Staff Reports
America’s continued economic turmoil is causing widespread panic among consumers and depositors, and U.S. Rep. Thomas Massie (R-KY) took to Twitter to expose the government’s blundering hand in causing the “malfeasance” and “failure” of Silicon Valley Bank, thanks to the Federal Reserve’s shenanigans.
Let’s review the Federal Reserve Bank’s many roles, & how each of them enabled the SVB failure/malfeasance:
(1) Santa Claus.
By keeping interest rates artificially low, FED stimulated the economy, & nudged those with capital into the VC space creating demand for a bank like SVB.— Thomas Massie (@RepThomasMassie) March 12, 2023
Massie criticized the Fed’s role as “Santa Claus” by continuously setting low interest rates for years. This allowed for economic growth and encouraged those with cash to invest into venture capital, thus creating a need for an institution like Silicon Valley Bank.
(2) Arsonist.
FED created $5 trillion out of thin air so Congress could inject this money into the economy. There weren’t 5 trillion dollars to borrow during COVID, and certainly not at the low rates imposed by FED. Inflation was off to the races thanks to dilution.— Thomas Massie (@RepThomasMassie) March 12, 2023
(3) Firefighter.
After setting the blaze, FED came to the rescue to fight inflation by rapidly increasing interest rates. As a result, net VC startup deposits into SVB slowed, while assets held by SVB (long-term low-interest government debt) became less valuable.— Thomas Massie (@RepThomasMassie) March 12, 2023
(4) Trauma Doctor.
Will the FED play a role in bailing out SVB depositors and other banks? Possibly by lowering rates, buying their holdings at above value, or creating more money for bailouts. None of these are free. But the FED becomes Santa Claus again and inflation rages on.— Thomas Massie (@RepThomasMassie) March 12, 2023
We, the American people, would be better off if the Federal Reserve Bank, an instrument of the very wealthy and connected, did not exist to socialize the risks of insiders while distorting our economy, destroying jobs, and devaluing our currency.
— Thomas Massie (@RepThomasMassie) March 12, 2023
Thomas Massie Explains How the Federal Reserve Enabled Silicon Valley Bank's Failure https://t.co/Qe4sSOIw8N
— Townhall.com (@townhallcom) March 13, 2023
The congressman then explained how the Fed acted like an “arsonist” by creating $5 trillion out of thin air and putting it into Congress’ pockets, which now only serves to harm America’s economy.
Massie also expressed his disdain for the Fed’s “firefighter” stance, wherein it rapidly increased interest rates to combat inflation, drastically slowing down startup deposits to Silicon Valley Bank while the institution’s assets plummeted in value.
He claimed that the Fed is likely to put their “Santa” hat back on and play the role of “trauma doctor,” leading to the same destructive results.
Massie argued that the Federal Reserve Bank should not exist as it socializes risks for insiders while damaging America’s economy and devaluing its currency. Americans would be better off without it.
