# Bretton Woods 3?

## The Big Dollar-short

In 2019, [shadow banking was money market funding of capital market lending](https://www.ceu.edu/sites/default/files/attachment/event/6574/nov05-perry-mehrling.pdf) 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**
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**OFAC is far-far more powerful than either the FOMC or FSOC at the moment**⏎
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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

- https://en.wikipedia.org/wiki/Marshall_Plan

## Bretton Woods 3 - [Zoltan Pozsar on podcast](https://podcasts.apple.com/us/podcast/odd-lots/id1056200096?i=1000556504548)

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)**. ⏎
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**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](https://www.ft.com/content/f18cf835-02a0-44ff-875f-7de7facba54e)

The Chinese renminbi can be a challenger to the US dollar, but it won’t replace it







# Parents

* Fin Ecosystems