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Global US-Dollar Shortage - Are We Already in a Recession?

Jamie Dimon said he expects problems to emerge in private credit and warned that “there could be hell to pay,” particularly as retail clients gain access to the booming asset class.

“Do you want to give access to retail clients on some of these less liquid products? Well the answer is — probably, but don’t act like there’s no risk with that,” the JPMorgan Chase & Co. chief executive officer said at an industry conference Wednesday. “Retail clients tend to circle the block and call their senators and congressmen.”
https://www.bloomberg.com/tips/
 

Goldman Racks Up $21 Billion for Its Largest Private Credit Pool​

  • Popular asset class is helping the pivot from proprietary bets
  • Firm targets $300 billion of such credit assets within 5 years





0

Goldman Private Credit Foray Feeds Bigger-Is-Better Goal
By Sridhar Natarajan
May 29, 2024 at 6:30 PM GMT+8

Goldman Sachs Group Inc. has put together $21 billion for private credit wagers, its biggest war chest yet for Wall Street’s buzziest asset class.

The firm just closed the latest iteration of its direct-lending fund, drumming up firepower that includes fresh capital, borrowed funds and co-investments. That along with separately managed accounts will be put to use making more directly negotiated senior loans.
 
Singapore recession is pegged to our Ministers salary. We don't have recession in Singapore and probably will never be.
 

China Uses Russia as Testing Ground for Currency Gamble​

Published May 29, 2024 at 10:16 AM EDT

The Chinese yuan (RMB) is increasingly being used in international transactions by China's trade partners, particularly Russia, after Russia was largely frozen out of the global financial system after its February 24, 2022, invasion of Ukraine.

As of December 2023, the yuan accounted for about one-third of Russian trade.

"The China-Russia relationship is allowing China to truly test de-dollarization at scale," Vincent Deluard, director of Global Macro Strategy at financial services company StoneX Group Inc., told Newsweek.

China's international transactions in the RMB surpassed those conducted in dollars for the first time in the first quarter of 2023, according to a Nikkei analysis.

China's cross-border trade settlement in yuan​

Goods and services

Screenshot 2024-05-30 at 11.00.20 AM.png


The yuan is also gaining traction in trade between third-party countries. The Bangladeshi government greenlit a $318 million payment in RMB to Russia's Rosatom State Atomic Energy Corporation for the construction of the Rooppur Nuclear Power Plant.

The currency is also seeing greater use in the Middle East, Africa and Latin America. In November, China and fellow BRICS member Saudi Arabia signed a $7 billion currency swap agreement.

"Achieving strategic autonomy is China's guiding star," Deluard said, emphasizing that reducing dependence on the dollar is crucial to avoiding U.S. leverage and reprisals, as demonstrated by Russia's situation. "You could take the Russia story as a catalyst."

https://www.newsweek.com/china-uses-russia-testing-ground-currency-gamble-1903474
 
The World have shifted their focus to Yuan, seeing that USD is no longer safe to hold.
 

Russia says it's working with a group of countries to build a platform that doesn't need the dollar​

Huileng Tan
Jun 11, 2024, 1:00 PM SGT

  • A group of emerging countries are planning a payments platform to bypass the US dollar, Lavrov announced.
  • The initiative follows a BRICS summit call for trade in national currencies.
  • The platform may use digital currency, with more details expected at the Kazan BRICS meeting.
https://www.businessinsider.com/ded...cs-local-currencies-platform-us-dollar-2024-6
 
https://pro.thestreet.com/market-commentary/end-of-petrodollar-shows-changing-geopolitics

After 50 Years, Death of the Petrodollar Signals End of U.S. Hegemony​

The economic wheels of motion are turning and the U.S. is sleepwalking toward world war.

The petrodollar, which has been in place since 1974, officially expired on June, 9, 2024.

This was a deal that was put in place to bring Arab nations and the U.S. closer together. It was designed to circulate dollars between the two regions in exchange for oil sales. As a result, oil has been a commodity that has been priced and traded in dollars. Now, as this deal has not been renewed, Saudi Arabia can trade or deal in currencies outside of the U.S. dollar; they can now trade in yen, euros, Chinese yuan and even the highly-contentious Russian ruble.

Truth be told, this has been happening in the background since the invasion of Ukraine by Russia and the Western world subsequently placing sanctions on Russia to limit its exports. The sanctions never worked, as all they did was form new trading alliances and change the partnership agreements for good. As a result, the world has forever changed.

The U.S. hegemony has been in place since the last 90-plus years, when most countries had some sort of an agreement to invest these dollars back into the U.S. treasury market as the U.S. imported goods from others, running a trade deficit. Today, these structures are changing and the bedrock of the financial system has moved. This has implications for U.S. foreign policy and its response going forward.

Since the U.S. began focusing on shale in 2012, the dynamics have changed for the petrodollar as the country moved from being a net energy importer to an exporter. The U.S. has come a long way since the days of relying on Saudi Arabia and other nations for its oil needs, and this is why the petrodollar is no longer needed nor holds as much relevance and meaning as it did back then.

This move away from the U.S. dollar has been a cause for many wars in the past, so this change is of great significance. Today, as several very powerful countries are moving away from the dollar, there is little the U.S. can do. As of now, the dollar is still the reserve currency, as there is no comparable second one behind. But the wheels of change are already set in motion.

This also has a huge impact on the bond markets. As the global alliances change, there are fewer buyers of U.S. treasury. We know that China and Russia have been selling down UST, leaving only Japan and some others as the buyers. Given the way that the U.S. is spending, they will end up being the biggest buyers of their own debt. Sound familiar? This comes at a time when U.S. national debt is on course to reach $37 trillion, about $8 trillion to be refinanced this year at even higher rates. Seeing the U.S. 10-year yield trading at 4.4% is astonishing when there is just so much debt to come still as the Biden administration knows no other way to keep the U.S. economy and consumers afloat than to boost and print even more.

As we started the year, most had been pricing in rate cuts with no landing. They, along with the Fed, have magically convinced themselves that because a recession did not occur last year, it never will. Things work in time lags, one has to remove the inordinate amount of fiscal spending that distorted the true state of the U.S. economy blurred by the U.S. monetary policy.

Today, the U.S. economy data is showing signs of slowing down, even as the goods sector is unable to make a recovery with the services part cooling off too. Judging by the way the ISM and PMI and new orders are looking, GDP projections are set to come in even weaker. The issue is that, as the latest CPI showed, we are still averaging 3.4% year-over-year in CPI, which, according to Fed chairman Jerome Powell, is still "way too high" for them to be comfortable as "they need to be sure" they have reached their sustainable 2% goal.

We are moving from a window of softening growth and accommodative policy to one of recession and restrictive policy. With more trade wars and higher tariffs, inflation is going to take time to come down but growth globally is already showing signs of fatigue.

Everyone is hiding in a few stocks as the S&P 500 makes new highs, but how much can Nvidia or Microsoft hold up the index? Its fate is inevitable as Chinese and EU indices start rolling over, it is only a matter of time until this one does too. The wheels of change are in motion and the U.S. knows it. Perhaps that is why we are sleepwalking into a state of world war.
 
superpower said:
https://pro.thestreet.com/market-commentary/end-of-petrodollar-shows-changing-geopolitics

After 50 Years, Death of the Petrodollar Signals End of U.S. Hegemony​

The economic wheels of motion are turning and the U.S. is sleepwalking toward world war.

The petrodollar, which has been in place since 1974, officially expired on June, 9, 2024.

This was a deal that was put in place to bring Arab nations and the U.S. closer together. It was designed to circulate dollars between the two regions in exchange for oil sales. As a result, oil has been a commodity that has been priced and traded in dollars. Now, as this deal has not been renewed, Saudi Arabia can trade or deal in currencies outside of the U.S. dollar; they can now trade in yen, euros, Chinese yuan and even the highly-contentious Russian ruble.

Truth be told, this has been happening in the background since the invasion of Ukraine by Russia and the Western world subsequently placing sanctions on Russia to limit its exports. The sanctions never worked, as all they did was form new trading alliances and change the partnership agreements for good. As a result, the world has forever changed.

The U.S. hegemony has been in place since the last 90-plus years, when most countries had some sort of an agreement to invest these dollars back into the U.S. treasury market as the U.S. imported goods from others, running a trade deficit. Today, these structures are changing and the bedrock of the financial system has moved. This has implications for U.S. foreign policy and its response going forward.

Since the U.S. began focusing on shale in 2012, the dynamics have changed for the petrodollar as the country moved from being a net energy importer to an exporter. The U.S. has come a long way since the days of relying on Saudi Arabia and other nations for its oil needs, and this is why the petrodollar is no longer needed nor holds as much relevance and meaning as it did back then.

This move away from the U.S. dollar has been a cause for many wars in the past, so this change is of great significance. Today, as several very powerful countries are moving away from the dollar, there is little the U.S. can do. As of now, the dollar is still the reserve currency, as there is no comparable second one behind. But the wheels of change are already set in motion.

This also has a huge impact on the bond markets. As the global alliances change, there are fewer buyers of U.S. treasury. We know that China and Russia have been selling down UST, leaving only Japan and some others as the buyers. Given the way that the U.S. is spending, they will end up being the biggest buyers of their own debt. Sound familiar? This comes at a time when U.S. national debt is on course to reach $37 trillion, about $8 trillion to be refinanced this year at even higher rates. Seeing the U.S. 10-year yield trading at 4.4% is astonishing when there is just so much debt to come still as the Biden administration knows no other way to keep the U.S. economy and consumers afloat than to boost and print even more.

As we started the year, most had been pricing in rate cuts with no landing. They, along with the Fed, have magically convinced themselves that because a recession did not occur last year, it never will. Things work in time lags, one has to remove the inordinate amount of fiscal spending that distorted the true state of the U.S. economy blurred by the U.S. monetary policy.

Today, the U.S. economy data is showing signs of slowing down, even as the goods sector is unable to make a recovery with the services part cooling off too. Judging by the way the ISM and PMI and new orders are looking, GDP projections are set to come in even weaker. The issue is that, as the latest CPI showed, we are still averaging 3.4% year-over-year in CPI, which, according to Fed chairman Jerome Powell, is still "way too high" for them to be comfortable as "they need to be sure" they have reached their sustainable 2% goal.

We are moving from a window of softening growth and accommodative policy to one of recession and restrictive policy. With more trade wars and higher tariffs, inflation is going to take time to come down but growth globally is already showing signs of fatigue.

Everyone is hiding in a few stocks as the S&P 500 makes new highs, but how much can Nvidia or Microsoft hold up the index? Its fate is inevitable as Chinese and EU indices start rolling over, it is only a matter of time until this one does too. The wheels of change are in motion and the U.S. knows it. Perhaps that is why we are sleepwalking into a state of world war.
Click to expand...
Another zerohedge nonsense
 
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