{
  "p": "ons",
  "op": "post",
  "title": "Uncle Sam is the new Sam Bankman-Fried.",
  "url": "https://twitter.com/balajis/status/1634280650458152960?s=46&t=wP3-DPF_bdW8C072YfaLCg",
  "author": "Balaji Srinivasan (@balajis)",
  "body": "Uncle Sam is the new Sam Bankman-Fried. \n\nWhat just happened? TLDR: Tech ended up bailing out the government, because tech deposits were used to buy billions in government bonds under false pretenses. \n\nIt's actually very similar to FTX, in that the entity which people trusted with their money was (a) close to the US government and (b) told them it had the money...right until it didn't. \n\nHOW SVB HAPPENED \n1) First, the state set up fake accounting rules. Those rules allowed banks to tell customers they had money when they did not have money. [1] \n\n2) Next, the Fed suddenly sent interest rates to the sky after years of keeping them near zero, denying inflation was a problem, and/or telling the world inflation was transitory. [2] \n\n3) Finally, banks that bought bonds under the Fed's misleading guidance got rug-pulled. Skyrocketing interest rates meant the government bonds they bought just a few months ago were suddenly far less valuable. [3] \n\nSo that's why people don't have the money in their SVB accounts. All their capital was used to buy bonds from the government, and the government allows banks to legally lie about this in their accounting. \n\nUncle Sam is the new Sam Bankman-Fried. \n\n--\n\n[1] https://www.wsj.com/articles/bond-losses-push-silicon-valley-bank-parent-to-raise-capital-125e89d4\n\n[2] https://www.wsj.com/articles/bond-losses-push-silicon-valley-bank-parent-to-raise-capital-125e89d4\n\n[3] https://pbs.twimg.com/media/Fq4gHl-aQAYVejD?format=png&name=small & https://pbs.twimg.com/media/Fq4gMphaUAAt5q4?format=png&name=small\n\nQuote Tweet: https://twitter.com/jamiequint/status/1633956163565002752"
}