<div id="readability-page-1"><div><div><p>Market veteran <strong>Lawrence McDonald</strong> has a stark warning regarding a recent GOP proposal spearheaded by Sen. <strong>Ted Cruz</strong> (R-Texas) that calls for nixing federal interest payments to banks.</p><p><strong>What Happened: </strong>On Wednesday, McDonald, the founder of the newsletter <strong>The Bear Traps Report</strong>, posted on X, quoting a post by Bloomberg reporter <strong>Steven Dennis</strong>.</p><p>The post shared by Dennis features a fact sheet containing a proposal by Cruz to eliminate the interest rate on the reserve balances (IORB) program instituted in 2008. According to Cruz, the policy costs taxpayers more than $100 billion annually and has cost an estimated $1.1 trillion over time, with nearly half of it going to foreign financial institutions.</p><p>“It makes no sense to keep enriching banks, especially non-American ones, while the American taxpayer suffers under ballooning deficits,” Cruz wrote in the circulated fact sheet.</p><p>While this measure was adopted to stabilize the financial markets during the 2008 financial crisis, it’s potential repeal is being flagged by McDonald as financial repression. </p><p>“Financial repression is coming,” McDonald wrote on X, drawing parallels between this proposal and other crisis-era moves, which involve the government channeling funds from the private sector to itself, in order to tide over deep fiscal stress.</p><div><p></p><h3>Pre-IPO Offer: Get A Piece Of A Nearly $5T Global Opportunity By Joining BOXABL As An Early Shareholder At Just $0.80/Share</h3><p></p><div><div><div><ul> <li><strong>Massive Demand &amp; Disruptive Potential</strong> – Boxabl has received interest for over 190,000 homes, positioning itself as a major disruptor in the housing market.</li> <li><strong>Revolutionary Manufacturing Approach</strong> – Inspired by Henry Ford’s assembly line, Boxabl’s foldable tiny homes are designed for high-efficiency production, making homeownership more accessible.</li> <li><strong>Affordable Investment Opportunity</strong> – With homes priced at $60,000, Boxabl is raising $1 billion to scale production, offering investors a chance to own a stake in its growth.</li> </ul> </div></div><div><p><span><img src="https://imageproxy.pbkrs.com/https://cdnwp-s3.benzinga.com/wp-content/uploads/2024/10/22181427/Paolo-and-Gali.jpg/query-YXV0bz13ZWJwJmRwcj0yJm9wdGltaXplPW1lZGl1bSZ3aWR0aD0yMzA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="460" height="306" original-src="https://imageproxy.pbkrs.com/https://cdnwp-s3.benzinga.com/wp-content/uploads/2024/10/22181427/Paolo-and-Gali.jpg/query-YXV0bz13ZWJwJmRwcj0yJm9wdGltaXplPW1lZGl1bSZ3aWR0aD0yMzA"/></span></p></div></div><div><div><p><span><b>Share Price: </b></span><span>$0.80 </span></p><p><span><b>Min. Investment: </b></span><span>$1,000 </span></p><p><span><b>Valuation: </b></span><span>$3.5B </span></p></div></div></div><p><strong>Why It Matters: </strong>While McDonald has raised concerns regarding Cruz’s plans, several other experts and economists have come out in support.</p><p>This includes <strong>Jeremy Siegel</strong>, a senior economist at<strong> WisdomTree</strong>, who called the political interest in the Fed’s operating regime a “potentially underappreciated development.”</p><p>The strategists at <strong>JPMorgan Chase &amp; Co.</strong> <span>JPM</span>, however, have warned against this move, saying that abolishing the IORB will lead to liquidity issues for banks, alongside the crowding of participants in Treasury bills, repurchase agreements, and fed funds.</p><ul> <li><strong>Jamie Dimon Recalls First Palantir Meeting: ‘Holy Christ, This Is Unbelievable—’ JPMorgan Now Has 600 AI Use Cases, $2 Billion Annual Investment On AI</strong></li> </ul><p><em>Image Via Shutterstock</em></p></div></div></div>

<p>Market veteran Lawrence McDonald warns of impending financial repression due to a GOP proposal led by Sen. Ted Cruz to eliminate federal interest payments to banks. Cruz argues that the current program costs taxpayers over $100 billion annually and has totaled $1.1 trillion, benefiting foreign institutions. While McDonald expresses concern, some experts, including Jeremy Siegel, support the proposal, while JPMorgan warns it could create liquidity issues for banks.</p>

- Market veteran Lawrence McDonald warns against a GOP proposal by Sen. Ted Cruz to eliminate federal interest payments to banks, citing potential financial repression.  
- Cruz argues that the interest rate on reserve balances costs taxpayers over $100 billion annually and has led to significant losses, particularly benefiting foreign institutions.  
- While some experts support the proposal, others, including JPMorgan strategists, caution that its repeal could create liquidity issues for banks and disrupt financial markets.

'Financial Repression Is Coming,' Warns Lawrence McDonald As Ted Cruz Seeks To End $1.1 Trillion Fed Interest Payment Scheme