They know who they are.
That September 26* reversal of the almost-1100-year downtrend** has the potential to cause chaos and destroy the last vestiges of Bretton Woods:
From Reuters via ChannelNewsAsia, December 5:
LONDON: Pension funds and other 'non-bank' financial firms have more than US$80 trillion of hidden, off-balance sheet dollar debt in FX swaps, the Bank for International Settlements (BIS) said.
The BIS, dubbed the central bank to the world's central banks, also said in its latest quarterly report that 2022's market upheaval had largely been navigated without major issues.
Having repeatedly urged central banks to act forcefully to dampen inflation, it struck a more measured tone and picked over crypto market troubles and September's UK bond market turmoil.
Its main warning concerned what it described as the FX swap debt "blind spot" that risked leaving policymakers in a "fog".
FX swap markets, where for example a Dutch pension fund or Japanese insurer borrows dollars and lends euro or yen before later repaying them, have a history of problems.
They saw funding squeezes during both the global financial crisis and again in March 2020 when the COVID-19 pandemic wrought havoc that required central banks such as the US Federal Reserve to intervene with dollar swap lines.
The US$80 trillion-plus "hidden" debt estimate exceeds the stocks of dollar Treasury bills, repo and commercial paper combined, the BIS said. It has grown from just over US$55 trillion a decade ago, while the churn of FX swap deals was almost US$5 trillion a day in April, two thirds of daily global FX turnover....
....MUCH MORE
Here's the BIS, Dec. 5: "The global foreign exchange market in a higher-volatility environment". It's part of the much more extensive Quarterly Review.
*As noted in this September 26, 2022 post: "What The Hell Is Going On In Britain? Izabella Kaminska Has Some Thoughts":
From The Blind Spot, September 26:
Spot Markets Live Transcript: 26/09/22
*****
"I don’t know about you but it feels like there’s something very paradigm-shifting going on."
*****
....MUCH MORE
Remember: a paradigm is 20 cents.Also remember: a pair of dimes used to be worth a lot less vs the pound:
**928: Athelstan, the first King of England adopted sterling as the first national currency. He set up mints around the country to supply the growing nation.
One pound could buy you 15 cows.
1717: The United Kingdom defined sterling's value in terms of gold rather than silver for the first time.
Sir Isaac Newton, as Master of the Mint, set the gold price of £4.25 per fine ounce that lasted two hundred years, except during the Napoleonic wars when gold cash payments were suspended.
1925: £1 equivalent to $4.86.
1949: Exchequer announces formal 30% devaluation, $4.03 to $2.80.
1964/65: [sterling crisis, cap in hand to the BIS and IMF]
1967: Formal devaluation, $2.80 to $2.40
— Prime Minister Harold Wilson, 1967“It does not mean that the pound here in Britain, in your pocket or purse or in your bank, has been devalued."
Sources:
https://www.weforum.org/agenda/2016/06/a-short-history-of-the-british-pound/
1.06583 last.
On the bovine standard 1 GBP = 1 MCD regular hamburger.
Down from 15 cows
