Topic: Biden on Brink of 2nd US Bank Bailout (Read 187 times)

Yes it makes loans more expensive but it also puts stocks under pressure as people who follow a conservative investment strategy might now tend to buy bonds instead of stocks. I was a bit surprised that Bitcoin went for such a massive jump from just under 20k a c couple of days ago. Very good sign indeed when it times of turmoil Bitcoin achieves a turnaround momentum in price.

It seems that more people might now understand that the higher interest rates on bonds aren't that great for as long as inflation is eating away any yield they are making with their bonds. The sudden jump in price also seems to have been a strategic short squeeze as well. Guaranteed some pessimistic guys in hopes of Bitcoin falling even lower now got crushed brutally.

It's great news that the bitcoin market is going up again. Any negative news in the financial sector that leads to higher crypto demand is good in my opinion. The question is now if this is only a short term effect or a more long term trends. It was just a matter of time for the high inflation to lead to higher interest rates, which in return makes loans more expensive. Both of the insolvent banks were focusing on the high yield market where is a lot of more risk involved. They were trying to get higher returns by giving money to start ups. Its good that Biden is not going to bail out the banks. Nobody is going to bail us out of we make the wrong decisions.

I was hoping they wouldn't go in that direction again, but it seems Bitcoin is to blame for everything bad that happened from 2009 to now. Geniuses from the IMF have already spoken.

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This is true, which is only proof that the people at the top change, but the policy remains largely the same. They all seem to think that they can create debt forever, because someone else is going to pay for it anyway. $10 trillion less or more is irrelevant to them, because how many people in the US or anywhere in the world can even explain that number, let alone understand how much debt they actually have on their backs.

I don't get why people are overreacting this much. Banks were in trouble after offering this much, if Biden wants to save them so badly, just drop the interest rate a lot, and by that I mean like under 3% levels, which would be more than enough. That would cause a lot of people to withdraw their money and banks wouldn't normally want that, but right now there are excess amount of money in the banks that they  can't pay back with interest, so people withdrawing their money and not requesting that much in return is actually better.

By this logic if banks want more money, they can offer 100% interest, would everyone jump on it if it was legit? Sure, but how could a bank pay that back? They can't. That is happening right now in a minor scale.

Thats true. With motive, it's possible. Anyone with more than $250K on its account will be really pissed.
It's easy to install hate and even spark a war in a community that lost money against those who gained money. Same for a hungry country to another neighboring country that is wealthy. Printing more USD means inflation rising higher than what it is now. People will no longer be able to afford necessities.

that's a rational question

anyone who lost their money can and will behave as irrationally as they please, and anyone in media/politics/banking who feels like it will take advantage of the situation, and instigate a "pile on"

USD won't collapse because what happened with the banking system isn't an inherent flaw with USD, it's an inherent flaw with the federal reserve and government policy.

SVB had hundreds of billions in cash they needed to put into something that they thought would've been safe. U.S. treasuries is where they put their money and at the time it didn't seem like a bad idea when the market was so unpredictable back in 2021-2022. With Jerome Powell openly proclaiming inflation to being a large problem, one could reasonably foresee interest rates rising and those U.S. treasury bonds suddenly don't look like a safe/attractive investment anymore. SVB made the wrong bet.


The government will credit depositors up to 250k so in a way the banks are being bailed out. If the penalty for a bank mismanaging funds is having all your depositors credited then whatever investments that bank is making will all be covered in the event things go bad.

The shareholders and upper management are all out of their cash which have greater economic concerns but it's not as if the federal government is not stepping in to a significant degree. Presumably the unsecured creditors are all out of their cash but I have some doubts the federal government won't step in and make them whole again.

Keep in mind, the reason the financial institutions were issuing out sub prime mortgages was because they had this same guarantee back in 08. If the sub prime mortgages turned out to fail, the government would guarantee them financial remedy. This isn't the same situation but with this system you might as well just have the government manage investments instead of having the banks do it and insure depositors when things go sideways. I would never advocate either system but banks are just acting as the middle man here.

Interest rates can only affect the inflation rate so much before it becomes ineffective. Roughly below 4% is the sweet spot that can have a significant effect but from there the effects diminish until 5% is nearly completely ineffective.
The biggest problem is that people who didn't have any money and were struggling with increasing prices are now forced to pay even more money (interest) they don't have!

There is a long list of POTUS they need to call out starting from Clinton and Nixon or at the very least from Bush who single handedly gave a dumb order that is the reason why US wasted $10 trillion (a little less than a third of US current national debt) over the past 20 years.

Treasury Secretary Janet Yellen says U.S. government won't bail out Silicon Valley Bank


And Bitcoin at first reacted negatively, yesterday it fell to $20k, and today it just recovered to $24k, which is where it were before this drama started. Sure, maybe Bitcoin will be at $40k in a week, but until that happens, let's not make hasty statements.

These banks that were affected were tied to crypto industry, especially exchanges, and reduction in liquidity will probably be more negative rather than positive for the price, although it's still a relatively minor event if you zoom out.

They will probably keep doing this until they reap the benefits of instigating new wars I guess? They are still pretty involved with the Ukraine-Russia conflict and now they are getting more aggressive against China. Biggest arms dealers in the world will surely benefit if Taiwan-China conflict escalates and US is one of them.

I've already seen the crypto blame starting with these banks shutdowns. Just because these banks were involved in some crypto services I have definitely seen some articles about the banks shutting down as having to do with crypto. I dunno about Silverbank, that one was more involved with crypto, but SVB and NY Signature Bank failing had nothing at all to do with crypto but some people are trying to claim it was crypto that caused them to go under. I guess people feel its easy just to blame crypto if something that failed had any connection to it.

I don't think this is going to spread into a domino effect of lots of things failing. I think it was just coincidence 3 banks failed within a few days of each other. Since the Fed stepped up and is insuring everyone is getting their money back I don't think this will cause a domino effect. If they Fed hadn't done anything then this could have spread yes.

Still it is a sign that despite great job numbers and high wages there are some underlying issues in the economy besides just inflation as the US tries to get back to normal after all that money printing during the pandemic. Hopefully we see the Fed be a bit more concerned about something bad happening in the economy and they think twice about raising interest rates too quickly and too high from here on out.

When you say "us", I assume you mean the Bitcoin community (although I've never been a supporter of such expressions) - but why would the average loser who still trusts the system blame Bitcoin, which to be honest is almost insignificant compared to the power that banks have, especially in terms of how many trillions of $ they have at their disposal.

Yes, I agree that we/Bitcoin are very soft/easy targets, but I don't see what would serve as the main mantra this time, except for already worn-out stories about how mining consumes huge amounts of energy, or how Bitcoin finances international terrorism.

If the Americans want to blame someone, then they should consider calling out former President Trump, who allegedly canceled the provision that banks with up to $xxx million must undergo regular inspections or something similar (I'm not entirely sure what this measure is called). The political decision is to blame for what is happening today, and that is the only truth.

It looks as if the Chinese have bought the UK arm of the Silicon Valley Bank. I thought the US was anti China and trying to sanction the country publicly. In the meantime it seems they are selling them US assets, and transferring manufacturing and research to Chines owner companies. How long will it be until the Renminbi becomes the official currency of the US?

be careful what you wish for

of all the people (which is the overwhelming majority) that still trust banks and the financial industry that could lose out from USD/banking collapse...

...some of them would blame us


it's the "cornered animal" syndrome; you've lost everything, so you've got nothing to lose by randomly lashing out at (perceived) soft targets

Not all banks will be collapsed tomorrow or in any black swan event but any bank despite of big or small can be failed or collapsed, bankrupted tomorrow. No guarantee for their survivals and governments can not save all banks. They have to learn lessons from their bad managements, regulations and bank collapses to help other banks but if you have money in a collapsed bank, it is too late and does not mean anything personally after you lose all your money or fortune there.

Bitcoin will exist as it is not backed by any centralized bank. The community own it and when the network is lively running, there is demand and supply is limited, it will have its good value.

Centralized banks can print more fiat currencies but nobody can create more Bitcoins than 21M in the protocol.

It's a debatable question whether a state should bail out failing banks and industries (it's literally among the topics I've seen suggested for public debates). It is, of course, unpleasant when banks to something wrong and then the taxpayers unwillingly save the banks, so that banks can then enjoy more profits till they do something wrong again. And I do agree that Bitcoin is a nice alternative here, as people are always free to use their BTC and having it isn't built on any authority being allowed to experiment with your money and invest it into something. Thank being said, will the US really bail out the newly collapsed banks? I thought it would just take over the assets to ensure they can be liquidated on the market and customers can get their compensations. In fact, when I just googled Biden bailing out the banks, various (see here, here) recent news said that it's unlikely to happen and that Biden's administration isn't planning to do that. So maybe it's not that bad right now, and the overprinting issue isn't relevant in this specific case.

Why don't you ask your friend who hangs out with the royal family, Putler and the golden dragons? It's completely pathetic that we have centralized Bitcoin to the point where some of you act as if it depends on one man or a bank. All the banks in the US can fail tomorrow, Bitcoin will still exist.

If you're suggesting that the Federal Reserve will pivot to expansion of their balance sheet, reverse to QE, and turning on the printers, then I believe not. Inflation is still high in the U.S. A pivot now would bring it up further, then what will do? Tighten more and raise interest rates higher, and more aggressively to bring inflation down.


It might take longer than expected, and the replacement might be a CBDC. A reset of the U.S. Dollar.

It is indeed interesting to see that as soon as a crypto exchange collapses, they are all screaming for more and stricter regulation. That's ok of course if things are going the wrong direction. But banks can collapse as they please and I wonder what the consequences are there? More regulation? Stricter? Doesn't seem like it.

Though you said the US recently defaulted on their debt. I tried to find something about that but the only info I can find states that if the debt ceiling isn't raised by congress, then the US is likely to fail soon. Is there any info I missed?