Every bank is insolvent today and people are just starting to realize this. They all were loaded with tons of liquidity that they couldn’t loan (due to demand) so they had to do something and they all bought “safe” assets in the form of treasuries, etc. The Fed continued to guide on low interest until they suddenly decided to raise rates non-stop.
All those deposit accounts paid 0% interest. Not there’s 4%+ interest available and everyone is pulling their money to put into those, or other things. The banks can’t actually do this much longer.
If you mark to market the bonds these banks are carrying you can see they are insolvent. As more people realize and pull out this and/or move money to higher interest accounts, they are doomed.
How is this fixed? Hope everyone chills? No it will only get worse. I sure it all? That will cause trillions in inflation overnight. Let all the banks collapse? That will spell anarchy and depositors will lose a lot. Quickly lower interest rates? Inflation continues and accelerates.
All those deposit accounts paid 0% interest. Not there’s 4%+ interest available and everyone is pulling their money to put into those, or other things. The banks can’t actually do this much longer.
If you mark to market the bonds these banks are carrying you can see they are insolvent. As more people realize and pull out this and/or move money to higher interest accounts, they are doomed.
How is this fixed? Hope everyone chills? No it will only get worse. I sure it all? That will cause trillions in inflation overnight. Let all the banks collapse? That will spell anarchy and depositors will lose a lot. Quickly lower interest rates? Inflation continues and accelerates.
We are in grave danger right now.