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The End of Exorbitant Privilege: The Heavy Price of Maintaining the Dollar

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made the dollar the world?s reserve currency. Next, the petrodollar agreement with the Saudis in 1

[] [View in browser]( [View in browser]( [] MAR 17 2023 The End of Exorbitant Privilege: The Heavy Price of Maintaining the Dollar Network [] [] DON YOCHAM The Spiralling Cost of the Dollar Status Quo Here we go again. In 2008, to stave off the worst effects of the Great Financial Crises, the Federal Reserve doubled the supply of dollars from $800 billion to over $1.6 trillion. To keep the lights on over the next decade, that supply doubled again in spurts to $3.2 trillion. COVID-19 stimulus took us to over $6 trillion. And now that bank runs have put global financial contagion back on deck, we can expect another order of magnitude leap in dollar supply. Now, it’s worth pointing out the obvious and elegant irony of all this – today’s panic is a direct result of the Fed’s fleeting attempt to undo past bailouts. But what I hope is finally getting seared into everyone’s brain pan, is the pattern. Each successive crisis or government imperative doubles the cost of bailing out the economy. And each bailout creates more dependence and fragility. It allows unavoidable risks to fester and grow. That price is now unsustainable. Caught Between a Rock and a Rock The Federal Government finds themselves in the same pickle they were in in 2008. Don’t issue more debt for the Federal Reserve to buy and we get a deflationary collapse. Do issue more debt and inflation could run out of control. Only today, they’re staring down more debt, more fragility, way more inflation, and a debt ceiling debate that, all of a sudden, became vastly more acute. Now, governmental power structures don’t survive deflationary collapses. But they can scapegoat their way through runaway inflation. It’s a tried-and-true method of maintaining order. Which brings me to the biggest lesson of all: Yield power over money to any sovereign, and history proves they will abuse it. Expecting anything different makes as much sense as leaving a bowl of Skittles in the middle of a playground packed with 8-year-olds and hoping to come back in an hour to enjoy some. It doesn’t happen. Whether through clipping gold and silver from coins of old or by printing money to bail out banks and sustain excessive spending today, fiat debasement has all the surprise of a full moon. But I gotta admit, the U.S. has brilliantly managed their power of the purse over the last 70 years. Not to the advantage of savers, mind you. But, on balance, the United States' exorbitant privilege has worked out well for most Americans. At least so far. The secret to that success boils down to one simple fact: Very well-established network effects for the U.S. dollar. For decades, the dollar dominated nearly all global economic activity. It also fueled the rise of free humanity’s biggest threat. And here’s how they pulled it off. The Dollar Networks Burden The U.S. managed three incredible feats to allow them to debase the U.S. dollar and delay the negative effects of sovereign debasement. The first was coming out on top after World War II. The [Bretton Woods Agreement]( made the dollar the world’s reserve currency. Next, the petrodollar agreement with the Saudis in 1974 ultimately led to its use as the common denominator in all global trade, not just oil. And finally, our mercantilist policies with China during the 90s and most of this century. We fueled the rise of the Chinese economy by buying cheap Chinese goods with dollars. The Chinese used those dollars to buy U.S. Treasury debt, effectively lending those dollars back to us so we could keep buying more Chinese goods. Together, these factors – reserve currency status, petro-dollar payments, and the Chinese mercantilist quid pro quo – conveyed incredible networking effects to the U.S. dollar. This allowed America to export the inflationary effect of debasement to the rest of the world. But maintaining those network effects come with a heavy price. We play nice with despots. We overthrow regimes. And we wage war on countries that attempt to exit the dollar network. All the while, the strong U.S. dollar network makes it easier and cheaper to wage those wars than it would be otherwise. A virtuous cycle from a certain perspective as we barely notice the effects. But that exorbitant privilege is rapidly coming to an end. The global economy has split in two. Russia, China, Iran, and Saudi Arabia on one side, the West on the other. And that split cuts the dollar network in half. Whether Rubles, Yuan, or gold, the dollar’s influence wanes. Plus, Bitcoin yields an alternate money network far more powerful, and nowhere near as costly to maintain as our current fiat-based system. And as you can see with this week’s bank bailouts, the costs continue to rise. Think Free. Be Free. [] [] [] JEFFRY TURNMIRE’S MORNING MONSTER 🎥 Don’t Worry. It’s Fine. Looks like the Fed is back to doing what it does best: Bailing out banks. That means QT is now, once again, QE. In just one week, the Fed expanded its balance sheet by $440bn, reversing a third of the tightening it accomplished since the start of 2021. To that, you can add $152B panic borrowing by regional banks through the Fed’s Discount Window and you get $600 billion in a week. But Janet Yellen assures us everything is fine. As if things weren’t exciting enough, the FOMC makes a decision on rates next Wednesday. Who knows what the weekend will bring. But to find out what will move where on Monday, join me [Monday at 9:15am ET]( for “Morning Monster”. Every day, I livestream what I see as the day’s big movers… plus other trends you don’t want to miss. I’ll cover specific stocks I expect to move. Give you my rundown on all the major indices. Plus, I’ll take your requests to give whatever you want a good look. Be sure to join me Monday, at 9:15am ET [right here](. Jeffry [] [] JACK CARTER Google Stock Fire Sale Hey there, [Remember last summer when Google went on “sale” for a massive 95% OFF?]( A historic 20:1 split… There’s no doubt plenty of people just started buying up as many shares as they could… But I’m URGING YOU… please do not make that mistake because most investors have no clue there’s actually a bigger opportunity at hand thanks to that unbelievable split. And this Google opportunity is heating up in a unique way. [] We witnessed a HISTORIC moment in the stock market where two crucial lines crossed for the first time… And most investors didn't even realize it. The fact that options volume is now exceeding stock volume is a HUGE deal, because stocks move based on volume. So we’re seeing a brand new market environment where options may have a larger impact on a stock’s direction than underlying trading of the stock itself. In fact, stock moves may be harder to predict than ever before. And I’m going to let you in on a little secret that almost everyone missed… [Check out this training to learn how you could be potentially dominating in a market no matter if it's up, down or sideways!]( Trade well, Jack [] [] MAR 17 2023 The End of Exorbitant Privilege: The Heavy Price of Maintaining the Dollar Network [] [] DON YOCHAM The Spiralling Cost of the Dollar Status Quo Here we go again. In 2008, to stave off the worst effects of the Great Financial Crises, the Federal Reserve doubled the supply of dollars from $800 billion to over $1.6 trillion. To keep the lights on over the next decade, that supply doubled again in spurts to $3.2 trillion. COVID-19 stimulus took us to over $6 trillion. And now that bank runs have put global financial contagion back on deck, we can expect another order of magnitude leap in dollar supply. Now, it’s worth pointing out the obvious and elegant irony of all this – today’s panic is a direct result of the Fed’s fleeting attempt to undo past bailouts. But what I hope is finally getting seared into everyone’s brain pan, is the pattern. Each successive crisis or government imperative doubles the cost of bailing out the economy. And each bailout creates more dependence and fragility. It allows unavoidable risks to fester and grow. That price is now unsustainable. Caught Between a Rock and a Rock The Federal Government finds themselves in the same pickle they were in in 2008. Don’t issue more debt for the Federal Reserve to buy and we get a deflationary collapse. Do issue more debt and inflation could run out of control. Only today, they’re staring down more debt, more fragility, way more inflation, and a debt ceiling debate that, all of a sudden, became vastly more acute. Now, governmental power structures don’t survive deflationary collapses. But they can scapegoat their way through runaway inflation. It’s a tried-and-true method of maintaining order. Which brings me to the biggest lesson of all: Yield power over money to any sovereign, and history proves they will abuse it. Expecting anything different makes as much sense as leaving a bowl of Skittles in the middle of a playground packed with 8-year-olds and hoping to come back in an hour to enjoy some. It doesn’t happen. Whether through clipping gold and silver from coins of old or by printing money to bail out banks and sustain excessive spending today, fiat debasement has all the surprise of a full moon. But I gotta admit, the U.S. has brilliantly managed their power of the purse over the last 70 years. Not to the advantage of savers, mind you. But, on balance, the United States' exorbitant privilege has worked out well for most Americans. At least so far. The secret to that success boils down to one simple fact: Very well-established network effects for the U.S. dollar. For decades, the dollar dominated nearly all global economic activity. It also fueled the rise of free humanity’s biggest threat. And here’s how they pulled it off. The Dollar Networks Burden The U.S. managed three incredible feats to allow them to debase the U.S. dollar and delay the negative effects of sovereign debasement. The first was coming out on top after World War II. The [Bretton Woods Agreement]( made the dollar the world’s reserve currency. Next, the petrodollar agreement with the Saudis in 1974 ultimately led to its use as the common denominator in all global trade, not just oil. And finally, our mercantilist policies with China during the 90s and most of this century. We fueled the rise of the Chinese economy by buying cheap Chinese goods with dollars. The Chinese used those dollars to buy U.S. Treasury debt, effectively lending those dollars back to us so we could keep buying more Chinese goods. Together, these factors – reserve currency status, petro-dollar payments, and the Chinese mercantilist quid pro quo – conveyed incredible networking effects to the U.S. dollar. This allowed America to export the inflationary effect of debasement to the rest of the world. But maintaining those network effects come with a heavy price. We play nice with despots. We overthrow regimes. And we wage war on countries that attempt to exit the dollar network. All the while, the strong U.S. dollar network makes it easier and cheaper to wage those wars than it would be otherwise. A virtuous cycle from a certain perspective as we barely notice the effects. But that exorbitant privilege is rapidly coming to an end. The global economy has split in two. Russia, China, Iran, and Saudi Arabia on one side, the West on the other. And that split cuts the dollar network in half. Whether Rubles, Yuan, or gold, the dollar’s influence wanes. Plus, Bitcoin yields an alternate money network far more powerful, and nowhere near as costly to maintain as our current fiat-based system. And as you can see with this week’s bank bailouts, the costs continue to rise. Think Free. Be Free. [] [] [] JEFFRY TURNMIRE’S MORNING MONSTER 🎥 Don’t Worry. It’s Fine. Looks like the Fed is back to doing what it does best: Bailing out banks. That means QT is now, once again, QE. In just one week, the Fed expanded its balance sheet by $440bn, reversing a third of the tightening it accomplished since the start of 2021. To that, you can add $152B panic borrowing by regional banks through the Fed’s Discount Window and you get $600 billion in a week. But Janet Yellen assures us everything is fine. As if things weren’t exciting enough, the FOMC makes a decision on rates next Wednesday. Who knows what the weekend will bring. But to find out what will move where on Monday, join me [Monday at 9:15am ET]( for “Morning Monster”. Every day, I livestream what I see as the day’s big movers… plus other trends you don’t want to miss. I’ll cover specific stocks I expect to move. Give you my rundown on all the major indices. Plus, I’ll take your requests to give whatever you want a good look. Be sure to join me Monday, at 9:15am ET [right here](. Jeffry [] [] JACK CARTER Google Stock Fire Sale Hey there, [Remember last summer when Google went on “sale” for a massive 95% OFF?]( A historic 20:1 split… There’s no doubt plenty of people just started buying up as many shares as they could… But I’m URGING YOU… please do not make that mistake because most investors have no clue there’s actually a bigger opportunity at hand thanks to that unbelievable split. And this Google opportunity is heating up in a unique way. [] We witnessed a HISTORIC moment in the stock market where two crucial lines crossed for the first time… And most investors didn't even realize it. The fact that options volume is now exceeding stock volume is a HUGE deal, because stocks move based on volume. So we’re seeing a brand new market environment where options may have a larger impact on a stock’s direction than underlying trading of the stock itself. In fact, stock moves may be harder to predict than ever before. And I’m going to let you in on a little secret that almost everyone missed… [Check out this training to learn how you could be potentially dominating in a market no matter if it's up, down or sideways!]( Trade well, Jack [] [] ABOUT US: We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. Prosperity Pub provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. DISCLAIMER: FOR INFORMATION PURPOSES ONLY. The materials presented from Prosperity Pub are for your informational purposes only. Neither Prosperity Pub nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational purposes intended is at the user’s own risk. DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. Prosperity Pub is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions. Please visit [( for our full Terms and Conditions. [Unsubscribe]( This email was sent to {EMAIL} by Prosperity Pub 495 Town Plaza | Ponte Vedra | FL | 32081 [Prosperity Pub]( [] ABOUT US: We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. Prosperity Pub provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. DISCLAIMER: FOR INFORMATION PURPOSES ONLY. The materials presented from Prosperity Pub are for your informational purposes only. Neither Prosperity Pub nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational purposes intended is at the user’s own risk. DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. Prosperity Pub is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions. Please visit [( for our full Terms and Conditions. [Unsubscribe]( This email was sent to {EMAIL} by Prosperity Pub 495 Town Plaza | Ponte Vedra | FL | 32081 [Prosperity Pub](

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