Gold Goats 'n Guns Podcast Episode #213 - Caitlin Long and the Financial Crisis that Wasn't
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Apr 18, 2025 AI Snips
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US Financial Decoupling Begins
- Trump is leading the first true decoupling of the US financial system from the old colonial European system.
- The shift from LIBOR to SOFR marks a significant move of financial control from London to New York Fed.
Shift from LIBOR to SOFR
- LIBOR was an unsecured rate set by London banks, making them controllers of US dollar interest rates.
- SOFR is secured, New York-based, and now sets US interest rates, shifting power to the US.
Rehypothecation Limits Stability
- London financial markets allowed infinite rehypothecation, enabling massive uncollateralized leverage.
- US rules limit rehypothecation, making the system more stable but less leveraged.