This year's third bank failure is here. Entering the "longer" phase of the Fed's hiking path plus $95 billion in QT is a toxic combo for cheaply levered players.
Thanks again for the great content. In reading TBL, The Informationist, Lynn Alden and more I've come to the conclusion that we know the problem, and the answers, but we don't hold the power. That's why I'm so happy to hear that you will be going to Washington as we need credible people like yourself to educate our elected officials. Thank you for doing that, and yes, I'd like to support your efforts by buying books for my elected officials, Senators John Hickenlooper and Michael Bennet, and Representatives: Ken Buck and Brittany Pettersen.
But I have to ask myself, and your followers, what can I/we do beyond sponsoring a book? My answer is to correspond frequently with my elected officials. So today I drafted a letter that I am sharing below with the hope that we can start a "correspondence movement". Please feel free to share this letter with anyone and encourage them to copy or edit as they see fit to start a "correspondence movement". We are not powerless!
Here it is:
Dear Mr. Bennet,
I'm sure everyone would agree that "good decisions/legislation" requires good information.
This week we are witnessing the failure of First Republic Bank (14th largest bank in the nation) despite 130 billion in capital infusions since the SVB failure in March.
These failures are just symptoms of the structural problems/disease inherent in our monetary system, and there is no more pressing issue before congress than understanding the problem before legislating a solution.
Here is a link to the Congressional Budget office’s own report that graphicly shows the “discretionary” spending that congress just passed for 2023 https://www.cbo.gov/system/files/2023-03/58890-Discretionary.pdf . How does congress sleep at night knowing that the CBO projected deficit for fiscal year 2023 (based on the first 6 months of data) is going to be 2 trillion dollars.
This type of fiscal deficit comes in the form of debt shouldered by the US tax payer. To be blunt, we are quite literally being monetarily enslaved by our elected officials.
Congress is about to engage in the perennial “debt ceiling” debate, and yet everyone knows that the ceiling will be increased. Why? Because not doing so will initiate a melt down of the world financial system. Such is the burden of being the “world reserve currency” and “world reserve asset”.
Currently there is no choice but to raise the ceiling; however, there is a choice about changing our future fiscal behavior so as to avert the impending debt spiral that is/will destroy our nation.
My first ASK: Please make sure any raising of the debt ceiling is tied to a real budget to constrain/reduce spending. This is the only way out.
My second ASK: Fall on your own sword, be brave, and do what is in the best interest of your constituencies even if that might jeopardize your re-election.
I am asking even as I remind you that you work for us.
Nik,
Thanks again for the great content. In reading TBL, The Informationist, Lynn Alden and more I've come to the conclusion that we know the problem, and the answers, but we don't hold the power. That's why I'm so happy to hear that you will be going to Washington as we need credible people like yourself to educate our elected officials. Thank you for doing that, and yes, I'd like to support your efforts by buying books for my elected officials, Senators John Hickenlooper and Michael Bennet, and Representatives: Ken Buck and Brittany Pettersen.
But I have to ask myself, and your followers, what can I/we do beyond sponsoring a book? My answer is to correspond frequently with my elected officials. So today I drafted a letter that I am sharing below with the hope that we can start a "correspondence movement". Please feel free to share this letter with anyone and encourage them to copy or edit as they see fit to start a "correspondence movement". We are not powerless!
Here it is:
Dear Mr. Bennet,
I'm sure everyone would agree that "good decisions/legislation" requires good information.
This week we are witnessing the failure of First Republic Bank (14th largest bank in the nation) despite 130 billion in capital infusions since the SVB failure in March.
These failures are just symptoms of the structural problems/disease inherent in our monetary system, and there is no more pressing issue before congress than understanding the problem before legislating a solution.
While this link (https://open.substack.com/pub/jameslavish/p/interest-rate-risks-are-collapsing?r=exxlp&utm_campaign=post&utm_medium=email) will give clarity on “interest rate risks” and how they have underscored the insolvency of those banks (and many more to come), the real problem is excessive debt/leverage in our system (public and private).
Here is a link to the Congressional Budget office’s own report that graphicly shows the “discretionary” spending that congress just passed for 2023 https://www.cbo.gov/system/files/2023-03/58890-Discretionary.pdf . How does congress sleep at night knowing that the CBO projected deficit for fiscal year 2023 (based on the first 6 months of data) is going to be 2 trillion dollars.
This type of fiscal deficit comes in the form of debt shouldered by the US tax payer. To be blunt, we are quite literally being monetarily enslaved by our elected officials.
Congress is about to engage in the perennial “debt ceiling” debate, and yet everyone knows that the ceiling will be increased. Why? Because not doing so will initiate a melt down of the world financial system. Such is the burden of being the “world reserve currency” and “world reserve asset”.
Currently there is no choice but to raise the ceiling; however, there is a choice about changing our future fiscal behavior so as to avert the impending debt spiral that is/will destroy our nation.
My first ASK: Please make sure any raising of the debt ceiling is tied to a real budget to constrain/reduce spending. This is the only way out.
My second ASK: Fall on your own sword, be brave, and do what is in the best interest of your constituencies even if that might jeopardize your re-election.
I am asking even as I remind you that you work for us.
Sincerely,
Mark R. Link D.D.S.