Why is the failure of Silicon Valley Bank important?
SVB's problems give us a clue about potential changes in banking and in the economy.
I recorded this 54-minute podcast on Friday, March 31.
It expands on the material presented in my March 21 essay, “Fake Banks and Real Banks.”
As usual, a transcript is attached for those who prefer to read it. The transcript will be useful in fiinding the references used to substantiate the credit-creation theory of money, as opposed to the erroneous financial intermediation theory.
Please comment, like it, and recommend it to your friends!
Thanks for reading and listening.
HardmoneyJim, March 31 2023
I support your mission wholeheartedly and believe you are doing a good job of making an arcane subject comprehensible. Money production always has both an ethical foundation and an economic one quite apart from the technical one. I think it is obvious to those who have been watching this for some time now know that as the money production machine goes asymptotic a) something is going to break and b) it won’t be pretty when it does. Preparing people for that inevitability is difficult and not always well rewarded (remember Laocöon’s fate for trying to warn the Trojans about that odd wooden horse that arrived at the City gates), but essential work nonetheless.
Enjoyed this and especially your linking accounting skills to economics. I have been in business of 30+ years and am constantly astonished at the lack of even basic understanding of balance sheet mechanics from people who are quite happy to expound on how the universe functions. Also found the link to the BoE paper valuable. Thank you.