In the 70s, at least employment was a second mandate that the US Federal Reserve was given. When he hikes rates, that causes what we just talked about in the beginning of the show, whatever securities people were holding to become less valuable. He kept raising them because the inflation just was like, we haven't seen this in a long time. And if he does it again, raise rates, that is. I really start questioning this man's sanity and responsibility in this position. But we'll see. The Fed is still on track to very possibly raise rates again.
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The English word ‘bank’ meaning a depository and lending institution, derives from the Italian word ‘banca’, or ‘bench.’ This belies the origins of modern finance in Renaissance Italy, where deals initially struck at coffee house benches evolved into the great trading and banking houses of the Medicis, where double-entry book keeping enabled the matching of debtors with creditors that spurred the growth of industrial Europe over the coming centuries. Today, with daily capital flows measured in the trillions of dollars enabled by high-speed fiber optics and a global communications network, major decisions happen much more quickly, and because of the levered nature of fractional reserve finance, regional concern can magnify into global contagion faster than an actual pandemic. In the case of last weekend, where Silicon Valley Bank, one of the top-30 global banks went into receivership, the political institutions of the United States were caught off guard, and in an attempt to quell further concerns, went into overdrive this week as the Federal Reserve discount window was opened guaranteeing the assets of all major banks. Not to be outdone, the Swiss National Bank just intervened in the takeover of Credit Suisse, a century and half years old institution, to further halt panic in European markets. Memories of the 2008 financial crisis are on everyone’s mind, and the ripple effects of these events are surely to continue throughout the year.
