A few years back, an idea became popularized. It consisted of giving everyone a trophy just for playing. I understand the espoused reasoning that the losing team felt bad and should be protected from the shame, blame and regret etc. Maybe that generational influence is now running the Treasury, FDIC and the Federal Reserve. Obviously, even the losers at SVB deserve a trophy in the form of a full backstop to depositors. The message is clear…No One is responsible and everyone wins. We must prevent bad actors from getting their comeuppance. Besides, those poor Billion and Million depositors shouldn't be made into victims. This stinks and eradicates prudence while opening the door to more risk taking without consequences. It won't end well.
The Treasury, FDIC and the Federal Reserve are now openly showing their innards and in so doing will further hasten the destruction of the USD. They have now proven that the they will not let anyone fail, with exception of main street, and showed the world that the USD is backed by failure and the full faith and credit they have in losers. Now that's strong backing.
All of this “help” is paid by taxpayers who play the game by the rules. Even if there is no tax per se such “help” prints more money out of thin air, debases the dollar and its purchasing power and literally broadcasts that the US has no spine and is 100% behind giving everyone a trophy. Goody goody, no one gets hurts and no one learns a lesson and no one has any reason to excel because the line between those that do and those that don't is not merely blurred, but is gone. Follow the rules? What rules???
Best,
Donn Marier
DM-Your Own CFO