Late last night in my Twitterfeed was an announcement that the Fed is changing the (secretive) manner in which it establishes “stress tests” for banks.
Today, Christmas eve, (a day when no one watches the news) came the anouncement that the banks, have sued the Fed to make them do just that.
I’m not going to call this a “conspiracy,” mpore like “stragety.”
The involved parties are taking decisive steps to ensure this gets minimal attention. (Wouldn’t want to cause a panic.)
does this mean they are trying to make sure money isn’t worthless?
I can see it now- that $100 gift card you got for Christmas can buy a pack of gum…
For a VERY long time banks had fixed reserve ratios. (3% on some stuff, 10% on most stuff.)
When the economy is RELLY BAD the Fed wishes that were lower,
then the banks would lend out more and even though the actual economy has not changed it pumps up the economy.
When the banking sector is in trouble the Fed wishes that were higher. “Dang it! If they had just kept more money in reserves they would be able to cover this mess using their reserves.”
In 2020 the Fed decided "We are gonna change that and use a somewhat secretive “stress test” instead. Banks are gonna have an ever-moving target and the public won’t know what the target it is, etc…
