Europe running out of dollars as US coaxes companies to bring money home

Europe running out of dollars as US coaxes companies to bring money home The European inter-bank market is going through the biggest shortage of US-dollar liquidity in nearly nine years. According to analysts, US tax reform may be behind the largest deficit since the financial crisis. As the Federal Reserve took a more hardline position towards the US monetary policy, LIBOR, a benchmark rate tied to finance products and debts of over $350 trillion, soared to the highest level in over eight years. Current unsecured dollar loans for the last three months are forcing European banks pay 2.2 percent in annual interest, according to financial news website Finanz.ru In general, global growth rates of monetary supply have dropped to a minimal level since 2007, McKinnon says. According to the data, compiled by Money Moves Markets, this rate in China slowed down from 10 percent in 2016 to the current two percent, while in Japan – from six to two percent. In the US, the monetary supply is shortening, while the enormous sovereign debt creates a strong need for cash. After three rounds of quantitative easing, the Fed increased the balance by $3.5 trillion, but the US dollar debt was soaring faster than the money printing press by nearly $10 trillion a year. The analyst says that limited availability of dollars is able to trigger a new liquidity crisis, which can be followed by systemic financial crisis and global recession. READ MORE https://www.rt.com/business/421831-europe-runs-out-dollars/