Regional Bank "Eh I've got 100 of bonds, currently worth 75. How much will you let me borrow against them?"
Fed. "No problem sir, here's 100.
Regional bank "Thanks."
1 day later...
Fed "just checking our loan arrangements."
Regional bank "Er, having a few problems here. Run of depositors have meant we've spent the 100 you lent us. But no worries when you take us over you can take bonds we provided as collateral"
Fed "but but but they are only worth 75. Who is going to pay us the missing 25? If not you it will need to be the US taxpayer"
Regional bank "Yip. fiat eh?. We should have all stacked sats and stayed humble"
quoting nevent1q…grvu2Y < 4%