Part 3/14:
They explain that the appearance of stability is largely an illusion, maintained through mechanisms like the Federal Reserve’s interventions—such as allowing banks to access full value for long-term treasuries trading at a discount, effectively a form of quantitative easing. However, the inherent risk remains: if many depositors demand their funds simultaneously, insolvencies could explode into systemic crises. The scenario is reminiscent of the 2008 financial meltdown, but with unique mechanisms mediated through government-backed bailouts.