The recent collapse of major US banks and the need for federal intervention have reignited discussions to identify the most effective ways to safeguard collapsing economies. Comparing the episode to the 2008 financial crisis, leading economist Peter Schiff found that increased banking regulations contribute to a worsening economic crisis.
A deeper analysis of Silicon Valley Bank (SVB) by a group of economists revealed that almost 190 banks in the United States are at risk of a depositor-driven collapse. It was highlighted that monetary policies set by central banks could damage long-term assets such as government bonds and mortgages, creating losses for banks.
The 2008 financial crisis was driven primarily by the collapse of the real estate market. However, Schiff believed that the crisis was caused by "too much government regulation."
When the Gob. imposed many novelties #banking regulations after 2008 #Financial crisis, they assured us that what is happening right now would never happen again. But one of the reasons we had the 2008 financial crisis was too much government. regulation. That is why this crisis will be worse.
—Peter Schiff (@PeterSchiff) March 17, 2023
Schiff highlighted how the US government introduced new banking regulations after the 2008 financial crisis, vowing that "what's happening now will never happen again." She added:
“But one of the reasons we had the 2008 financial crisis was too much government. regulation. That is why this crisis will be worse.”
Finding the right balance between regulations and banking institutions is important to Schiff, considering that Puerto Rico regulators shut down Schiff's bank not long ago, on July 4, 2022.
Despite no evidence of wrongdoing, Puerto Rican regulators closed my bank anyway due to net capital issues, instead allowing a sale to a highly qualified buyer who promised to inject capital well above regulatory minimums. As a result, accounts are frozen and clients may lose money.
—Peter Schiff (@PeterSchiff) July 3, 2022
At the time, Crypto Twitter reminded Schiff why millions of people around the world vouch for Bitcoin (BTC) adoption in pursuit of financial freedom.
Related: SVB confusion forces SVC Bank of India to issue clarification notice
At the other end of the spectrum, crypto entrepreneurs have begun to double down on Bitcoin's epic comeback. Former Coinbase CTO Balaji Srinivasan predicted that Bitcoin would reach a value of $1 million within 90 days.
Sir, I think we have a deal. https://t.co/9JYaLNo9Eq
—James Medlock (@jdcmedlock) March 18, 2023
As Cointelegraph reported, pseudonymous Twitter users James Medlock and Srinivasan made the bet based on their differing views on the future of the US economy amid ongoing uncertainty regarding the country's banking system.
Srinivasan's bet revolves around an impending crisis that will lead to deflation of the US dollar and drive the price of BTC to $1 million.
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