"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."
Jay Powell should give me a call. We need dynamic, market-driven Keynesian economic interventions of the following form: Banks borrow from the Fed at a lower rate and longer pay-back terms if they then lend to the consumers at a lower rate and better terms. Banks can decide their appetite for loans, and bank customers can shop. #FreeTheRate
Banks need to be lending and not borrowing, and the Fed needs to not be lending at all.
Federal Reserve screwups have been front and center in every economic crisis in the US since 1913. Far from promoting economic stability it has institutionalized economic instability.
Keynes was wrong in the 1930s.
Burns was wrong in the 1970s. Volcker was wrong in the 1980s. Greenspan was wrong in the 1990s. Bernanke was wrong in the 2000s. Yellen was wrong in the 2010s. Powell has been wrong in the 2020s.
Best thing we could do for the banking industry is to shut the Federal Reserve down. It was never Constitutional in the first place.
One personal result of the past few years is that I’ve become a lot better at spying propaganda in the media, and boy, it’s been nothing but propaganda this past week about the banking crisis. Every adjective, every adverb, every innuendo has been ‘nothing to see here, no big deal, crisis averted’. The newspaper buries the articles on inner pages, and refers to the banking crisis in the past tense, as if there’s no possibility of more turmoil. The same media that practically screams about racial inequity and trans oppression talks soothingly about Credit Suisse going under, with less concern than if a local grocery store was closing.
Thank heavens for Substacks like yours, Mr Kust.
By the way, have you read Bad Cattitude’s Substack today?
How much of an actual crisis we have in banking is somewhat problematic.
The mismatch between deposits and assets is real, but what catalyzes that into a liquidity crisis is a bank run. In theory, if there is no bank run banks have the time to resolve their balance sheets.
Of course, in theory, bankers are conscientious banking professionals who always show good stewardship over other people's money. Suffice it to say, the theory needs work!
"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."
Which will it be, Mr. Powell?
Jay Powell should give me a call. We need dynamic, market-driven Keynesian economic interventions of the following form: Banks borrow from the Fed at a lower rate and longer pay-back terms if they then lend to the consumers at a lower rate and better terms. Banks can decide their appetite for loans, and bank customers can shop. #FreeTheRate
Banks need to be lending and not borrowing, and the Fed needs to not be lending at all.
Federal Reserve screwups have been front and center in every economic crisis in the US since 1913. Far from promoting economic stability it has institutionalized economic instability.
Keynes was wrong in the 1930s.
Burns was wrong in the 1970s. Volcker was wrong in the 1980s. Greenspan was wrong in the 1990s. Bernanke was wrong in the 2000s. Yellen was wrong in the 2010s. Powell has been wrong in the 2020s.
Best thing we could do for the banking industry is to shut the Federal Reserve down. It was never Constitutional in the first place.
One personal result of the past few years is that I’ve become a lot better at spying propaganda in the media, and boy, it’s been nothing but propaganda this past week about the banking crisis. Every adjective, every adverb, every innuendo has been ‘nothing to see here, no big deal, crisis averted’. The newspaper buries the articles on inner pages, and refers to the banking crisis in the past tense, as if there’s no possibility of more turmoil. The same media that practically screams about racial inequity and trans oppression talks soothingly about Credit Suisse going under, with less concern than if a local grocery store was closing.
Thank heavens for Substacks like yours, Mr Kust.
By the way, have you read Bad Cattitude’s Substack today?
I haven't read it yet. But I'm sure I will.
How much of an actual crisis we have in banking is somewhat problematic.
The mismatch between deposits and assets is real, but what catalyzes that into a liquidity crisis is a bank run. In theory, if there is no bank run banks have the time to resolve their balance sheets.
Of course, in theory, bankers are conscientious banking professionals who always show good stewardship over other people's money. Suffice it to say, the theory needs work!