Bretton Woods 3?
https://www.zerohedge.com/markets/era-financialized-fiat-dollar-standard-ending
The “fragmented political and economic situation” makes supply chains “fragile” and “less globalization means higher inflation and less productivity,” explained Fed Chair Powell, attempting to conduct monetary policy in a world growing increasingly political.
The Big Dollar-short
In 2019, shadow banking was money market funding of capital market lending yet again, but this time in the most unimaginable way: the “emerging market” was the U.S., which could only fund itself on the margin through the goodwill of relative value
Today, shadow banking is “money market funding of commodity trading”. Commodity traders guarantee price stability, not central banks
We usually think of money and its hierarchy in terms of instruments, prices, and intermediaries (gold, reserves, and deposits; secured, unsecured, and FX swaps; central banks, banks, and dealers, respectively), not in terms of money and state. But it’s now time to bring the state in as an extra layer in the hierarchy of money
OFAC is far-far more powerful than either the FOMC or FSOC at the moment
Inflation borne of shortages (commodities [due to Russian sanctions], goods [due to zero-Covid policies], and labor [due to excessive positive wealth effects]) is a whole different ballgame. You can’t QT or hike your way out of it easily…
https://en.wikipedia.org/wiki/Bretton_Woods_system
On 15 August 1971, the United States terminated convertibility of the US dollar to gold, effectively bringing the Bretton Woods system to an end and rendering the dollar a fiat currency
Bretton Woods 3 - Zoltan Pozsar on podcast
you can print money, but not commodities (takes longer to produce and requires much more labour and energy)
strong point (everybody talks about) - strong coupling between inflation and geopolitical risk (Ukraine war).
Can Fed control such type of inflation if commodity driven?
- conclusions... not convinced personally
less demand for dollars
positive Xccy basis
it seems Bretton Woods 3 is simply pre-Bretton Woods
TRIANGLE - price stability/inflation, financial stability, geopolitical stability
your(Russia) commodity, our (West) problem
compare A new world of currency disorder looms
The Chinese renminbi can be a challenger to the US dollar, but it won’t replace it