Rafi Farber: Deal or No Deal, Banks Will Suffer Either Way And Pressure Will Mount On the Fed

With the Treasury down to $68 billion and a debt ceiling deal just around the corner, few are considering what happens to banks when a deal finally is struck and the Treasury has to raise $1 trillion in short-term cash in a matter of weeks.

That borrowing capacity has to come from somewhere, and it’s going to come from bank deposits, which are already being vacuumed out of the banking system at rates that rival the Great Depression.

Deal or no deal, the banks are going to get clobbered, and when they do, the Fed will ultimately have to cut back down to zero. And when that happens, we all know what happens to silver.

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