Twitter boss Elon Musk has issued a grim warning about the state of the economy.
President Joe Biden and the Democrats have flooded the economy with unlimited cash-printing since he came into office.
The non-stop spending has led many experts to start warning our leaders of what may be coming.
Just yesterday, Moody’s Investors Service cut its view on the entire banking system to negative from stable as the banking crisis deepens.
“We have changed to negative from stable our outlook on the US banking system to reflect the rapid deterioration in the operating environment following deposit runs at Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank (SNY) and the failures of SVB and SNY,” Moody’s said in a report.
“Banks with substantial unrealized securities losses and with non-retail and uninsured US depositors may still be more sensitive to depositor competition or ultimate flight, with adverse effects on funding, liquidity, earnings, and capital,” the report added.
“We expect pressures to persist and be exacerbated by ongoing monetary policy tightening, with interest rates likely to remain higher for longer until inflation returns to within the Fed’s target range,” Moody’s said.
“US banks also now are facing sharply rising deposit costs after years of low funding costs, which will reduce earnings at banks, particularly those with a greater proportion of fixed-rate assets.”
The politicians printed cash, the Fed raised rates too quickly and the banks were caught in the middle.
Hedge fund owner Cathie Wood said:
“While the US banking system was seizing up in response to bank runs threatening regional banks, Bitcoin, Ethereum, and other crypto networks didn’t skip a beat.
“Instability in the banking system threatened stablecoins, the on-ramps to DeFi, in stark contrast to regulator rhetoric
“Instead of blocking decentralized, transparent, auditable, and well-functioning financial platforms with no central points of failure, regulators should have been focused on the centralized and opaque points of failure looming in the traditional banking system.
“They should have been all over the crisis that was looming in plain sight:
“Asset and liability duration mismatches as short rates soared 19-fold in less than a year and deposits in the banking system were falling on a year-over-year basis for the first time since the 1920s!”
Musk responded by warning: “Lot of current year similarities to 1929.”
Lot of current year similarities to 1929
— Elon Musk (@elonmusk) March 15, 2023