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RE: LeoThread 2025-08-22 08:58

in LeoFinance2 months ago

that doesn't mean we're not in for a very, very rough ride ahead. Now, as far as how we're getting there, it really all comes down to how the monetary system works. It's not really about interest rates, in my view. It's about risk aversion amongst those who actually do provide elasticity in the monetary system. That's these money dealer banks. That's why I keep coming back to the most interesting question is, why aren't they doing the job that we need them to do? That includes collateral redistribution. As I said, Silicon Valley Bank or any regional bank usually goes to a dealer and says, I need you to transform my ill-liquid loans into some usable collateral. Usually, the dealer says, that's no problem, but the dealer does undertake some risk in that situation. If the dealers are becoming risk averse, and we'll get to reasons why that might be, but if the dealers are becoming risk averse, has nothing to do with the interest rates. If the dealers are becoming risk averse, they're going (48/57)