Macro Hang #5 w/ Jeff Booth, Preston Pysh & Greg Foss
Bitcoin Rapid-Fire
The Importance of Interest Rate Parity in Foreign Exchange Trading
Total global foreign exchange trading is actually over 30 times the size of global trade. There is a formula distinct formula called interest rate parity that you can hedge up the interest rate in one country through the fiat forward curve and arbitrate the interest rates in various countries because it's math. The Canadian dollar only trades against one currency in the world and that's the US dollar to go from the US to from the Canadian dollar to the Japanese yen you actually have to go through the US dollar. So this is just the way the global financial system works well said Preston.
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