By Christian Briggs – America Out Loud Is the global financial system undergoing its biggest transformation since Bretton Woods—and are most Americans missing what’s happening right in front of them? In this episode of On the [...]
AI:The global financial system is undergoing a massive, fundamental transformation reminiscent of the Bretton Woods era, yet much of this restructuring is occurring out of the public's view. As shifts in gold dominance and volatility in U.S. Treasuries suggest a broader instability, the current movement represents a significant rewriting of international economic foundations that many Americans remain largely unaware of.Open
If the United States gets into the business of providing dollar liquidity to the United Arab Emirates and other Persian Gulf states battered by the Strait of Hormuz's closure, it will amount to a novel use of an old power. The big picture: The Federal Reserve used swap lines with foreign central banks as a key tool to calm global financial disruptions in periods of stress, starting in the early days of the global financial crisis in 2007. They were driven by Fed leaders' belief that dollar funding shortages worldwide risked blowing back to the U.S. banking system and economy. - The potential use to backstop Gulf states carries a more explicit geo-strategic role: seeking to reward and bolster key allies in the region. - Kevin Warsh, in…