Tom Bilyeu

All right, let's pick up where we left off.

Every time a global bank extends a dollar of credit, it creates Eurodollar money that did not exist just seconds before.

And every time that credit line matures and doesn't get renewed, that money ceases to exist.

I don't mean this as a metaphor.

This is not technically money creation.

However, this is real money appearing and disappearing based on the decisions of private banks operating outside

of any central bank's jurisdiction.

Now, that creates a critical vulnerability.

Unlike Federal Reserve dollars, which can sit on a balance sheet indefinitely, Eurodollar credit has a maturity date, typically a very short maturity date.

A lot of it only exists overnight.

The long-dated stuff is still only 30, 60, or 90 days.

These short durations sound like they should make the system safer, but in actuality, it does the exact opposite.

When a bank decides not to roll over a 30-day credit line, that money doesn't slowly wind down.

It doesn't taper.

It just disappears.

Sometimes in 30 days, sometimes overnight, the hole opens instantly.

And if hundreds of banks make that same cautious decision at the same time,

Which is exactly what happens when trust erodes.

The system doesn't slow, it just seizes up.

Now here's the question that everyone asks at this point as they begin to understand this.