Former president Donald Trump weighed on the state of the U.S Economy following the collapse of Silicon Valley Bank (SVB), warning of a “great depression” and calling Joe Biden the Herbert Hoover of the modern age.
“With what is happening to our economy, and with the proposals being made on the LARGEST AND DUMBEST TAX INCREASE IN THE HISTORY OF THE USA, TIMES FIVE, JOE BIDEN WILL GO DOWN AS THE HERBERT HOOVER OF THE MODERN AGE,” Trump wrote Truth Social.
Trump went on to warn the bank collapse signalled a looming great depression.
“WE WILL HAVE A GREAT DEPRESSION FAR BIGGER AND MORE POWERFUL THAN THAT OF 1929. AS PROOF, THE BANKS ARE ALREADY STARTING TO COLLAPSE!!!” Trump added.
Silicon Valley shares took a nosedive by 60 percent while the NASDAQ exchange halted trading in the stock on Friday.
Biden praised his supposed “quick action” in the face of the bank collapse, while blaming the problem on Trump.
“Your deposits will be there when you need them. Small businesses across the country that deposit accounts at these banks can breathe easier knowing they’ll be able to pay their workers and pay their bills,” Biden said. “And their hardworking employees can breathe easier as well.”
FDIC insurance guarantees the protection of all deposits up to $250,000, assuring depositors’ funds will be fully available starting Monday.
However, many small businesses and venture-capital firms banking with SVB have much more than $250,000 in the bank.
According to a report from Yahoo Finance, those who failed to pull their money and have over $250,000 in the bank will only receive a “receivership certificate,” which does not guarantee they will get their money back.
“Had SVB held those bonds to maturity, it wouldn’t have lost money. But being forced to sell caused losses that threatened the bank’s solvency. When it indicated the need to raise new capital, more depositors pulled their money, triggering a fatal run,” Yahoo Finance reported.
Trump predicted all of this in 2020, warning that if Biden became President, “your jobs will be gone. I mean, you’re going to have a depression, if that happens… The biggest single headwind [to the stock market] is if he got in.”
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