Rap video from a few years ago showing the failed arguments for Keynesian economics and the consequences of messing around with the money supply and artificially forcing interest rates low.
Pushing down interest rates leads to mal-investment in projects that are not really good plans. When interest rates eventually rise, lots of plans need to be abandoned.
The results? “Bailouts, payouts, and machinations.”
The ‘cheap credit dog’ will come back to bite hard.
When the economy is flooded with trillions of dollars during COVID, the fully expected inflation forces the Fed to raise interest rates, in turn dropping vaue of bonds and then in turn tanking the value of the securities portfolio of every bank in the country. No wonder the FDIC and FRB think Silicon Valley is just the first bank to go.
We saw it in 2008. We are seeing it again today.