Louisiana Senator Compares Modern Banks to ‘Sophisticated Ponzi Schemes’ – Economics Bitcoin News
Louisiana Republican Senator John F. Kennedy recently stated in an interview published on Wednesday that the US Federal Reserve may need to increase the federal funds rate to 8-10% to address inflationary pressures in the country. Kennedy’s comments come after he criticized the Biden administration in mid-March for bailing out Silicon Valley Bank and Signature Bank, asserting that the decision to make all depositors full “was a bailout,” no matter what it was called.
Senator John F. Kennedy: “Powell will have to raise prices much higher than they normally would be”
During a recent interview with CNBC, Louisiana Republican Sen. John F. Kennedy she expressed His belief is that the US central bank will need to increase the bank rate from its current level of 5% to around 8-10% to combat inflation. Kennedy went to state That Federal Reserve Chairman Jerome Powell will have to raise interest rates much higher than usual if Congress does not slow down its stimulus spending.
On the same day that Senator John F. Kennedy made his remarks, the US Federal Reserve raised the benchmark bank rate by 25 basis points, marking the 10th consecutive rate increase and raising the rate to its highest level in nearly 16 years.
In addition to discussing inflation, Kennedy also addressed the issue of the debt ceiling, calling on President Biden to have a serious conversation with House Speaker Kevin McCarthy (R-Calif.) about how to allocate resources and bring down inflation. According to Kennedy, it was time for leaders to have a “grown-up discussion” on this crucial issue.
Kennedy added:
I don’t think you can do that without cutting back on spending and debt.
Kennedy compares modern financial institutions to pyramid schemes
Senator John F. Kennedy also addressed concerns about the US banking industry, warning that modern technology can quickly turn a small disruption into a full-blown panic. According to Kennedy, banks today rely heavily on trust, which is much less fortified than it used to be. In fact, Kennedy went so far as to compare modern financial institutions to pyramid schemes, stating that they are essentially “complex Ponzi schemes”.
Kennedy asserted: “They really … don’t take this the wrong way … elaborate Ponzi schemes.”
US Treasury Secretary Janet Yellen recently warned that the country could face a possible default on its debt limit in June, which could have dire economic and financial consequences. With the United States currently carrying a staggering $31 trillion in debt, the stakes are high.
However, Republicans refuse to raise the debt ceiling unless some mandates related to green energy and climate change are revoked from the Inflation Reduction Act. Senator John F. Kennedy’s recent comments on the issue follow his remarks Cash President Biden dealt with the collapse of Silicon Valley Bank and Signature Bank in mid-March.
What do you think of Senator Kennedy’s comments? Do you agree or disagree with his assessment? Share your thoughts in the comments section below.
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