Big if true
Discussion
So sick
FDIC is made for the case that one bank fails. It won’t help you when a systematic breakdown happens
What does "won't work" mean in this context?
if trust is lost in the fed, no amount of fed intervention will mediate that
Although trust means different things here to different groups.
We may want to trust that the fed not print money and debase the currency.
But many other market participants actually want to trust that the fed will backstop, and kick the can.
So it's probably a slow burn as people understand that bitcoin is better to store wealth than other asset classes. Rather than a crisis moment that spurs hyperinflation, hyperbitcoinization etc.
FDIC has about ~225 billion to backstop failing banks. This is sufficient to backstop 1-2 failing banks, depending on the size. However, if a system breakdown happens, the FDIC won’t be able to safe most depositers. Only if the Fed print prints a ton of money, this would be possible.
It looks like in the SVB case, a special type of loan arrangement does the heavy lifting of the "printing money" part