Right here’s a brand new Three Minute Macro video on the Triffin Dilemma and why it issues greater than ever.

The fundamental gist of the video is that the reserve foreign money issuer within the world financial system has an inherent battle. The remainder of the world wants their foreign money not just for overseas commerce, however for reserve upkeep and commerce since that foreign money operates because the most secure and most generally used foreign money. However the reserve foreign money issuer additionally must be vigilant about foreign money issuance in order to keep away from devaluing the foreign money.

That is particularly necessary at this time as a result of the USA has an inflation drawback so the Fed is tightening financial coverage and the Treasury has tightened fiscal coverage. However the USD is surging, partially, as a result of greenback demand is surging as a result of the remainder of the world wants {dollars}. So there’s this unusual paradox at work the place the remainder of the world desires {dollars} in an more and more low high quality asset world, however the USA doesn’t need to provide them.

How will all of it unfold? Nobody actually is aware of, however the one factor that’s sure is that the Fed’s charge hikes are prone to have unintended penalties that would make issues worse, not higher.

I hope you benefit from the video and study one thing new.