EndGame Macro
@onechancefreedm
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5 h
Why Washington Sold Euros First And Explained Later
The most revealing part of the U.S. intervention is how they did it.
The New York Fed executed euro sales on behalf of Treasury, while European policymakers were informed only after the trade was completed. That broke with decades of close consultation among major Western monetary authorities.
I do not think the timing was accidental.
Surprise Was Part Of The Strategy
FX intervention works partly through psychology. Authorities are not only buying one currency and selling another. They are trying to destroy the market’s confidence that a heavily leveraged trade is one way.
Advance consultation would have widened the circle of people aware of the operation, increased leakage risk and potentially allowed traders to position around it.
Acting first maximized shock value.
The message was that intervention could arrive without warning and through channels markets were not expecting.
Why Sell Euros Instead Of Dollars
The more interesting decision was using euro reserves rather than selling dollars.
The conventional approach would have been to sell dollars and buy yen. Instead, Treasury used euros.
That allowed Washington to support Japan without openly signaling that it wanted a broadly weaker dollar. It also avoided directly increasing dollar supply while confidence in U.S. financial assets matters.
There was another strategic benefit.
Japan can defend the yen by liquidating foreign reserves, including its enormous Treasury holdings. If yen weakness becomes persistent enough, Japanese intervention could eventually push U.S. yields higher precisely while Washington is already issuing enormous amounts of debt.
Using American foreign currency reserves helps absorb part of that burden before Japan’s currency problem becomes America’s bond market problem.
The Relationship With Europe Has Changed
The U.S. and European alliance remains important, but the financial relationship has become increasingly transactional. Tariffs, defense spending, technology regulation, industrial policy and economic sovereignty have all weakened the assumption that consultation automatically comes before action.
Europe has simultaneously become more uncomfortable with its dependence on American financial infrastructure.
European officials have already explored contingency plans for a world in which access to Federal Reserve dollar swap lines becomes less certain.
That concern reveals the structural imbalance underneath the relationship.
European banks and corporations carry enormous dollar liabilities.
The ECB cannot create dollars.
The Federal Reserve can.
Europe can pool reserves, deepen euro markets and pursue greater strategic autonomy, but none of those currently reproduces the Fed’s ability to manufacture emergency dollar liquidity at global scale.
The Larger Message
I would not argue that the operation was designed specifically to humiliate Europe. There is no evidence of that.
But the precedent matters.
Washington demonstrated that when it believes U.S. financial stability or the global dollar system is at risk, it may act first and consult allies afterward.
Selling euros while keeping the ECB outside the decision loop also exposed the monetary hierarchy Europe has spent years trying to reduce.
Europe controls the euro.
But much of Europe’s financial system still depends on dollars.
That dependence becomes most important precisely when markets are breaking.
The old postwar model was built around coordination first and action second. This episode suggests Washington may increasingly reverse that order when core U.S. financial interests are involved.
The intervention was therefore about more than the yen. It showed that control over global dollar liquidity remains one of America’s most powerful forms of leverage, and that Washington appears increasingly willing to use that position transactionally when its own financial interests are at stake.
NEXTA
@nexta_tv
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50 m
💀 Russia’s “Microsoft Office killer” has killed itself
MyOffice, promoted as Russia’s homegrown alternative to Microsoft Office, has begun shutting down key offices amid mounting losses. Its branches in St. Petersburg and Innopolis have been closed, with the St. Petersburg office responsible for developing desktop and mobile apps.
In 2025, the company’s net loss increased sevenfold to approximately $108 million. Employees have also been warned of large-scale layoffs, while Kaspersky Lab, which controls the company, has decided to cut funding for the project.
Looks like the “killer” picked the wrong victim.
Volodymyr Zelenskyy / Володимир Зеленський
@ZelenskyyUa
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42 m
I arrived in Serbia with my team. Important talks are scheduled for today and tomorrow – with President Aleksandar Vučić and Prime Minister Đuro Macut. We will discuss expanding economic ties between our countries, relations with the European Union, other areas that can benefit our nations, and security issues. Ukraine is always ready to work constructively, for mutual benefit, and on the basis of mutual respect.
