Visualizing $65 Trillion in Hidden Dollar Debt
This was originally posted on Elements. Sign up to the free mailing list to get beautiful visualizations on natural resource megatrends in your email every week.
The scale of hidden dollar debt around the world is huge.
No less than $65 trillion in unrecorded dollar debt circulates across the global financial system in non-U.S. banks and shadow banks. To put in perspective, global GDP sits at $104 trillion.
This dollar debt is in the form of foreign-exchange swaps, which have exploded over the last decade due to years of monetary easing and ultra-low interest rates, as investors searched for higher yields. Today, unrecorded debt from these foreign-exchange swaps is worth more than double the dollar debt officially recorded on balance sheets across these institutions.
Based on analysis from the Bank of International Settlements (BIS), the above infographic charts the rise in hidden dollar debt across non-U.S. financial institutions and examines the wider implications of its growth.
Dollar Debt: A Beginners Guide
To start, we will briefly look at the role of foreign-exchange (forex) swaps in the global economy. The forex market is the largest in the world by a long stretch, with trillions traded daily.
Some of the key players that use foreign-exchange swaps are:
Corporations
Financial institutions
Central banks
To understand forex swaps is to look at the role of currency risk. As we have seen in 2022, the U.S. dollar has been on a tear. When this happens, it hurts company earnings that generate revenue across borders. That’s because they earn revenue in foreign currencies (which have likely declined in value against the dollar) but end up converting earnings to U.S. dollars.
In order to reduce currency risk, market participants will buy forex swaps. Here, two parties agree to exchange one currency for another. In short, this helps protect the company from unfavorable foreign exchange rates.
What’s more, due to accounting rules, forex swaps are often unrecorded on balance sheets, and as a result are quite opaque......More Below
https://www.visualcapitalist.com/visualizing-65-trillion-in-hidden-dollar-debt/
The prices of some life-saving medicines have soared to levels that are unaffordable for ordinary people in Venezuela as the United States has ramped up military presence in the Caribbean off Venezuela's coast, alongside escalating sanctions, blockades and military threats against the oil-rich South American nation since late August.
https://www.presstv.ir/default/Embeded/761400
At a northeastern suburb in the capital city Caracas, locals can still purchase most of the commonly used medicines at a major supermarket, where some antibiotics have been sold out, and some first-aid medicines and supplies have become too costly for ordinary residents.
"I'm here mainly to buy antibiotics. I have problems with my lungs. But I can't get all I want, such as vancomycin," said a resident named Alfonso.
"Recent tensions have affected the supplies and prices of drugs. The prices of cancer drugs, insulin drugs and albumin are very high, and most patients here cannot afford them," said Giovanna Gonzalez a ...
Russian President Vladimir Putin says Moscow is prepared to use military force to achieve the goals of its special military operation if Ukraine continues to delay peace talks.
During an inspection of a Russian armed forces command post on Saturday, Putin stressed that Moscow will not allow Kiev’s obstruction to prevent progress.
“If the Kiev authorities do not want to resolve the matter peacefully, we will accomplish all the tasks before us in the course of the special military operation by military means,” he said.
The Russian leader noted that the Ukrainian authorities are not moving toward a peaceful resolution, adding, “We see that even today, unfortunately, the leaders of the Kiev regime are in no hurry to resolve this conflict peacefully. I spoke about this a year ago in a speech at the Ministry of Foreign Affairs.”
Putin also received reports from Chief of General Staff Valery Gerasimov and commanders of Russia’s “Centre” and “East” military groups.
Meanwhile, ...
