Jim’s Mailbox

Posted at 9:28 AM (CST) by & filed under Jim's Mailbox.

From our good friend Robert, I respect him and his opinion immensely!

Bill

Italy today launched new debt in US dollars instead of Euro hoping to attract dollar investors as the Euro market continues to show signs of stress. They issued USD2.5bn 5yr, USD2bn 10yr, USD2.5bn 30yr

We are in the end game now as the the EU and the Euro to have Euro members begin issuing debt in US dollars. This is going to create further tensions between the Fed and ECB moving forward. The REPO market is still in crisis and the fears are evident in Europe behind the curtain continue. This all puts the FED and the ECB on a collision course.

It why I have for months been saying the only currency for trade Finance or mezzanine debt or equity is in USD as it is the only practical debt settlement. Even Bitcoin settlement in USD is preferred over Euro and this was not the case 6 months ago. This begs the question of why people are going there as there is a scarcity of dollars.

Today’s  event is not a canary in a coal mine but a eruption of a volcano, particularly as more countries start to turn to USD financing.