Did the Banks Just Break?
Real Vision: Finance & Investing
00:00
Is the Fed's Own Doing?
The Fed knows that what has happened to Silicon Valley Bank is their own doing. The problem was implementing negative real rates and quantitative easing in the year 2020 and 2021, which led to such massive overvaluation of sovereign bonds. In 2022, when great height started, bonds were not a cushion or a haven, but actually as risky as volatile and as price destruction as the equity market. So, that's why Silicon Valley Bank found itself in a situation in which by following exactly what the Fed was saying, they found themselves in a capital trap.
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