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Reserve Currency is Constrained, say Swap Spreads [Eurodollar University, Ep. 195]
A look at interest rate swap spreads relative to nominal US Treasury yields identifies constrained bank balance sheet capacity. Monetary measures like swap spreads, Eurodollar futures, yield curve flattening are all indicating that the balance of risks is tilting away from recovery and reflation.
------EP. 195 TOPICS------
00:00 INTRO: Interest rate swap spreads are a peek at bank balance sheet capacity.
01:43 Bank balance sheet capacity represents ledger money; the reserve currency, eurodollar.
03:04 If bank balance sheet capacity is not available, swap spreads will show it.
08:53 Comparing…
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