Goldilocks’ Comments and Global Economic News Tuesday AM 1-2-24
Good Morning
Do you remember those SOFR lending rates that came into effect Globally for the markets and banking system on July 1st, 2023? You know, those that are backed by gold?
The old lending system called Libor operated under uncollateralized units of account in overnight trading to provide liquidity.
SOFR is collateralized by US Treasuries bringing in a more accurate system of lending and liquidity based on real values and cannot be manipulated.
US Treasury Notes such as a US 10 Year Treasury Note pays out at new rates every six months even though it may have a 2,5, 10-year or more duration. And, it pays the face value to the holder at maturity.
Our first round of liquidity for the markets and the banking system under the SOFR lending system pays out early this week.
© Goldilocks
Investopedia Link
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“Oil traders around the world are gradually shifting away from using the US dollar
Recent reports say major economic powerhouses have used alternative currencies in oil trades in recent times
Most oil deals in the last year have been settled primarily in the Chinese yuan”
For these reasons, many countries are beginning to call for a market-based determination on the dollar.
A market-based determination is a careful analysis that compares prices of one asset to another.
In this case, we are looking at a comparable analysis among other countries’ currencies in the use of buying and selling oil with currencies other than the dollar.
This type of price analysis will determine exchange rate changes needing to be done to coordinate reasonable values between countries.
Watch the water.
© Goldilocks
IBS News Link
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This is the year of determining new valuation prices of all currencies around the world.
© Goldilocks
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New Year’s message from President Christine Lagarde
https://youtu.be/-NhSnQ7gwG0?feature=shared
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Just a reminder, Japan did an in-country test on the QFS on Christmas Day.
India and a handful of other countries are doing an International pilot test on the QFS starting today. Pilot tests usually run at least 30 days that will take us to January 30th, 2024.
On January 30th, 2024, the rest of the world will begin rolling out their connections to the QFS and utilizing the system.
Each phase along the way will have a set of countries no longer using the US dollar in trade as the World Reserve Currency.
This does not mean that all of them will make that decision, but it will level the playing field for countries around the world that want to start utilizing their own currencies.
These new demands will increase the value of all the currencies involved inside this transition creating a Global Currency Reset through new trading volumes making their way into the Global Market.
Watch the water.
© Goldilocks
Wolfstreet Link
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Banking Announcement:
The Banking (Capital) (Amendment) Rules 2023 (BCAR), the Banking (Disclosure) (Amendment) Rules 2023 (BDAR), the Banking (Exposure Limits) (Amendment) Rules 2023 (BELAR), and the Banking (Liquidity) (Amendment) Rules 2023 (BLAR) were gazetted today (December 29) to implement the latest capital standards and associated disclosure requirements promulgated by the Basel Committee on Banking Supervision (BCBS) under the Basel III reforms, together with other related updates for the prudential regulation of banks in Hong Kong.
https://www.info.gov.hk/gia/general/202312/29/P2023122800453.htm
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The gold standard was a part of the global economy for nearly half a century. The United Kingdom introduced it in 1861. Back then, countries used to secure their currency against this precious yellow metal. However, the system couldn’t work for fiat currencies for a long time due to many reasons.
But now, the gold standard seems to be coming back with cryptocurrencies. That’s right, a large number of cryptocurrencies are now being underpinned by gold. Again, there are many reasons leading to this event. From the investors’ perspective, it’s important to gain a complete understanding of it. So let’s delve deeper and see what’s giving a push to these crypto variants.
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BRICS Announcement:
The BRICS memberships of Saudi Arabia, Egypt, the United Arab Emirates, Iran and Ethiopia officially took effect on Monday.
The countries were invited to join the group in August 2023 after the 15th BRICS Summit in Johannesburg, South Africa. The Standard Link
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