US Dollar Dominance Dramatically Lost Global Footprint Since GFC (2008)
The growing footprint of the Emerging Markets Economy (EME) banks in the international banking system1
This growing footprint has created an opportunity for investors. What many people don’t understand or realize, due to the dollar being the strongest go-to fiat currency over the last decade especially since 2008 and the Great Financial Crisis (GFC), is that EME banks have been side-stepping the use of the dollar in global trade. This has created a Once-in-a-Lifetime Opportunity Trade; a trade so large in its magnitude, when positioned correctly, it could turn average wealth into the kind of wealth that currently only the top one percent have enjoyed. To reap these rewards, it is important to be positioned correctly. This is where Brett Edgell, Monetary Specialist and Brett Edgell, Inc. with ENI, Inc. and our combined experience over the last 50 years assures our clients the best possible outcome.
This special feature explores the role of banks from emerging market economies (EMEs) in global banking. Over the past decade, the cross-border activity of EME banks has been growing at a faster pace than that of banks from advanced economies. This has been largely driven by increasing EME-to-EME inter-linkages, which often make up more than half of EMEs’ cross-border borrowing. EME banks make use of their global networks of affiliates abroad for the majority of their cross-border lending to other EMEs. In the cross-border interbank market, EMEs with more developed banking systems tend to be net recipients of funds, whereas EMEs with less developed ones tend to be net providers.
JEL classification: F34, F36, G21.
Emerging market economies (EMEs) have substantially increased their footprint in the global economy over recent decades. They now produce about 40% of global GDP at market exchange rates, and contributed approximately two-thirds of 2017 global GDP growth.
In this special feature, we document how the growing economic importance of EMEs has gone hand-in-hand with a rapidly increasing presence of EME banks in global banking. We use the locational data of the BIS international banking statistics (IBS) and focus on banks’ nationality, while distinguishing between the business of banks’ headquarter offices and that of their affiliates abroad. As of mid-2018, the IBS data set comprises data from 47 reporting countries and covers about 95% of total cross-border claims.2 Recent increases in the number of EMEs that report to the IBS (eg China and Russia starting in 2016, and the Philippines in 2017) and recent statistical enhancements offer unique insights into EME banks’ global activity.3
In 2009, when the G20 first voted to return to Sound Money and the Bretton Woods Agreement, our global monetary system was not ready for the International Monetary Reset. Today it is basically a matter of flipping the switch. As I see it, the United States is still in the best position to remain the world's reserve currency. However, to do so, the United States will have to give the world what it wants. This will allow the United States to continue as number one into the 21st Century.
The world wants equality and sound money.
We have the power to give the world what it wants. America has been a world leader throughout the 20thCentury. To be relevant in the 21stCentury and a good steward to our fellow neighbors, it is time to level the playing field and bring what is needed to our global economy, while giving our children and their children a system they can build a future upon.
Now is the Time!
Investors – Every trade has a winning side and a losing side. As this has been unfolding over the last decade, it has become very clear to me. The investors that have kept a balanced position of precious metals in their portfolios have already and will continue to benefit the most from this international monetary reset. To position yourself with the best possible precious metals portfolio and to be on the winning side of this trade, contact: Brett Edgell at Brett Edgell, Inc. I can also be reached through ENI, Inc. in Garden City, NY. Make the appointment to secure your legacy, before the reset of our International Monetary System. Please don't hesitate feel free to call anytime.