Let’s review the Federal Reserve Bank’s many roles, & how each of them enabled the SVB failure/malfeasance:
(1) Santa Claus.
By keeping interest rates artificially low, FED stimulated the economy, & nudged those with capital into the VC space creating demand for a bank like SVB.— Thomas Massie (@RepThomasMassie) March 12, 2023
(3) Firefighter.
After setting the blaze, FED came to the rescue to fight inflation by rapidly increasing interest rates. As a result, net VC startup deposits into SVB slowed, while assets held by SVB (long-term low-interest government debt) became less valuable.— Thomas Massie (@RepThomasMassie) March 12, 2023
We, the American people, would be better off if the Federal Reserve Bank, an instrument of the very wealthy and connected, did not exist to socialize the risks of insiders while distorting our economy, destroying jobs, and devaluing our currency.
— Thomas Massie (@RepThomasMassie) March 12, 2023