Why did Silicon Valley Bank go bust? Because its assets were eroded. Why that? Because it bought US Treasuries. Why that? Because “it’s gilt”, because the government encouraged them to do so — copper-bottomed blue-chip! But which then plunged in value. Why that? Because inflation >> higher interest rates. Higher interest rates >> lower bond price. Because that’s the iron law, the first thing I learned in 1969 in Eco 101, bond prices and interest rates are inversely correlated. Why inflation up? Because US government firehosed cash into the economy 2020-22. Why that? Because lockdowns, coz Covid. People needed money to make up for lost business. Why lockdowns? GOOD question! At the time there were other options, mainly the a great Barrington Declaration. But it was snuffed out because government had its own agenda: lockdowns are the only way. They were not. We knew then, but were ignored and vilified. We still know now.
To blame this on anything other than government mishandling is Silicon Valley BUNK.
