Eurodollar University HOLY SH*T! Banks Are Preparing for Something Big
15 snips
Jul 2, 2025 Recent trends in the money system raise eyebrows as primary dealers in Treasury bills hint at underlying financial disturbances. A disconnect between soaring stock prices and ominous market signals points to potential deflation. The swap market emerges as a key indicator for forecasting economic shifts, revealing a drop in inflation risk and foreshadowing possible decline. Additionally, negative swap spreads suggest troubling implications for future interest rates, echoing the silent depression experienced in the 2010s.
AI Snips
Chapters
Transcript
Episode notes
Dealers' Treasury Bill Buildup Signals Deflation
- Primary dealers buildup of Treasury bills usually precedes deflationary events.
- Such patterns appeared before Silk Valley Bank collapse, carry trade blow up, and dollar shortage spikes.
Swap Spreads Signal Hidden Stress
- The four-week bill yield drop and near-record lows in long-dated swap spreads suggest systemic stress.
- Stock market rises contrast with underlying monetary and swap market signals pointing to trouble.
Swap Market Foretold Economic Reality
- Swap market has been extremely accurate at forecasting economic and monetary trends.
- It indicated lack of inflation risk and a struggling economy well before 2022 events.