This Odd Lots podcast episode is a co-hosted discussion exploring the history of eurodollars, specifically focusing on their development during the 1960s. The episode begins by setting the stage with the post-World War II Bretton Woods system and the resulting imbalance in global gold reserves, which threatened the dollar's stability. The discussion then shifts to the 1960 presidential election, where the dollar's stability became a key political issue. Finally, the podcast details how the Kennedy administration, facing pressure to maintain the dollar's peg to gold, strategically fostered the growth of the eurodollar market and implemented swap lines to manage the risk. A key takeaway is the creation of dollar swap lines between central banks, initially a controversial measure, as a crucial tool for maintaining the stability of the global monetary system. The episode concludes by highlighting the rapid growth of the eurodollar market by the end of the 1960s and foreshadowing the instability that would emerge in the 1970s.
