A “60 Minutes” episode that aired on Sunday raised eyebrows after the Minneapolis Fed President said that there is an “infinite amount of cash.” This was said as reassurance, but many didn’t interpret it that way.
The Federal Reserve has been active trying to calm fears recently regarding everyday people’s savings. In a recent interview on “60 Minutes,” Minneapolis Fed President Neel Kashkari assured the public that their money is safe.
A clip from the latest “60 Minutes” episode has been circulating online amid criticism that the Fed is overextending its monetary powers. In it, Minneapolis Fed President Neel Kashkari told “60 Minutes” that the Fed has “unlimited cash.”
“Your ATM is safe. Your banks are safe. There’s enough cash in the financial system and there’s an infinite amount of cash in the Federal Reserve.”
It seems that there really are no limits on how much the Federal Reserve can print—and they’re saying it out in the open now with no reservations.
The Federal Reserve says there is an "INFINITE AMOUNT OF CASH"
This is quite literally the reason bitcoin was created. pic.twitter.com/JTE9TVoSr0
— Vis (@Vis_in_numeris) March 23, 2020
Many saw this as a clear sign of a potential panic. In the past few weeks, the Fed has been exceptionally outspoken about how ‘secure’ it is. Such language wasn’t even this strong when the 2008 financial crisis hit.
That is the face of panic.
— Official sources dispute Rudy Havenstein (@RudyHavenstein) March 23, 2020
it's all in the eyes, fellas, watch the eyes
— Imperator-Elect Channing Datum (@UCostliness) March 23, 2020
The current crisis may remind some of you of a quote by former Fed Chairman Alan Greenspan, who said in 2005:
“We can guarantee cash benefits as far out and at whatever size you like, but we cannot guarantee their purchasing power.”
That essentially sums up where we are today—the Fed can keep printing the dollars, but in doing so, it will continue to erode our purchasing power.
Never before have we seen the U.S. Federal Reserve care so little about how many dollars it is pumping into circulation. That’s probably why it’s now begging savers not to start a bank run. Recently, the financial body announced ‘unlimited QE’ aimed at keeping the entire market afloat.
Just as concerning, last week BeInCrypto reported that all reserve requirements for U.S. banks were cut to 0%. That effectively means that banks have no obligation to hold anything in reserves relative to their balances. Close to 0% interest rates (or even lower) may soon become the ‘new normal,’ as it already is in Europe and Japan.
However, this has all been a long time coming. The month started out remarkable, with the Federal Reserve pumping $168 billion into the economy on March 12. Over the next two weeks, this number kept increasing to what it is today: unlimited. The ramifications of the Fed’s monetary excesses will soon be felt, but for now, financial markets live to see another day.