Manage episode 358485385 series 2912054
This week, a Stansberry Investor Hour listener-favorite returns to the show... Kevin Duffy, editor of The Coffee Can Portfolio newsletter and hedge-fund manager, is back. And on his mind is the spectacular, near-overnight collapse of banks. But the foundation of this month's banking fiasco was laid years ago.
He explains how it all started... how Silicon Valley banks had risky loan books balanced with less-risky U.S. Treasurys... how banks' assets tripled during the two years of pandemic-driven government stimulus... and how the bond bubble burst and set off a chain reaction.
Kevin also shares that the root of the problem comes from the U.S.'s fractional-reserve banking system and reliance on the Federal Reserve and leverage. A simple way to understand the problems with today's banks is to list the characteristics of an ideal hedge fund. When that list is inverted, it describes a modern-day fractional-reserve bank.
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