Elon Musk Warns: Bank Crisis Echoes 1929 Stock Crash

Elon Musk, CEO of Twitter, said that the present financial crisis in the United States is comparable to the 1929 stock market disaster. Musk’s post came in response to Cathie Wood, the founder, and CEO of ARK Invest, who discussed the current banking crisis, accusing authorities of disregarding conventional banking institutions in favor of the decentralized financial sector.

Crypto unfazed amid chaos

Although increased uncertainty threatens their centralized rivals, BTC, ETH, and other crypto networks have been unaffected by the instability, according to Wood. She pointed out that even unsettled stablecoins fell prey to the unchecked financial institution authorities’ failure to protect them.

Wood said the government agencies needed to improve because they focused on the wrong things. She said that authorities should have been concerned more with the centralized and opaque points of failure lurking in the old financial system rather than trying to shut down decentralized, transparent, open-to-scrutiny, and well-functioning economic systems.

Wood remarked that policymakers should have concentrated on the impending banking system crisis, characterized by liability and asset term anomalies, with short rates jumping 19-fold in less than a year. According to her, deposits in the banking industry were decreasing annually for the first time since the 1920s.

Musk echoes Wood’s Crash Prediction

Musk agreed with Wood’s assessment, comparing the present situation to the 1929 stock market collapse, which prepared the way for the Economic Crisis.

Before the significant Recession, a public utility holding companies were criticized for “shady” activity, causing Congress to implement several government limitations to restore market stability. According to Wood, under the current administration, the Fed overlooked the problem and did nothing to prevent a wave of bank failures.

This time, officials are seen taking measures to control the situation. The Federal Reserve, Treasury Department, and FDIC have all announced strategies to protect depositors from the current crisis. Yet, there needs to be more clarity on how the problem will be handled since investors remain optimistic about the future of their investments.

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