Sunny morning started to heat up towards maybe 93 degrees but then clouds formed so looks like a rainy no sun week. Hard to get much heat here because heat evaporates water, forming clouds, and then rain cool down. Large lakes and water everywhere.
You hit the nail on the head. The post-WWII USA statistical systems are designed to focus on the USA because we were the main industrial power after the rest of the world blew itself up in WWII (with our assistance). Now we need new data and new theories for what is going on in other countries around the world. Much US$ has gone overseas, sitting in banks, used as paper currency, funding the black market for drugs, weapons, pay for dictators, human trafficking, and other contraband and illegal uses. Or loaned out by the World Bank etc. to corrupt dictators, concubines and crooks who use it to fund terrorists or inflate LA SF NYC house prices. The rich 1% fat cats are using loose US$ to conspire with each other to oppress the poor 99% moral majority.
USA needs to retrieve those lost $ to help the USA economy, not overseas crooks and dictators. I think foreign use of USA$ should be forbidden. Use our nukes if needed to bring our $ home. If we can keep the $ in the USA and do more of our own manufacturing and food growing then we don’t need new theories on how to cope with the mess we have now. Such as trillions of dollars lost in foreign banks and loans for perhaps nefarious purposes inimical to USA — our $ working against USA. Why Bernanke and Yellen cannot produce inflation — people got no $ so we get no inflation. 50,000,000 Americans on food stamps because their money has been stolen! Veterans dying because they cannot even get appointments at the VA! Bring our $ home to support the USA economy. Suspend taxes for 10 years. Give veterans bonuses. Pay off veteran mortgages. Give all citizens $10,000 cash. Pay off the national debt. Use US$ for USA needs.
The Federal Reserve reported that about $800 billion in currency—that is, paper money and coins—was in circulation in 2006. Dividing the total currency by roughly 210 million U.S. adults over the age of 18 works out to an average of approximately $3,800 in currency for every man and woman.
Federal Reserve Bank of San Francisco have a short essay:
“What’s in Your Wallet? The Future of Cash.” They offer evidence for the intriguing fact that in an economy with increasing use of credit cards, debit card and electronic transfers, the amount of cash outstanding has kept growing. But they don’t tackle what to me is the most intriguing question in this area: Who is holding all this currency?
Facts first. As Gerst and Wilson write: “Over the past few decades, the dominant position of cash as a store of value and a means of payment has increasingly been challenged. The growth of electronic payments, especially credit cards and, more recently, debit cards, has radically changed the role of cash in the global economy. Yet, the circulation of the U.S. dollar, the world’s most widely used currency, has continued to grow without interruption. Last year, the value of U.S. currency in circulation reached nearly $1 trillion dollars.”
In late 1992, currency in the hands of the public was close to $300 billion, representing nearly 30 percent of M1. One would think that an economic variable of this magnitude would be well-analyzed and well-understood. Quite the contrary. The last serious surveys of currency holdings commissioned by the Federal Reserve were in 1984 and 1986. These surveys indicate that currency is not at all understood. Probably the most intriguing result of these surveys was that about 80 percent of currency holdings simply could not be explained. Despite the stir of general interest that followed those studies, economists have shown little lasting interest in considering the implications of these findings. This paper is written in hopes of stimulating more interest in currency behavior.
Eurodollars have nothing to do with the Euro currency. Eurodollars are time deposits denominated in U.S. dollars at banks outside the United States, and thus are not under the jurisdiction of the Federal Reserve. Consequently, such deposits are subject to much less regulation than similar deposits within the U.S., allowing for higher margins. after World War II, the quantity of U.S. dollars outside the United States increased enormously, as a result of both the Marshall Plan and imports into the U.S., which had become the largest consumer market after World War II. As a result, enormous sums of U.S. dollars were in the custody of foreign banks outside the United States. By December 1985 the Eurocurrency market was estimated to have a net size of 1,668B. However the markets are not responsible to any government agency so its growth is hard to estimate. The Eurodollar market is by a wide margin the largest source of global finance. In 1997, nearly 90% of all international loans were made this way
So why do managed futures like EuroDollars so much? The main reason is volume and liquidity, with EuroDollar futures the largest contract traded in the US at millions of contracts changing hands each day. “The volume in Eurodollars (traded at the CME) is beyond anything you gold and crude oil groupies can comprehend. volume figures for 2012: Gold – 43.8 million contracts
Crude Oil – 134.2 million contracts
Eurodollars – 425.1 million contracts
Yes, I agree that new approaches need to be made in the Fed. Too much reliance on old ideas that are not functioning in a world economy. They may have worked with a closed dollar economy; that is, where banks were controlled by the Fed and money distributed within U.S. only. Now with a world of wild influences and no dollar control, the expectations are far from accurate.
Worldwide use of the euro and US Dollar:
External adopters of the euro
Currencies pegged to the euro
Currencies pegged to the euro within narrow band
External adopters of the US dollar
Currencies pegged to the US dollar
Currencies pegged to the US dollar within narrow band