First Republic bank simply stopped working. And also more banks will likely stop working in the future as the Fed continues to pull money out of the US Economy.
The M2 Money Supply just got for the very first time in 90+ years given that the Great Depression. This decreasing money supply is what is ultimately causing banks failing. And what’s frightening is that every various other time the cash supply has actually gotten in the US going back to 1850, there was a connected financial crisis and also DEPRESSION.
When the money supply goes up, GDP goes up (commonly due to rising cost of living). And also when the money supply goes down, so does GDP (in this instance due to deflation).
Now – some individuals believe that JP Morgan’s acquisition of First Republic Bank will certainly settle the banking dilemma. JP Morgan’s CEO Jamie Dimon claimed as much. Nonetheless, that is not likely because the core issues with the financial system are still in tact. As long as Jerome Powell as well as the Federal Reserve keep getting the cash supply via quantitative tightening, while banks quit offering via the debt crunch.
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