There are MMTs, who see that we're not really in a crisis because interest rates are going up. Most of the instability is occurring in the non-bank financial institutions. Even though they're going up in the US, there's still jobs, lots of jobs. People are spending. Teachers are going up, housing construction is on the up. Where's the crisis? Well, it's actually in America, it's still got a large fiscal stimulus.
We last had a financial crisis in 2008 (ignoring the pandemic years), and if we’re not in another crisis now, we’re well on the way to it, with mortgages rising, taxes increasing and the price of everything continuing to rise. Your spending power is being hit in three directions. But, isn’t that what central banks want? So we spend less and inflation comes down, theoretically. Yet the banks, who might not be to blame this time, are now feeling the hurt. In fact, they stand to gain from rising interest rates because they can raise their borrowing costs. This week Phil asks Steve, will the banks always win, come what may?
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