Tom Bilyeu's Impact Theory
Gold Just Had Its Worst Week In 43 Years — During An Active War. Something Is Wrong With The System Beneath It | Tom's Deep Dive
Banks do this constantly, every day, to make sure they have enough cash on hand to keep operating.
Tom Bilyeu's Impact Theory
Gold Just Had Its Worst Week In 43 Years — During An Active War. Something Is Wrong With The System Beneath It | Tom's Deep Dive
It's the most basic fundamental form of liquidity in the entire financial system.
Tom Bilyeu's Impact Theory
Gold Just Had Its Worst Week In 43 Years — During An Active War. Something Is Wrong With The System Beneath It | Tom's Deep Dive
When the repo market gets weird, when the interest rates spike unexpectedly, or when banks start getting cagey about who they'll lend to overnight, it is one of the earliest warning signs that trust between financial institutions is starting to fray.
Tom Bilyeu's Impact Theory
Gold Just Had Its Worst Week In 43 Years — During An Active War. Something Is Wrong With The System Beneath It | Tom's Deep Dive
And right now, it's fraying.
Tom Bilyeu's Impact Theory
Gold Just Had Its Worst Week In 43 Years — During An Active War. Something Is Wrong With The System Beneath It | Tom's Deep Dive
One of the clearest signals of this fraying comes from something known as the cross currency basis.
Tom Bilyeu's Impact Theory
Gold Just Had Its Worst Week In 43 Years — During An Active War. Something Is Wrong With The System Beneath It | Tom's Deep Dive
This is one of the most precise pressure gauges in the entire global monetary system.
Tom Bilyeu's Impact Theory
Gold Just Had Its Worst Week In 43 Years — During An Active War. Something Is Wrong With The System Beneath It | Tom's Deep Dive
I'll explain what it means in a minute, but for now just know it dropped hard in the fall of 2024 and that is a very bad sign.
Tom Bilyeu's Impact Theory
Gold Just Had Its Worst Week In 43 Years — During An Active War. Something Is Wrong With The System Beneath It | Tom's Deep Dive
The cross currency basis specifically measures the cost of accessing dollars through the swap market.
Tom Bilyeu's Impact Theory
Gold Just Had Its Worst Week In 43 Years — During An Active War. Something Is Wrong With The System Beneath It | Tom's Deep Dive
It's always the dollar versus some other currency in the swap market.
Tom Bilyeu's Impact Theory
Gold Just Had Its Worst Week In 43 Years — During An Active War. Something Is Wrong With The System Beneath It | Tom's Deep Dive
So it's dollar to the euro, dollar to yen, dollar to the Swiss franc, and so on.
Tom Bilyeu's Impact Theory
Gold Just Had Its Worst Week In 43 Years — During An Active War. Something Is Wrong With The System Beneath It | Tom's Deep Dive
Each pair has its own basis reading, but they all tell the same thing from different angles.
Tom Bilyeu's Impact Theory
Gold Just Had Its Worst Week In 43 Years — During An Active War. Something Is Wrong With The System Beneath It | Tom's Deep Dive
How hard is it to get dollars right now?
Tom Bilyeu's Impact Theory
Gold Just Had Its Worst Week In 43 Years — During An Active War. Something Is Wrong With The System Beneath It | Tom's Deep Dive
And what premium are people paying to get those dollars?
Tom Bilyeu's Impact Theory
Gold Just Had Its Worst Week In 43 Years — During An Active War. Something Is Wrong With The System Beneath It | Tom's Deep Dive
When analysts talk about the cross currency basis as a system-wide signal, they're typically looking at the dollar basis across multiple USD to other currency pairs simultaneously.
Tom Bilyeu's Impact Theory
Gold Just Had Its Worst Week In 43 Years — During An Active War. Something Is Wrong With The System Beneath It | Tom's Deep Dive
When they're all moving negative together, that's the signal.
Tom Bilyeu's Impact Theory
Gold Just Had Its Worst Week In 43 Years — During An Active War. Something Is Wrong With The System Beneath It | Tom's Deep Dive
It means the dollar is harder to get and is therefore spiking in value against these other currencies.
Tom Bilyeu's Impact Theory
Gold Just Had Its Worst Week In 43 Years — During An Active War. Something Is Wrong With The System Beneath It | Tom's Deep Dive
And when it isn't isolated to one region or one currency,
Tom Bilyeu's Impact Theory
Gold Just Had Its Worst Week In 43 Years — During An Active War. Something Is Wrong With The System Beneath It | Tom's Deep Dive
Whatever the problem is, it's global.
Tom Bilyeu's Impact Theory
Gold Just Had Its Worst Week In 43 Years — During An Active War. Something Is Wrong With The System Beneath It | Tom's Deep Dive
Starting in the fall of 2024, the cross currency basis dropped very rapidly, meaning everyone trying to get dollars was suddenly paying a premium.
Tom Bilyeu's Impact Theory
Gold Just Had Its Worst Week In 43 Years — During An Active War. Something Is Wrong With The System Beneath It | Tom's Deep Dive
Said another way, traders used to get a dollar for every dollar's worth of value in their local currency that they were swapping for dollars.