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Lockdowns and shutdowns led to the current banking crisis
A bulleted summary
Great piece above, and my own bulleted summary below…
(1) Government handouts of money and low interest loans meant people were no longer seeking bank loans.
(2) Banks were suddenly awash in deposits, and so loaned to the government itself.
(3) But loans to the government were super low interest because there were so many banks competing to lend.
(4) So, banks have tremendous moneys invested in super low interest loans, and any inflation will undermine that investment.
(5) And of course there was inflation. Not only was money madly printed and doled out, but lockdowns/shutdowns strangled the economy, ensuring there was simply less stuff to buy. Way more money and less stuff means big inflation.
(6) And all those low-interest bank loans to the Feds become massive losses.