The US Dollar, Trump Indictment Postmortem, Elon's Memes
Twitter News digest for the week of 3/23-3/29
This week’s news digest covers the dollar’s status as the global reserve currency and gives a postmortem for the Trump indictment that never happened. Don’t miss Dogey Treats and Memes of the Week at the end!
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The US Dollar
Something is still brewing with banks and the financial system, but it’s hard to tell what.
The powers-that-be have assured the public that everything is fine. Last week, President Biden said the banking system was “safe,” Treasury Secretary Yellen called it “sound”, and Fed Chairman Powell said it was “strong.”
Still, hints and rumors have persisted online that the so-called “stealth banking crisis” isn’t over.
In a conversation with UFC fighter Jorge Masvidal, Joe Rogan picked up the mood:
“If you let too many people know what’s going on, it could collapse the economy, if you let too many people panic […] if Elon Musk got on Twitter and said get your money out now, invest in gold, invest in Bitcoin, do something else, people would fucking panic”
Just a few hours later, Elon was in Joe Biden’s replies, tweeting, “the banks are melting.”
The same day, a clip went viral of Chinese President Xi Jinping and Vladimir Putin at the Kremlin talking about “change that hasn’t happened in 100 years,” which fueled rumors that BRICS nations were planning to drop the dollar as the global reserve currency.
The next day, Putin said he supported use of Chinese yuan to settle trade with countries in Asia, Africa, and Latin America.
Then, on Sunday, a clip made the rounds of Kenyan President William Ruto urging citizens to swap dollars for other currencies.
Monday, several Twitter accounts reported that Kenya had struck a deal with Saudi Arabia and the UAE to conduct oil trade in Kenyan schillings instead of dollars.
Speculation about the dollar’s status even found its way into legacy media.
First, CNN’s Fareed Zakaria contemplated a world in which China and Russia dumped the dollar.
Later, Fox News did an interview with former Assistant Treasury Secretary Monica Crowley on the dollar’s evident weakness.
Elon responded to the video with the analysis that “US foreign policy now dropping below bronze tier.”
Here are some of the other happenings in the financial world from the last week:
Federal Reserve raised interest rates by 25 bps on Wednesday; the Federal Reserve increased its balance sheet for the second straight week and has added $390B of assets in total over the last two weeks
The cost of Credit Default Swaps (the cost to insure bond holders against default) on Charles Schwab and Deutsche Bank surged last week; Deutsche Bank stock tumbled on Friday; a European Central Bank regulator warned about the impact of CDS on bank deposits
On Friday, Treasury Secretary Janet Yellen convened an emergency meeting of top financial regulators, including Jerome Powell and Gary Gensler
Moody’s warned that the banking crisis could spill over into the broader US economy
Deposits continued to flee small banks and concentrate in large banks
Putin said the US “shoots itself in the foot” by weaponizing the dollar for political purposes
Asia Times published an editorial titled, “US bank trouble heralds end of dollar reserve system”
Elon flagged commercial and residential real estate as “the most serious looming issue” with banks
Trump released a video blaming the banking crisis on the Biden administration and Congress
French authorities raided five major banks as part of a $100 billion fraud investigation
On Tuesday, Biden said the banking crisis is “not over yet”
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