{"id":65160,"date":"2023-03-13T10:55:42","date_gmt":"2023-03-13T15:55:42","guid":{"rendered":"https:\/\/olduvai.ca\/?p=65160"},"modified":"2023-03-13T10:55:42","modified_gmt":"2023-03-13T15:55:42","slug":"silicon-valley-bank-crisis-the-liquidity-crunch-we-predicted-has-now-begun","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=65160","title":{"rendered":"Silicon Valley Bank Crisis: The Liquidity Crunch We Predicted Has Now Begun"},"content":{"rendered":"
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Silicon Valley Bank Crisis: The Liquidity Crunch We Predicted Has Now Begun<\/a><\/h3>\n<\/header>\n
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There has been an avalanche of information and numerous theories circulating the past few days about the fate of a bank in California know as SVB (Silicon Valley Bank). SVB was the 16th<\/sup>\u00a0largest bank in the US until it abruptly failed and went into insolvency on March 10th<\/sup>. The impetus for the collapse of the bank is tied to a $2 billion liquidity loss on bond sales which caused the institution\u2019s stock value to plummet over 60%, triggering a bank run by customers fearful of losing some or most of their deposits.<\/p>\n

There are many fine articles out there covering the details of the SVB situation, but what I want to talk about more is the root of it all. The bank\u2019s shortfalls are not really the cause of the crisis, they are a symptom of a wider liquidity drought that I predicted here at Alt-Market months ago, including the timing of the event.<\/p>\n

First, though, let\u2019s discuss the core issue, which is fiscal tightening and the Federal Reserve. In my article\u00a0\u2018The Fed\u2019s Catch-22 Taper Is A Weapon, Not A Policy Error\u2019<\/a>, published in December of 2021, I noted that the Fed was on a clear path towards tightening into economic weakness, very similar to what they did in the early 1980s during the stagflation era and also somewhat similar to what they did at the onset of the Great Depression. Former Fed Chairman Ben Bernanke even\u00a0openly admitted<\/a>\u00a0that the Fed caused the depression to spiral out of control due to their tightening policies.<\/p>\n

In that same article I discussed the \u201cyield curve\u201d being a red flag for an incoming crisis:<\/p>\n

\u2026click on the above link to read the rest\u2026<\/p>\n

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Silicon Valley Bank Crisis: The Liquidity Crunch We Predicted Has Now Begun There has been an avalanche of information and numerous theories circulating the past few days about the fate of a bank in California know as SVB (Silicon Valley Bank). SVB was the 16th\u00a0largest bank in the US until it abruptly failed and went […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[6703,2809,21825,54,61,63,5993,124,303,33766,3650],"class_list":["post-65160","post","type-post","status-publish","format-standard","hentry","category-economics","tag-alt-market","tag-bailouts","tag-bank-defaults","tag-bank-failures","tag-banking","tag-banks","tag-brandon-smith","tag-central-banks","tag-fed","tag-silicon-valley-bank","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/65160","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=65160"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/65160\/revisions"}],"predecessor-version":[{"id":65161,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/65160\/revisions\/65161"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=65160"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=65160"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=65160"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}