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Post: State Duma warns of a crisis in the United States comparable to the Great Depression


People pass through the Silicon Valley Bank headquarters in Santa Clara, California. archive photo

State Duma deputy Aksakov: a crisis comparable to the Great Depression may arise in the USA

MOSCOW, March 13 – RIA Novosti. While a financial crisis similar to or more serious than the Great Depression could break out in the United States if the Fed does not take drastic steps to bail out collapsed banks, attempts to prevent the crisis will only delay the crisis – sooner or later it will, he commented. Anatoly Aksakov, chairman of the RIA Novosti financial market committee.

California regulators closed Silicon Valley Bank on March 10, the largest bank failure in the United States since the 2008 financial crisis. The collapse of the SVB turned out to be associated with an increase in the discount rate of the US Federal Reserve System (FRS), which led to the depreciation of assets on the balance sheets of many financial institutions. Also on Sunday, authorities closed the major New York Signature Bank due to systemic risks, and on March 8 it was announced that the crypto-focused bank Silvergate will be shutting down.

People near the coast of Silicon Valley in Santa Clara, California - RIA Novosti, 1920, 11/03/2023

Silicon Valley Bank collapse: American economy plays Russian roulette

“If the FED System does not take decisive action now, if it does not take firm steps to save these banks, then a rather serious crisis will break out, comparable to periods of the Great Depression, and perhaps a more serious global crisis,” Aksakov said. .

He noted that the US Federal Reserve will now “open the money machine” and take control of the situation to “close the relevant holes” and prevent the financial bubble from turning into a dire economic crisis. However, Aksakov said that “this patch will come at the expense of a future explosion, which will inevitably have to happen.”

An employee near the Silicon Valley bank in Santa Clara, California - RIA Novosti, 1920, 13.03.2023

The expert spoke about the consequences of the collapse of the bank SVB.

The deputy noted that the crisis that is currently unfolding in the United States is due to the fact that the country’s officials shifted their attention from domestic problems to Europe and Ukraine, and instead of solving internal problems, they began to send annexes to Ukraine. unsecured money “the participation of the Americans in a special operation … this money aggravates the situation of the country and the entire Western world, since it is not supported by anything … well, it is provided by weapons that are not productive product, you cannot eat and clothe them,” Aksakov added.

The developing situation shows that the West and the USA must move on to domestic tasks and problems. Thus, the country’s authorities can take a series of measures to bail out failing banks, for example by tying them to other banks or selling them for a dollar. This is a possible step that will “let the problem be stopped today”. “Sooner or later, this will result in a crisis or the collapse of the financial architecture created in the US after World War II,” Aksakov said.

Silicon Valley bank branch in Wellesley, Massachusetts - RIA Novosti, 1920, 13.03.2023

Zakharova suggested how the USA will “protect” the banking system after the collapse of the SVB

Source: Ria

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