Posted on 03/24/2023 4:51:44 AM PDT by Enterprise
When there is fear in the air, banks start getting really tight with their money, and right now there is lots of fear in the air. A major credit contraction would be a nightmare scenario for the economy, and as you will see below, there is evidence that this is already starting to happen. Hopefully our leaders can find a way to calm things down, because we all remember what happened during the last financial crisis.
Banks decided to substantially tighten their lending standards and that really deepened the economic downturn. So our leaders should be doing what they can to support the stability of the system, but in so many cases they end up doing just the opposite.
For example, on Wednesday U.S. Treasury Secretary Janet Yellen publicly admitted that blanket coverage of all uninsured deposits in U.S. banks is not even under consideration…
In response to a direct question about whether the Treasury would circumvent Congress to insure all deposits, Yellen replied, “I have not considered or discussed anything having to do with blanket insurance or guarantees of all deposits.”
When she made this statement, she poured even more lighter fluid on small and mid-size banks all over the country.
Translation - I'm a typical Biden Administration ignoramus and I'm here to help.
If credit tightens too much, the feds will just start pumping made up money directly to the public as “stimulus”. We’re stuck with inflation, no matter what these bank fear mongers promote.
Would agree. But there’s a ton of difference between 8-percent inflation and 16-percent inflation. And if you were a Biden-guy...you can’t admit recession in any conversation.
Gee. It’s almost like free people are acting in their best interest in a free market. The dems need to stop this right now - “Nip it in the bud, Andy.”
The difference in the inflation is the amount of debt we have to service. The system today, with 30+ trillion in debt, would collapse in a heartbeat at 16%.
volcker pushed the prime to 21% to squelch 13% inflation
What is happening is the higher T rates are vacuuming money out of the system into the FED. There is less money available to borrow so the rates go up exponentially and the more risky businesses get no credit, period.
Another side effect, with the loan departments closed to them startups and risky operations have to turn to the secondary market or the junk bond market to raise capital. The effect, wide spread dilution of equity and falling stock prices with the former, potential bankruptcy with the latter as they cannot pay the high interest costs also resulting in lower stock prices.
2008 Part Deux
And gold hit $2000/oz yesterday, en route to telling the truth about phony-baloney currencies. Central banks have been routinely bludgeoning gold prices in order to keep precious metals’ prices from a runaway breakout.
There’s an end to that practice. The day is coming when margin calls can no longer be met with a printing press.
And it worked quickly. Inflation disappeared and ushered in economic boom years. The media stopped using the term Reaganomics.
It’s pretty clear the Fed, not the Legislature are going to do anything meaningful...
Dumpster fire to dumpster fire is going to be the US Economy for the foreseeable future, until it all comes crashing down
Apparently the "Great Reset" as promulgated by Obama and now Biden is well under way. Rough road ahead...
I asked my wife a rhetorical question: “If you had billions in a bank right now, what would YOU do?” She got it right away. The powers that be are delaying allowing more to fail (due to mismanagement) so most of their big donors can reallocate their funds/assets. Probably a lot of short sellibg being establised. Little people are goibg to be bagholders. All so sad and unnecessary and certainly most punishable if only we didn’t have totally corrupt leaders.
If they were stupid, they would get some percentage of things right. Or at least more right.
I think we’re being set up.
We let thugs into our house and allowed them to steal it. They are now in the process of looting the place and I suspect the plan is to get rid of us when we try to stop them.
Control could probably be wrested back at this point.
But they know that if they keep us sitting on the couch watching Kimmy K’s fat butt, eventually it’ll be too late.
Yep. All intentional and by design. Dems/Libs win almost all the time. With a few exceptions, They advance their agenda and just roll over Repubs/Conservatives. One thing Trump spoke about is showing the right how to win. Sadly didn’t happen. Repubs are there to be the Uniparty. Obama was able to weaponize the Federal government.
I agree with all my heart. However, I have the greatest trinket gatherer, inflationary force, and debt slave acolyte known to man - a wife.
It has been my belief for years that the Democrat Party has successfully looted trillions of dollars, and no organization of thugs and thieves will ever come close to their accomplishment.
Do you think we go higher before lower on gold? Looking to exit a gold stock as soon as possible.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.