The 2023 Financial Crisis Has Begun!
As we start to sort through the fallout of the failure of Silicon Valley Bank and Signature Bank and the government’s reaction to it, the next question is: what’s next?
Government officials and mainstream pundits insist everything is fine now. They say quick government action averted a crisis. But in his podcast, Peter Schiff said this is really just the beginning of the next financial crisis.
This is no longer the 2008 financial crisis. This is the 2023 crisis. It’s been a long time — fifteen years since we had a financial crisis. I’m surprised it’s taken this long for this crisis to begin. But I’m not surprised we are having a crisis.”
Over the weekend, the Federal Reserve and the US Treasury took quick steps to address the failure of the two big banks. Peter called it “the plunge protection team.”
In order to prevent bank runs and shore up the system, they created a mechanism to ensure nobody loses their deposits – even those that weren’t insured by the FDIC. They also set up a loan program that effectively bails out any other banks that might be on shaky ground.
While these actions only kick the can down the road, Peter said the situation would have been much worse had the government not announced this bailout. We would have almost certainly had more bank failures.
Of course, government officials, including President Biden insist this isn’t a bailout.
Nobody wants to admit it’s a bailout because, obviously, the bailouts were not popular, and so they want to distance themselves from that language. But this absolutely is a bailout.”
Government officials can plausibly claim they are not bailing out the failed banks because they are letting the institutions go under. But the bank’s customers are getting bailed out.
They would have lost money. But now they’re not going to lose money. Why?
Article from LewRockwell
