Liberty Coin Service owner and CEO, Tom Coulson, says this week’s actions and statements by Federal Reserve officials as indicating a major risk of a near-term US economic downturn.
“On Tuesday, the Federal Reserve stepped in to inject liquidity into the bank overnight loan market by purchasing US Treasury debt from banks. The liquidity crunch in this market was so extreme that the annual interest rate on overnight bank loans spiked to 10% by Tuesday morning. The Federal Reserve injected $53 billion into this market on Tuesday and another $75 billion on Wednesday. Such a move almost always signifies major distress in the US banking system. The last time the Federal Reserve took such actions was in 2008, during the Great Recession, when banks were so afraid of possible failure by other banks that they were averse to lending overnight money to other banks.”