Cheap Money, Bank Runs & The Interest Rate Hyper Bubble

The Fed and Treasury have colluded to guarantee deposits for all of Silicon Valley Bank's deposits. How are they going to do that? ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ March 22, 2023  |  [View Online]( |  [Sign Up]( [New Session!]( This week on The Wiggin Sessions: [Cheap Money, Bank Runs & The Interest Rate Hyper Bubble with Dan Ferris]( the man who coined the therm The Daily Reckoning. The Fed can’t afford to lose control of the narrative that their “going to do whatever it takes” to fight inflation. Thus, they stuck to the quarter point rate hike 80% of the market expected. The Dow rallied 200 points, back into positive territory, in anticipation of the announcement. “25 bips” Dan Ferris called it in this week’s Session… the Fed will fight inflation with one hand behind its back now that we’ve had bank runs at Silvergate, SVB, Signature and First Republic. The sneaky part is what the other hand is doing. The Fed and Treasury have colluded to guarantee deposits for all of Silicon Valley Bank's deposits. How are they going to do that? The FDIC, by law, insures up to $250,000 for ordinary depositors. Trouble is, the FDIC only has 1.7% of the money it needs to cover accounts if the contagion spreads. And now the Fed has now promised to bail out the extraordinary depositors, too. So where’s all that money going to come from? They’ll have to print it. That’s what the other hand is for. They’ve rebooted their “quantitative easing” (QE) program in secret. Last year, the Fed flew both fists to fight inflation, taking jabs with rate hikes. They were telegraphing an uppercut by unloading assets on their balance sheet, or “quantitative tightening” (QT) which would provide another way of beating the credit market down… plus slowing demand. Two hands fighting the good fight. But once Silvergate started going under, the Fed changed course and whiffed on QT. In what Dan Denning at Bonner Private Research calls a “stealth pivot,” the Fed started bulking up their balance sheet again. Mr. Denning: “Quantitative Tightening reduced the Fed's balance sheet by $625 billion when it started on April 13th of last year. Since March 1st, it's up to $299 billion. So 47% of QT was wiped out when the first hint of crisis came.” Mr. Powell and Co at the FOMC are keeping up appearances in the fight against inflation with the .25 rate hike. But behind the scenes, they’re injecting new money into the market to fight [a bank contagion]( Fun times. You can watch the full Session with Dan Ferris by clicking [here.]( Follow your own bliss, Addison Wiggin  The Wiggin Sessions P.S. The Fed is like a bully on the playground holding the wimpy kid’s head in one hand while taking roundabout swings at another kid with the other. It’s fun to watch, until you remember that the money in your wallet… and now in your bank… is [what’s really at stake.]( POWERED BY RESOURCE STOCK DIGEST Major Gold Stock Buy Alert Gold is breaking out. It's up $250 in the past two months and now trades above the all-important technical and psychological level of $1,800 per ounce. If you know one thing about the gold market… It's that when gold prices are rising, gold stocks move even faster and higher. I have been loading up on one gold mine developer in particular in anticipation of this bull run. Shares are up 71% in the past few months, but have much farther to go as a new gold bull market gets underway. [Click here to learn all about it.]( The Daily Missive from The Wiggin Sessions is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to The Wiggn Sessions delivering daily email issues and advertisements. To end your The Daily Missive from The Wiggin Sessions e-mail subscription and associated external offers sent from The Daily Missive from The Wiggin Sessions, feel free to [click here.]( Please read our [Privacy Statement.]( For any further comments or concerns please email us at feedback@wigginsessions.com. If you are having trouble receiving your The Wiggin Sessions subscription, you can ensure its arrival in your mailbox by [whitelisting The Wiggin Sessions.]( © 2023 The Wiggin Sessions 808 Saint Paul Street, Baltimore MD 21202. 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