Banking Collapse Caused by Federal Reserve. We Need a National Bank Now!
A note to readers: this is an old post on the archive website for Promethean PAC. It was written when we were known as LaRouche PAC, before changing our name to Promethean PAC in April 2024. You can find the latest daily news and updates on www.PrometheanAction.com. Additionally, Promethean PAC has a new website at www.PrometheanPAC.com.
The sudden collapse of Silicon Valley Bank underscores the immediate need to get rid of the Federal Reserve and replace it with a Hamiltonian National Bank. After the 2008 financial crisis, itself caused by decades of funny money policies by the Federal Reserve, the Fed drove interest rates to zero and below and pumped the system full of free money. This accelerated during the pandemic.
Under these conditions, the Fed's free-money policy encouraged wild speculation that allowed banks like SVB to vacuum in huge amounts of short-term deposits which they invested, at the Fed's urging, into low yielding long-term bonds. Now that the Fed is raising interest rates the value of those bonds are dropping and consequently the banks like SVB are caught in a liquidity squeeze.
Most of the deposits in SVB are not insured. Hedge and venture fund vultures are already screaming for the the Fed or the U.S. Government to bailout the uninsured deposits.
LaRouchePAC says loudly and clearly: NO MORE BAILOUTS. Put the system through bankruptcy re-organization. Get rid of the Fed and re-establish a National Bank to provide credit for large scale manufacturing and frontier projects like the Freedom Cities and manufacturing powerhouse proposed by President Trump.