{"id":6338,"date":"2015-03-09T05:38:39","date_gmt":"2015-03-09T10:38:39","guid":{"rendered":"http:\/\/olduvai.ca\/?p=6338"},"modified":"2015-03-09T05:38:39","modified_gmt":"2015-03-09T10:38:39","slug":"the-global-dollar-funding-shortage-is-back-with-a-vengeance-and-this-time-its-different","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=6338","title":{"rendered":"The Global Dollar Funding Shortage Is Back With A Vengeance And &#8220;This Time It&#8217;s Different&#8221;"},"content":{"rendered":"<h3 class=\"title\"><a href=\"http:\/\/www.zerohedge.com\/news\/2015-03-08\/global-dollar-funding-shortage-back-vengeance-set-surpass-lehman-crisis-levels\" target=\"_blank\">The Global Dollar Funding Shortage Is Back With A Vengeance And &#8220;This Time It&#8217;s Different&#8221;<\/a><\/h3>\n<p>The last time the world was sliding into a US dollar shortage as rapidly as it is right now, was following the collapse of Lehman Brothers in 2008. The response by the Fed: the issuance of an unprecedented amount of FX liquidity lines in the form of swaps to foreign Central Banks. The &#8220;swapped&#8221; amount went from practically zero to a peak of $582 billion on December 10, 2008.<\/p>\n<p><a href=\"http:\/\/www.zerohedge.com\/sites\/default\/files\/images\/FX%20Swaps%20and%20DXY.jpg\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/www.zerohedge.com\/sites\/default\/files\/images\/FX%20Swaps%20and%20DXY_0_0.jpg\" alt=\"\" width=\"498\" height=\"339\" \/><\/a><\/p>\n<p>The USD shortage back, and the Fed&#8217;s subsequent response, was the topic of one of our most read articles of mid-2009, &#8220;<a href=\"http:\/\/www.zerohedge.com\/article\/how-federal-reserve-bailed-out-world\">How The Federal Reserve Bailed Out The World<\/a>.&#8221;<\/p>\n<p>As we discussed back then, this systemic dollar shortage was primarily the result of imbalanced FX funding at the global commercial banks, arising from first Japanese, and then European banks&#8217; abuse of a USD-denominated asset-liability mismatch, in which the dollar being the funding currency of choice, resulted in a massive matched synthetic &#8220;Dollar short&#8221; on the books of commercial bank desks around the globe: a shortage which in the aftermath of the Lehman failure manifested itself in what was the largest global USD margin call in history. This is\u00a0<a href=\"http:\/\/www.bis.org\/publ\/work291.pdf?noframes=1\">how the BIS described first the mechanics of the shortage:<\/a><\/p>\n<p>&nbsp;<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Global Dollar Funding Shortage Is Back With A Vengeance And &#8220;This Time It&#8217;s Different&#8221; The last time the world was sliding into a US dollar shortage as rapidly as it is right now, was following the collapse of Lehman Brothers in 2008. The response by the Fed: the issuance of an unprecedented amount of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[951,4023,303,305,2022,4026,4025,839,4024],"class_list":["post-6338","post","type-post","status-publish","format-standard","hentry","category-economics","tag-currency","tag-dollar-funding-shortage","tag-fed","tag-federal-reserve","tag-fx","tag-margin-call","tag-swap-lines","tag-us-dollar","tag-us-dollar-shortage"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/6338","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6338"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/6338\/revisions"}],"predecessor-version":[{"id":6339,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/6338\/revisions\/6339"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6338"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6338"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6338"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}