Treasury Secretary Janet Yellen on Thursday testified before the Senate Finance Committee on Biden’s 2024 budget proposal.
Yellen was also grilled about Silicon Valley Bank’s failure.
Silicon Valley Bank shuttered last Friday after it was unable to produce enough cash for depositors.
Senate Finance Committee Ranking Member Mike Crapo (R-ID) got Janet Yellen to admit Biden’s inflation crisis led to rapid rate hikes which then led to the banking crisis.
Senator Crapo said SVB’s capital was losing value and they were not able to access their capital because of the Federal Reserve Chairman’s decision to rapidly hike rates in 2022.
Yellen admitted Biden’s inflation crisis ultimately led to the banking crisis.
“My understanding is that the bank, to meet liquidity needs had to sell assets that it expected to hold to maturity and given that the interest rate increases that have occurred since those assets, including treasuries – and government-backed – mortgage-backed securities they had lost market value,” Yellen said.
.@MikeCrapo asks if SVB had a liquidity risk issue.@SecYellen: “Well, there was a run on the bank. It had high reliance on uninsured deposits and there was a massive withdrawal of deposits that led to liquidity problems. The bank had to be closed for that reason.” pic.twitter.com/G3WCoRghxV
— CSPAN (@cspan) March 16, 2023
A story in three parts:
Joe Biden and Democrats in Congress created the inflation crisis by spending more than $6 trillion in a couple years.
Inflation hit 40-year highs because of Joe Biden.
Enter the Federal Reserve…
Federal Reserve Chairman Jerome Powell raised rates seven times in 2022 for a total of 450 basis points – or 4.5% to hedge inflation.
The sudden and dramatic rate hikes crushed Silicon Valley Bank.
Jerome Powell knew exactly what he was doing.
Silicon Valley Bank reportedly held $173 billion in deposits.
The Fed interest rate is at 4.57% and $117 billion of Silicon Valley Bank’s deposits were in mortgage-backed securities that were only yielding 1.56-1.66% – this caused a run on the bank.
By Friday Silicon Valley Bank was in FDIC receivership.
Every single SVB depositor was bailed out by the Biden Regime.
The question is, why didn’t the so-called bank regulators see that Silicon Valley Bank was a ticking time bomb?
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