My dear
@tecate I see you are really excited at the prospect of the second coming (of the GFC). I shouldn't really spoil your fun but what is happening now is light years different from the GFC and completely less of a threat to the established order, in fact no threat - sorry to disappoint you.
Apologies again for making you put the champagne back on ice - maybe next time.
This is a fiction. I'm not "excited" or putting champagne on ice or any such other nonsense. The same way as I'm not in a "cult" and I don't think that fractional reserve banking is "the devil". And I understand - I can keep pointing out these things to you and you'll choose to ignore them because you want to construct a certain counter-party to this discussion - that has never appeared here. But you do you Duke.
Both situations are driven by issues with the asset side of the bank balance sheet. Under the GFC it was sub-prime mortgages and silly lending to developers. These were genuine asset failures, and the amazing thing is the system survived, no more amazing than in Ireland where the bank asset failures were astronomical.
This time round we are talking about government bonds - not sub-prime mortgages.
Yes, mark to market reduces the "value" of Government bonds when interest rates rise but what is being missed here is that the market value of the liabilities i.e. deposits is kept at their face value because they are callable at notice. But the interest paid on deposits is very small and a mark to model at today's high interest rates and allowing for average duration of deposits would seriously reduce their value, more than compensating for the loss of (market) value on the assets.
I mean you raise a consideration I simply haven't given a moments thought to. You seem to think that what's going on right now is only an issue if its as big a crapfest as the GFC? I mean, firstly I think we should wait for the whole thing to play out before you reach for the measuring tape.
Beyond that, as it stands today, its big enough of an issue to underscore the deficiencies in the conventional system that over a number of years, you refuse to acknowledge. And as this has unfolded (with this post and your previous posts) not only will you not acknowledge those blemishes but you'll go into these multi-post defenses of how nobody should dare point out that fractional reserves are at the heart of what's going down right now.
Secondly, it has almost fully undone the entire 9 months worth of fiscal tightening that took place, in the space of a couple of weeks. That's significant from a Bitcoin perspective. We've had someone else here claim many months ago that the good times were over and it would be sober monetary policy from here on in. The system is broken and they can't stop printing.
Thirdly, this recent episode of discussion was sparked off by people claiming that crypto was to blame for this nonsense....and we had those in high office distributing those lies - until even for the uninformed they weren't believable any more.
There is of course a liquidity issue and a possibility of a bank run by the uninsured big girls.
The liquidity problem is never an issue for very long in the fiat world - they just turn the taps back on. So we're in agreement - there's no big problem here (while we keep kicking that can down the road).
Here's Agustin giving an indication of how much liquidity is available - that should be enough, right?
But this is precisely the sort of situation that Central Banks can handle no problem.
I have full faith in your comment and in their ability to go and shake some more green off the magic money tree. :-D
No chance of those big girls following Saylor into bitcoin.
For something that isn't going anywhere, it seems to be living rent free in a lot of headz at the highest of levels these days..lol
I used to post the odd update on developments in the space back in the 2019 bear market but those developments just became so numerous I didn't see the point anymore. But I'll make an exception - related to your Saylor point today.
This morning Nasdaq
told us it was going to become a crypto custodian and would have that up in running by Q2, 2023. An awfully strange move given that we're told that crypto is done and dusted. Also today, the Financial Accounting Standards Board (FASB) in the US
came out with a report where they're proposing amendments to their current standards on crypto-related accounting, taking a much called-for fair value approach to valuing and accounting for crypto going forward. This is something Saylor and others have flagged as requiring an update so that Corporate Treasuries can more easily work with digital assets. Onwards and upwards Duke.