Source: Reason
by Joakim Book
“The Federal Reserve is in the unenviable position of achieving its mandate by crashing the economy. It’s not something it wants to do, as Fed Chair Jerome Powell meekly admitted in his exchange with Sen. Elizabeth Warren (D-Mass.) last week. But it’s something that happens as an unavoidable outcome of slowing down an economy littered with excess money and inflation. Broad money growth has been negative since late November, and interest rate expenses on everything from corporate borrowing to credit cards to the government’s own debt have been rising fast. This hiking cycle, the fastest that the Fed has embarked upon in a generation, was always likely to break something. And break something they did over the weekend, from the regulated stablecoins USDC and Gemini Dollar, which lost their dollar pegs, to Silicon Valley Bank (SVB), which faced the second-largest bank run in U.S. history.” (03/13/23)
https://reason.com/2023/03/13/how-the-fed-broke-silicon-valley-bank/