On todays episode of Forward Guidance, Professor Emeritus of Economics at Leonard N. Stern School of Business, author and financial historian Dr. Richard Sylla joins the show for a discussion on one of his most widely studied areas... interest rates. After authoring "A History of Interest Rates", a book which examined over four millennia of interest rates trhoughout periods of inflation, financial crises' and recessions, there's no one better equipped to discuss the Fed's current tightening cycle and how it impacted banks such as SVB in the Fed's current quest to fight inflation.
Just how severe is this current tightening cycle when compared to other times in history? According to Dr. Sylla, this is nothing new as "history doesn't repeat, but it often rhymes". To hear all this and more, you'll have to tune in!
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Referenced In The Show:
A History of Interest Rates: https://www.amazon.co.uk/History-Interest-Rates-Wiley-Finance/dp/0471732834
Alexander Hamilton on Finance, Credit, and Debt: https://www.amazon.com/Alexander-Hamilton-Finance-Credit-Debt/dp/0231184565
Alexander Hamilton, Central Banker: Crisis Management During the U.S Financial Panic of 1792: https://w4.stern.nyu.edu/research/alexander_hamilton_central_banker.pdf
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Timestamps:
(00:00) Introduction
(00:39) A Return To Normalcy For Interest Rates
(05:10) How Interest Rate Rises Led To SVB's Collapse
(09:24) The First Bank of The United States
(13:36) Paul Volcker's Historic Interest Rate Rises
(20:35) Why We Have Inflation Now... But Not Post 2008
(28:03) Permissionless
(29:06) The Fed's Between A Rock & A Hard Place
(32:03) The Savings & Loan Crisis
(37:41) All Signs Point Towards A Recession
(44:59) Blockworks Research
(45:59) What An Inverted Yield Curve Really Indicates
(48:49) A Banking Panic Solution, Through The Eyes of Alexander Hamilton
(57:03) How ZIRP Caused Problems In The Financial System
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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.
