Professor Jeremy Siegel provided his thoughts on the US economy, bank collapses, and the future of bitcoin's price in his weekly commentary, which was released on Monday by the New York-based asset manager Wisdomtree.
Siegel is an emeritus professor of finance at the University of Pennsylvania's Wharton School and currently works with Wisdomtree as a senior investment strategy advisor.
Many people have encouraged the government to temporarily guarantee all deposits after several significant banks, notably Silicon Valley Bank and Signature Bank, went under. This would help to restore trust in the banking system and prevent runs on smaller banks.
"I'll say it again: until the entire bank system is reformatted, we need temporary insurance on all deposits everywhere". -Prof. Siegel emphasized.
"Full insurance is required for all payroll accounts. However, in general, we need far higher deposit protection so that these bank runs do not happen," he continued. "We need protection from bogus loans that create deposits.
Janet Yellen, the secretary of the U.S. Treasury, stated last week that the federal government is not thinking of insuring all deposits, but it could if it were necessary to stop ontagion.
The recent market volatility has also given me more hope for the future, said Professor Siegel.
"If this financial incident had happened later, our rates would have been significantly higher.
One of the benefits of the current banking crisis will therefore be a natural easing of the tightness of policy.
"I want the Fed to resume increasing the money supply at a rate of 5%, which is consistent with 2% inflation and a real economic growth rate of 2% to 3%. Liquidity is a concern when the money supply has decreased over the past 12 months, as it has done right now". -The professor continued.
Bitcoin Forecast From Professor Siegel
The performance of bitcoin in the wake of the fall of numerous significant banks was also discussed by Professor Siegel.
He said that Bitcoin was "started with a dogma that the banking system was awful, and the economy needed an alternative," and that it was currently experiencing its longest-running surge.
A statement to the effect that "the narrative is helping drive money into bitcoin with a 30% gain in the previous week."
"In my opinion, bitcoin will decrease if consumers feel comfortable in banks once more. Yet in the interim, it's undoubtedly taking pleasure in a story that has been dormant for the past 6–9 months". -As the professor saw it.