by Jay Davidson
American Thinker
My bank’s bond portfolio is generating a greater yield than loans are. That is rare. A 525-basis-point increase in the federal funds rate in less than one year is very rare, too.
The Fed Reserve drove short rates up dramatically and inverted the yield curve. Fed fund (short) rates are higher than the index for loan pricing — namely, five- and ten-year treasury rates. Monetary Policy is crushing net interest income for banks. That strangles lending activity, which depresses new capital for business expansion.
Further, the Fed’s actions crushed business activity in a number of ways. It created uncertainty in the market. Investors and businesses are not buying or selling, so there is no lending. Velocity is zero.
Fed dabbling in MMT (Modern Monetary Theory: Q.E., or printing money) is devastating our private economy and condemning our children to massive debt.