Josh Younger on the Surprising Origins of Eurodollars and Petrodollars
Odd Lots
Bloomberg
4.4 • 1.6K Ratings
🗓️ 19 June 2023
⏱️ 56 minutes
🧾️ Download transcript
Summary
De-dollarization is all the rage right now, with lots of talk about whether the US currency will be able to maintain its dominant status in the global financial system. But regardless of what happens in the future, it's worth asking how we got to this point originally. How is it that the dollar came to dominate not just global trade flows but also became the currency of choice for things like buying oil? And why are there large pools of eurodollars sitting outside the United States? In this episode, we speak with Josh Younger, formerly of JPMorgan Chase and now a senior adviser at the Federal Reserve Bank of New York, about the surprising policy decisions that went into creating eurodollars and petrodollars, and why they matter now.
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| 0:56.3 | Hello and welcome to another episode of The Adlots Podcast. I'm Tracy Alloway. |
| 1:13.8 | And I'm Joe Wyzenthal. Joe, de-dollarization. There's a lot of annoying stuff in there. |
| 1:19.1 | Yeah, we're still talking about that. No, it is, it's interesting because |
| 1:24.2 | yes, it's like this sort of, I don't know, associated with cranks and stuff. |
| 1:28.3 | But if you actually take this subject seriously about why the dollar is what it is and where it is, |
| 1:33.5 | there's many sort of illuminating some conversations to be had. |
| 1:37.6 | Yes, so it is a theme that tends to be dominated by a certain type of person. But setting that aside, |
| 1:44.9 | one thing that's good about it is it actually gives us a peg to go back and look in-depth |
| 1:50.3 | at the financial system and ask, well, why is it designed this way? Why is it built this way? |
| 1:55.3 | Why did dollars become popular as FX reserves in the first place? And beyond that, why do we seem to |
| 2:02.6 | have all these different types of dollars? So we have euro dollars, which hopefully everyone |
| 2:08.0 | has heard of before. We have petro dollars. There are all these different flavors of dollars |
| 2:13.5 | floating around the financial system. Right. There's two interesting points to me. One is like this |
| 2:18.8 | conversation allows us to go back and look at things like, well, why are things the way they are, |
| 2:23.2 | which is helpful? And a recent episode we did with Karthik Sankaran was good on that. |
| 2:28.0 | And then to your point, there is no single thing, the dollar. And maybe if someone thinks the dollar, |
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