008 shows that this confidence has been lost, and this loss of confidence was solidified after the European debt crisis in 2011 - explains why banks are getting out of the money dealing business and all of its functions - thus without the banks performing these monetary needs the system is now falling apart. So you get this Frankenstein type of system that is created to fill the gap of what the previous Eurodollar system (which is basically the world reserve currency) will no longer perform and all the unintended consequences this sets off, what a mess. It's no wonder global banks will not take trades - everything he is talking about indicates how the system is just reacting over and over again to the global funding problem. I wish I was as optimistic as he is about solving this problem - yes there is opportunity here; but there is no political will.

Pure genius!

Superb presentation.

at first I thought it might be boring but this was an eye opener - i mean, my eyes are still mostly closed because I barely understood it but I know it was worth it! (will revisit for sure and I'll also check out his publications) Any books that explain this Eurodollar "thing" ??

at first I thought it might be boring but this was an eye opener - i mean, my eyes are still mostly closed because I barely understood it but I know it was worth it! (will revisit for sure and I'll also check out his publications) Any books that explain this Eurodollar "thing" ??

I watched this interview when it came out and missed the brilliance. On second review it is amazingly insightful and helpful.

Problem is that if there was a new world currency the US will be exposed as completely insolvent, entitlements unpayable and a military hegemony that without printable cash to infinity is over. Considering behavior economics and knowing what John Kenneth Galbraith said is so true, "People of privilege will always risk their complete destruction rather than surrender any material part of their advantage" - this is all going to end very badly.

Please bring him back again. Would love to see Raoul speak with him.

I can't help but think this along with Daniel want's piece on collateral are the most important videos to watch on realvision!

excellent

Bravo, very impressive! I appreciate the optimism at the end, but it is hard to see how arrogant people will admit mistakes..

great work! one of the best presentations on RVTV to date!

SDR's to the rescue...?

Wow, what a presentation. Very impressive. Too bad central bankers don't seem to understand what Jeff is describing.

Great work!

I hope he's wrong and fear he's right. How do retail investors accomplish Stability and growth?

Wow. That was great. Like a detective story in some parts. I think I understand most of it. Yes transcript and charts needed for me to ponder now.. Thanks for those. I have read about concerns re Ted spreads and liquidity, this explanation helps provide depth. Also I can see more clearly a plausible reason why things have not improved. As well, this integrates with and adds to, several other talks on RVTV. The opportunity alluded to at the end, I interpret as being, to see the actual reality of the situation, not the 'common knowledge' out there and to have an influence in avoiding social consequences (even war). If people don't have understanding of how anything comes about, and they are in a position to influence, then, they will not be effective. Re his point on a reset, it seems many are talking about that. If his thesis is correct, then more people need to know about that too. In activist circles there is a lot of heavy duty conspiracy talk, much revolves around money, getting clarity would be good.. More work for me to get that for myself.....

Sorry, that was meant to be a bookmark ....

CDS cut back and old ones playing out.

A

http://www.alhambrapartners.com/2016/01/27/fractions-of-gold/

Excellent piece! It filled a lot of holes in my knowledge of Macro. Thank you!

Even better the second time. Can only imagine how good it will be on the third viewing.

@ Steve P - I THINK that "EuroDollar" has nothing to do w/ the Euro. It (Eurodollar) apparently got that name because banks in Europe were main instigators of "it" ("it" being, per Jeff's explanation, a SYSTEM, not a 'thing' (either a tangible or intangible thing)). If so, then a Euro collapse and/or disintegration of the EU, won't directly kill this 'EuroDollar' SYSTEM (tho' likely plenty of indirect "fallout" can occur).

Raul should interview him soon and consider periodic follow up

Very technical and pragmatic. Should people at fed have a conversation with him? Think so.

This is one of the most important presentations yet on RealvisionTV. It challenges the notion that the Fed and central banks have been engaged in money printing and demonstrates that such activities have merely been filling the void left by the collapse of mortgage finance and its ensuing contraction of the EuroDollar market. I would like to see an interview by Raoul Pal of Jeffrey Snider. I would also appreciate a discussion of the papers conclusions for the Gold/precious metals markets as well as equity markets.

wow and thanks here too!

Wow and thanks.

Some one needs to show this to Larry Summers to debunk his stupid 'Secular Stagnation' meme. Great job RVTV!

Great Thank you! Now I just need to understand it. More please.

Thank you Real Vision. Worth every subscription penny. When I watch this two years from now as a "rewind" I believe Snider's liquidity work will prove to have been the single most useful and prescient signal to navigate capital markets. This was all substance over form. To others' complaints about Snider not providing trade ideas - there are dozens of other RV interviews to help - I don't want Snider telling me how to play the thesis, just keep digging and doing quality work on system-wide liquidity. Excellent job!

Might be well worthwhile having an interview with Jeffrey to get his views on what a replacement for the E$ system might be and what potential trades are out there should things appear to be heading sour again. Great presentation.

Good talk but a lot of unnecessary jargon thrown in "rising dollar is another euphemism for wholesale, dynamic, multi functional, multi dimensional capacities that are in distress and disorder" seriously?

Dear Jeffrey, could the Eurodollar market be replaced by one based on SDRs? Then more government balance sheets can be abused without democratic accountability.

Excellent presentation and much new info for me. Thank you. I would like to point out, however, that the repo market not accepting sub-prime mortgage bonds was just an act of common sense. The collapse of euro-dollar market was an effect, not the cause. (Someone said the world is so crazy that common sense is passing for genius.) Sub-prime bonds were certainly not accepted as collateral. Wall Street did cause the collapse.

What I'd like to know is: how can we do to protect even a little? Hoard cash? If system breaks, we need productive land with water. So Michael Barry is truly a genius. What if u don't have enough money to get your land with water? Social problems? Yes, for sure.

A very interesting presentation. I think I understood the principles of it, but there is no way I would claim to understand the details of it all or whether it holds water as the reasons for us 'being in a depression'. It would be great to take this presentation to the next step and get someone like Raul to discuss the arguments with Jeff as he has laid them out and test some of his hypotheses in a debate or undertake a critique of his arguments and possibly pose alternative arguments POV, assuming there are some.

Since watching this video I've begun to read Snider's prior work. With each piece I become that much more impressed with him and that much more fearful of the gathering storm that threatens us. Snider points out that productivity growth is a crucial determinant of a healthy economy. Yellen's optimism on this metric raises eyebrows given the abysmal numbers on productivity throughout this "recovery." More worrisome, Snider says, is her circular thinking on the subject; "Productivity will stop being a problem so the economy will get better." The economy will get better so that productivity will stop being a problem." Etc. He says this is just one example of our wayward Fed's inability to stray from their models and instead focus on markets. I believe Snider's work must be respected. That there are not many more Snider's warning of an upcoming "reset" gives me no comfort. It is the train that you don't see that ends up hitting you.

Please bring us more such technical presentations about the plumbing of the system that can help us in our day jobs!

OK, I get it. But to end on "and all we need is reform and everything will be OK" but not to tell us what the reform needs to be is frustrating.

Fantastic presentation!! After viewing this a couple of times I am wondering if the breakdown of the eurodollar system and ED liquidity is the reason behind China and the IMF trying to establish the SDR. Will a functioning SDR with sufficient liquidity replace the eurodollar and transfer shadowbanking's functions out of the shadows into the IMF's official realm of responsibility?

Talk about thoroughly understanding AND clearly explaining BOTH the micro and the macro of the global wholesale funding markets. This was an A+. Raoul. You might want to consider buying OTM E$ puts for 0.25 tic as well....strangle up your par calls. Don't be short E$ put skew up front. JB

Gulp!

This is why I love RealVision - detailed explanations of what is important and which is not available anywhere else. Fantastic.

A great preso.

Amazing presentation, this alone was worth the subscription. I follow finance fairly closely, how come no one else is talking about this? Seems to me one should be long deflation\depression resistant assets and avoid those things that rely heavily on the repo market? Mostly the same since the crisis hit really....

Too technical...seemed like dots were been connected all over to tell a never ending story. I'm sure the guy knows his stuff though!

The decline in the use of 'wholesale' funding and eurodollar balances is reducing the systemic risk, not increasing it. Those declining balances show how much progress has been made. The US banking and shadow banking system is already in good shape, but Europe and China still have further to go. The risk is that these declines/unwinds, which have so far been orderly, turn disorderly. Many have been betting on 'disorderly' since the crisis, and continue to be disappointed. More muddle thru with low growth and low inflation seems like the central case from here. Finally, he forcefully (and rightfully) identifies the banking/shadow banking system--and not central banks--as the driver of money supply, a supremely important point that is still lost on most everyone. The important implication of course is that it is hard to argue stocks are being propped up artificially by the money supply if the money supply is actually contracting, as he asserts.

one of the best minds in the business - a daily "must read".

I've heard of shadow banking for a long time but had no idea what it was about. This presentation pulls the curtain back and exposes what's been happening. I also would like a follow up talk where he relates all this to the current markets.

Until today I thought I would at least understand a little bit the financial markets - I will need to watch this at least 10 times.

Thank you just superb.

Super Presentation! I love it. Not conventional at all, not to much liquidity in the market, too less! So what now? How do we fix the eurodollar thing?

Great

Russian short term yields are 7-10% Friedman interest rate myth is not a myth. If you look at money in nominal terms, you get the 'myth' critique. If you look at money in real terms, you get a different picture. For example, during 5% deflation(dollar shortage in functional terms), a 0% bond is yielding toward 5%, generating even more as deflation extends. Getting 0% in nominal terms of a deflating money is tremendous gain.

Very educational! Great video.

Absolutely phenomenal!

Best RV video yet!! Can you download the charts/slides? I found the pdf of the transcript, but no charts. Thanks!

Think this was an excellent segment. Very grateful for it. I do, however, want to hear about how Jeff thinks about gold, the US bond markets, etc etc framed under his argument. Seems like this is very deflationary, if so, wondering what he thinks about when trying to invest. Anyways, thanks to Jeff and RV for this great info.

I'm starting to agree about the depression part with rates going so low and the yield curve getting flatter and going lower at the longer end. And people like Stan Fisher saying negative interest rates look like they could work. I just don't see that where government get to borrow money for free (no risk premium) when they are building getter debts on their balance sheet. Have to listen to again. Great stuff for thought. Hope we figure it out.

Outstanding! Hope to hear more.

What an outstanding if slightly complex view of the global financial structure. Having never heard of the parallel Eurodollar system, my question is how would a collapse in the Eurozone sovereign membership or a Euro banking collapse affect the Eurodollar system?

This is the string theory and worm holes of finance. And I'm very grateful for the opportunity to have seen it. Arguably the most important video I've seen as a subscriber so far. Explains so much. Many thanks to Raoul and Grant. God bless us all.

I wonder if the SDR is going to be the solution to the EuroDollar problem.

Just wanted to follow up on my prior comment. Tom Quigley informed me in a very friendly e-mail that RealVision has transcripts of the interview as well as the charts. You can download them by clicking the down arrow button on the front of the video card (next to the "I" button for more information. I am in heaven! I have downloaded the interview and printed it. Now the charts are being downloaded too! Thank you Tom and RealVision. I really did not know about the option. BRAVO!

@Elizabeth if you look two comments below yours, you will find what you are looking for. We now have transcripts for every new video that is posted. M.

Glad, judging by the comments, that I won't be the only one forced to sit in the corner wearing a silly hat for failing to grasp all the terminology. What strikes me is how the deterioration accelerated around the time oil and commodity prices collapsed. It brings to mind a point Raoul made about the impact of so much wealth simply vanishing...especially when the debt, and creditors, stay on. It seems to make sense that European banks with the greatest exposure to EM debt would lead the decline. Also agree with many comments that the optimistic conclusion seems more hope than probability. On the other hand, screwing things up on the international relations level any more than the current group has is a pretty high bar to reach. So, improvement is not out of the question.

excellent video, I´m very happy I have joined RVTV. keep up the good work

Very very good presentation, however, as I crept further to the edge of my seat watching and listening to the end, I was left with the word "reform". Sorry but that word is not in Bilderberg's vocabulary. A crisis is usually solved with another crisis. They just look and feel different.

We need transcripts of all interviews. I am tired of taking notes because you do not provide transcripts. This terrific interview especially needs a transcript with charts. I need to study this. Watching it again means spending hours taking photos of the charts and organizing the material. Learning takes time.

@DE , @Elizabeth , et al. Transcripts can be downloaded by clicking the 'downward arrow' button (next to the Information 'i' button) in the Video Box you clicked to access this video. It will give you the option of downloading the Audio or the Transcript for this video. Within the Transcript you will have a download link which will let you download the slides for this presentation. M.

Been reading Jeff's work for several months. It's been a challenge that I enjoy. Important to understand his view. Happy to see him showcased here at RV.

Where can we download the transcript and slide deck? Thanks

Very good. Confused as before, though on a much higher level - and still no idea how to trade it. That is probably how it is supposed to be …..

Thank you, Jeff, and RV TV. Now I have my work cut out for the forseeable future - study the Eurodollar system. I feel like I was just given a map to the buried treasure. Getting there and digging it up will require everything I have - but the ultimate boon beckons.

Structures to be considered at the next Bretton Woods. Would probably require a crypto-currency and derivatives wizard. Thanks Grant and Raoul

Excellent presentation though challenging to get your head wrapped around it. Tantalizingly close to delivering the "punch line" but in the end it fell short. The viewer is left much more educated but having to ponder the meaning of a theoretical thought experiment on something that needs to be done which no one is smart enough to know that it needs to be done. What is his investment thesis? We never find out.

Jeffrey,great job showing us the complex web of pipes carrying funding to the global markets. I would suggest a collaborative book co-authored with Willem Middelkop of "The Big Reset" regarding possib

Can't believe anyone could give this piece a thumbs-down, even a Central Banker!!! ;-)

Intriguing presentation. If Central Banks are not in control, whatever they do is useless, so we should stop paying that much attention to them. If the wholesale market is the source of the problem, "we" have to fix it, but who is "we" and what should "we" do?.

Excellent presentation by a very knowledgable and informed macro strategist. Never heard anything about the importance of the EURO DOLLAR system before today. I need a TRANSCRIPT!! All of us would benefit by studying his presentation. This complex subject cannot be understood without at least a transcript and time. Bravo! Merci for your time.

Robert M. Debt Jubilee won't happen. That would be the same as erasing assets. Same thing, just the other side of the coin. Assets need to rise in relation to debt. Zero interestrates show there is no opportunities but that is only within the system. Looking beyond the system there is possibilities and that is the cure that makes the system sound and stable again with opportunities and opportunitycosts (interestrates).

This is a really tough subject to understand, will have to listen and view this numberous times to get this. It's like a condensed version of the money supply , shadow banking, central banks, etc...like getting a condensed doctorate in money in 1 hour! Great stuff albeit hard.

Wow... fantastic explanations on a complex subject thankyou.. Super interesting but think i need to watch this again.. first thoughts are that this points too a much stronger USD if there is such a shortage out there..? Also a question if this recent spike in Libor isnt just a short term spike and you overlay the fed funds rate then are we are going to see rates a lot higher also? Keen to hear anyone's thoughts and trade ideas in terms of risk vs reward if/as this plays out .

Remind me once again, how much I paid for this presentation...

Man is a genius. Only person on the planet (or at least the only one who writes and talks about it publicly) who fully understands the financial system and offers compelling explanations of why things have happened as they did. No one else talks about Eurodollar expansion and contraction, but it explains essentially all the financial history of the past 50 years. Snider is the first and only guy to identify this.

best analysis ive heard, ever.

Boom goes the dynamite. What a financial beast. What he talked about reminds me more of what Zerohedge posted back in 2010 and 2011 on Shadow Banking... Crazy how much contraction occurred Post-2008. Great Presentation. Need to Repeat this about five times to ingrain the whole thing.

Brilliant...crisis

Great analysis! The problem is that the politicians will only act when a crisiis hits This is when citizens are most motivated to accept change. The 80 year debt cycle is coming to an end by 2018 and

Absolutely agree E B.

Excellent topic and an information filled presentation, will have to watch several times to get the full benefit. I love to learn about how the system works and real experts like Jeff are diamonds in the mine. More please.

Talk about drinking from the fire hose! I need to watch this one again--maybe twice, because I need to understand this. This is big stuff.

Are Snider's commentary consistent with the views of Perry Mehrling?

nice guy, speaks english, i understood every word, and almost nothing. Way beyond my skill level

indeed NO calls, it sounds to me like it is gloom and doom, SDR anybody?

Miguel, just like my buddy of mine, and many many others, you keep on thinking that Snider is talking about something that central banks did. He is not. People are so used to thinking in terms of central bank control that they simply can't begin understand Jeffrey's simple thesis that it is private markets and private credit that caused the booms and busts. The only thing central banks do is confuse private markets by PRETENDING that their actions matter, and so, to the extent that markets believe them, this is delaying the inevitable crash and reset that was supposed to occur in 2008, or even in 2000-2001, or according to some people, perhaps even in 1991.

Excellent!! Thanks!

Exactly Bryan, sorry I didn't see your comment. Needed to close the video and reopen it to see the latest comments. Milton this would be a useful upgrade, a comments refresh button.

How can the ED system be restructured? Doesn't this fundamentally require that the economic system be relieved of its sclerosis from high debt? That would require a debt jubilee. As it is this high debt which individuals and corporates and governments hold, that stops them from taking on more debt and drives them to reduce debt. It is this which drives those deteriorating bank balance sheets which equal the ED system.

There is a Zen principle called "The miscalculation of calculation". Essentially it means that the instinct to manipulate and control outcomes is misguided and, in itself, creates a problem. In other words it's the law of unintended consequences (which are invariably bad). I don't get Jeffrey's optimistic conclusion. It seems to me, he is saying that the problem is almost incomprehensibly complex and because CBs are trying to control something they don't even understand, they are destined to make things worse.

Doesn't this all dance around the fact that we have created too much debt both inside and outside the system that cannot be sustained (by a host of reasons covered in other videos) and since money is essentially debt, it is contracting in a variety of forms that play out in the currency markets (because CBs won't let it affect other markets). Just saying. I need an aspirin.

Incredible interview! very helpful in explaining difficult concepts to understand. a must watch

This is a good starting place if your new to Jeff's work. Read pts 1-3: http://www.alhambrapartners.com/2013/11/26/understanding-eurodollars-part-3/

Jeffrey Snider & Paul Mylchreest have both provided outstanding work in helping us navigate the ebb and flows of central bank plumbing, or should I say lack of plumbing.. Awesome Presentation!

Basically he makes the argument that easy mon policy has only stimulated financial system while in the real economy money is tight relative to historical standards?

WOW, im not sure what to say. Excelent though. A little TMI for my brain.

I don't quite get the optimism. Is there any sign anywhere that ANYONE (in power) is getting a handle on this? It seems to me he is saying that no one understands the problem and because of this the responses are not effective. If no one understands the problem and all the responses are inappropriate how is this an opportunity? That's like saying "Climate Change" is an opportunity when the instinctive reaction has been to deny and ignore the issue. .

Clearly a bright guy but he doesn't make any calls in a defined time horizon so viewers can judge whether his calls are good or not. I've read a lot of his previous research and they are all bearish and never gives a time frame. Great background information though

Excellent!

http://www.alhambrapartners.com/category/markets/ http://www.realclearmarkets.com/authors/jeffrey_snider/ http://seekingalpha.com/author/alhambra-investment-partners/research