Banking crisis keeping gold above $1900 into Fed week

After hearing rumors of a"soft landing" from the Federal Reserve for the past year, an old-fashioned bank run has raised the odds considerably of the outcome from its aggressive rate-hike program ushering in a much harder one.

With visions of 2008 dancing in citizens’ heads, banks across the U.S. reached out to depositors on Monday to ensure them that their assets are safe after three banks failed last week. The Treasury and Federal Deposit Insurance Corporation issued a joint statement to ensure depositors at regulator seized SVB that their insured deposits would be available on Monday.

With lower prices for financial assets likely being the New Normal, how can solvency be resolved for regional banks with negative liquidity without sharply reducing interest rates to restore the 15-year Zero Interest-Rate Policy ? There was some confidence restored on Thursday after the European Central Bank moved forward with its plan to tighten its monetary policies with a 50 basis point across-the-board rate hike. The supersized rate increase means the troubles at Credit Suisse and financial market jitters were not enough for the central bank to back off its inflation fight.

The "Bond King" tweeted back in December,"Fed just follows the message of the two-year Treasury yield. You can see that on a chart of the fed funds target rate and the 2-year yield. So who needs the Fed? Why not replace it with the two-year Treasury yield?" The Fed Funds current target rate is at 4.50-4.75%.

If the world’s most powerful central bank continues hiking interest rates, then they ultimately risk breaking additional things and having investors losing more faith in the financial system. But if the Fed suddenly changes course on rate hikes, that will inevitably lead to deeply entrenched inflation for longer with the Fed having to lift its 2% inflation target.

We need Gold Bills to return. I've love to buy into gold, but not going to trust gold certificates, unless Government issued. Is there existing structure in USA?

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