BANKING CRISIS = LIQUIDITY CRISIS = DEMAND FOR MONEY
Events this past week are indicative of what could be a more formidable problem for the Fed, investors, and the economy. Before we talk about that, lets first emphasize the key point made in my article SVB, MMT, TNT.
What happened at Silicon Valley Bank, Signature Bank, and now, Credit Suisse and First Republic banks, are not individual issues. All of them are the obvious signs of banking system fragility due to the practice of fractional-reserve banking. Therefore…
What has been termed a banking crisis is actually a liquidity crisis; and the loss of liquidity translates to a DEMAND for money.