{"id":268488,"date":"2023-05-05T06:10:20","date_gmt":"2023-05-05T06:10:20","guid":{"rendered":"https:\/\/www.thetruthseeker.co.uk\/?p=268488"},"modified":"2023-05-06T06:04:16","modified_gmt":"2023-05-06T06:04:16","slug":"more-troubled-banks","status":"publish","type":"post","link":"https:\/\/www.thetruthseeker.co.uk\/?p=268488","title":{"rendered":"More Troubled Banks"},"content":{"rendered":"<h1 style=\"text-align: center;\"><strong>Paul Craig Roberts \u2013 paulcraigroberts.org May 4, 2023<\/strong><\/h1>\n<p>As I reported at the time, the banking crisis is not limited to Silicon Valley Bank.<span class=\"apple-converted-space\">\u00a0 <\/span>Silicon Valley Bank\u2019s failure was followed by the failures of New York Signature Bank and First Republic Bank of San Francisco.<span class=\"apple-converted-space\">\u00a0 <\/span>Now three more banks have had their stock prices collapse\u2013Western Alliance, PacWest Bankcorp, and Metropolitan Bank.<\/p>\n<p>As I have emphasized, the Federal Reserve\u2019s higher interest rates are the cause of the bank troubles.<span class=\"apple-converted-space\">\u00a0 <\/span>The decade of zero interest rates left banks with portfolios of low interest rate assets on their balance sheets.<span class=\"apple-converted-space\">\u00a0 <\/span>As the Federal Reserve raised rates, these assets declined in value.<span class=\"apple-converted-space\">\u00a0 <\/span>Depositors saw that the banks were technically insolvent<span class=\"apple-converted-space\">\u00a0 <\/span>and withdrew funds.<span class=\"apple-converted-space\">\u00a0 <\/span>Others withdrew funds because they can now get higher interest rates from money market funds. <span class=\"apple-converted-space\">\u00a0<\/span><\/p>\n<p>Banks losing deposits are subject to runs.<span class=\"apple-converted-space\">\u00a0 <\/span>Expecting the worse, shareholders sell their holdings of the banks\u2019 stocks.<span class=\"apple-converted-space\">\u00a0 <\/span>As the banks lose market value, troubles increase.<\/p>\n<p>The Federal Reserve is causing a banking crisis, because the Federal Reserve imagines that the inflation is a monetary inflation and not an inflation resulting from supply disruptions caused by Covid lockdowns and Russian sanctions.<span class=\"apple-converted-space\">\u00a0 <\/span>If the Federal Reserve succeeds in throttling the economy with higher interest rates, supply problems are aggravated by reductions in production.<span class=\"apple-converted-space\">\u00a0 <\/span>In other words, as usual, the Federal Reserve\u2019s policy is counterproductive.<\/p>\n<p>I have always been amazed that Americans look to government entities for solutions when incompetence is the main attribute of government.<\/p>\n<blockquote class=\"wp-embedded-content\" data-secret=\"kYUkfN3kiW\"><p><a href=\"https:\/\/www.paulcraigroberts.org\/pages\/donate\/\">Donate<\/a><\/p><\/blockquote>\n<p><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;Donate&#8221; &#8212; PaulCraigRoberts.org\" src=\"https:\/\/www.paulcraigroberts.org\/pages\/donate\/embed\/#?secret=jh9uF1AJNe#?secret=kYUkfN3kiW\" data-secret=\"kYUkfN3kiW\" width=\"600\" height=\"338\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe><\/p>\n<p>&nbsp;<\/p>\n<p><a href=\"https:\/\/www.paulcraigroberts.org\/2023\/05\/04\/more-troubled-banks\/\">Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Paul Craig Roberts reports that three more major U.S. banks have had their stock prices collapse<\/p>\n","protected":false},"author":131,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[61,66],"tags":[],"class_list":["post-268488","post","type-post","status-publish","format-standard","hentry","category-Commentary","category-Economics"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/268488","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/users\/131"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=268488"}],"version-history":[{"count":3,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/268488\/revisions"}],"predecessor-version":[{"id":268491,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/268488\/revisions\/268491"}],"wp:attachment":[{"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=268488"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=268488"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=268488"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}