The FDIC reported it had insurance reserves of $125.5 billion last December, covering $10.1 trillion of insured deposits while leaving $7.7 trillion in deposits that exceed the coverage exposed. The insurance fund can only resolve a regional bank’s discrete failure but not a system-wide failure. As a result, the FDIC was forced to fully insure deposits over $250,000 for Silicon Valley and Signature Banks to prevent the FDIC insurance fund’s insolvency and to stem depositor bank runs of regional banks. Conveniently it protected the coastal elite’s substantial uninsured funds at those banks. However, U.S. Treasurer Janet Yellen does not consider community and rural banks systemically important.
Circumventing the Debt Ceiling & Dodd-Frank Act
Last week, the Federal Reserve’s balance sheet exploded by $300 billion (see chart below). The balance sheet expansion wiped out half of the Fed’s quantitative tightening for the past nine months. The Fed lent over $150 billion through the discount window to provide banks liquidity. Also, $143 billion was lent to the FDIC without congressional approval, circumventing the debt ceiling since the Treasury’s Federal Reserve general account was depleted to $278 billion. The bailout of Silicon Valley and Signature Banks’ depositors violated the Dodd-Frank Act’s bail-in provisions.
The stealth quantitative easing is a half-baked and fallible solution if the fed funds rate is not substantially reduced. A steep drop in rates to near zero erases the banking system’s unrealized losses ($700 billion) on long-duration investments.
Recycling Deposit Flows
Enter Jamie Dimon, CEO of JPMorgan Chase, creating a consortium of large banks to deposit $30 billion into First Republic Bank (catering to wealthy tech executives) to boost the bank’s liquidity and prevent its insolvency. His scheme repatriates withdrawn deposits from regional banks deposited with the too-big-to-fail banks back into First Republic Bank.
He is coordinating efforts with Janet Yellen and Federal Reserve Chairman Jay Powell. It’s an outlandish workaround to keep First Republic from being placed into a conservatorship bridge bank like Silicon Valley and Signature Banks. The FDIC’s restructuring plans for First Republic so far have failed.
Dimon’s circular solution is to stabilize the First Republic Bank and is reminiscent of chain letters that sweep the Internet for money. A bank chain letter strategy makes as much sense as the other half-witted solutions; here’s how it would work.
The Parachute Quandary
When your main parachute doesn’t open, that’s a problem. When the auxiliary parachute fails, that’s a predicament. Only problems can be solved. The financial crisis is a predicament due to the system’s hyper leverage and a catastrophic national debt level that has eroded the public’s confidence in the fiat system. The outcome is either a deflationary depression (save the dollar, crush the global economy) or a hyperinflation depression (save the bond market, fund runaway government deficits). Naturally, the elites, which don’t produce anything but misery, will choose the latter while blaming others. Plan and prepare accordingly.
Bob Bishop is a forensic investigator and retired CPA. He has written for the American Thinker, Gateway Pundit, Sonar21, and CorsiNation.
It appears that the only way to rid ourselves of this failed government is for it to collapse and die.
The Constitutional Republic was an experiment intended for a God honoring peoples who upheld justice, fairness above all other things.
If only people had a heart to hold to these truths. But the facts speak to an entirely different and evil heart that resides in the very best of us.
I’ll be free from this human predicament one day.
Death the final and greatest enemy yet to face.
“Death the final and greatest enemy yet to face”.
You have your own opinion, of course, FC. But for me death is way down the list of enemies. In fact immortality would be a tedious, never-ending repetition of the same old things over and over again. Mortality is a blessing which God gave to Man. Think about it.
DALE FERGUSON says
You’re a fool if you believe that being in the presents of Jesus Christ in heaven is tedious, never-ending repetition.
I was not referring to “Jesus Christ”. I was simply referring to the general idea of death. Death of the body is, I believe, what FB was considering the “final enemy”. So, we haven’t even gotten into the “Hereafter” at this point in the thought exercise.
And, since it is the death of the body that is our subject of consideration, I simply pointed out that an immortal body in time and space would be a hell. However, once we get into a state of being where there is no body or time or space, then we are in Eternity, and in that state there is no death, hence no “tedious repetition”.
Are you with me now Dale?
. talaat says
Immortality is the absence of temporarily, time. So “… tedious, never-ending repetition…) wouldn’t exist in Immortality where nothing decays. So you see FC knows what she’s talking about.
However, here is a Text I sent my friends today, I hope it helps all my friends on this forum.
“Dear Friends, while it seems the attack on our peace of mind is relentless with social media and the big media clowns, there is one aspect that definitely worries us and that is the Banking system. After enduring 2008, we can’t blame ourselves for feeling apprehensive.
Below is some good news. A summary of an article explaining why it is good news and the link to the full article. Please share the good news with loved ones.
“” In summary, I think what we have seen in the actions of the Fed has been to protect and grow regional banks to return America to the more traditional banking of the 50’s and 60’s. A place where a regional bank is no longer worried about international politics or having to manage currency carry trades in India. A place where a regional bank works to fund Tom’s local machine shop to buy a new piece of equipment, or helps Jim with an operational loan to get his farm seeded for this year’s harvest, and is a place where you can get a car or home loan, and have it serviced by your bank for the entire length of the loan. A place where you can invest your money, have it grow at slightly less than inflation, but never again be worried if you were going to wake up in the morning to your money being inaccessible. And if this pie in the sky view seems crazy, well then Jerome Powell, leading the Fed, just might be a patriot trying to return America to a place it used to be, not the place it’s become.””
I have posted here, a few times, that their is a war between the US FED and the City of London. I also pointed out that there are two types of US Dollars, Regulated by the Fed Onshore Dollars and Unregulated Offshore or Euro Dollars. When I say the Euro Dollar is unregulated, I mean they are loaned, deposited, loaned out again or leveraged, God only knows how many times. To cover these gambles should they go bust, they are insured by what is called Derivatives. The size of the insurance is estimated at a Quadrillion. All of it overseas. Why overseas only, because the Fed has prohibited banks from accepting Euro Dollar debt as loan collateral and this was started by JPMorgan.
Here is a fact, Silly Valley Bank was heavy into Crypto, as was FTX, which is largely Euro Dollars. The biggest five New York banks transffered out of SVB over 100 billion overnight in unison. This was a take down of SVB not a collapse.
This following video explains how the City of London operates and what are Euro Dollars.
It is aptly named the Spider’s Web.
They also follwed the esg rules and that is what broke them. Not CRYPTO.
k. talaat says
Yes ESG is Soros and Crypto is Euro Dollars, shadow banking. Research. Crypto is not Bitcoin.
As long as there’s compound interest and no Jubilees, there will be an endless stream of “predicaments.”
Nice for people whose “investment” rents get them near to or above “inflation,” but that just compounds the predicament. The entire racket needs flushing, but the renters have built the system that they now own, to their own personal benefit, and somehow or other it has become “all nice and legal, see?” And pretty much unassailable short of collapse. Which when it happens, mirabile dictu, they will somehow be “made whole” — “risk” is always socialized, while “gain” is always privatized. And we mopes are carefully taught that “there is no alternative!”
The rich want us to start eating insects. Maybe it’s time to see them as a good source of well marbled protein?
Pym of Nantucket says
Is that Tom Luongo posting as .taalat here? Honest question.
Probably not but he does have a very reasonable explantion of why UBS shareholders weren’t going to let themselves get screwed by AT1 bond holders trying to convert their junk bonds into equity, and thus control, of the merged entity.
k. talaat says
No, but I have been following geopolitics since 2005 and realized wealth transfer is the main motivator. Things didn’t make any sense until I heard from Tom Luongo that the Federal Reserve SOFR or Secured Overnight Financing Rate replaced LIBOR or London Interbank Offered Rate. Add to this the difference between US and Euro Dollars and the war between the Old European money and US Commercial banks; and you realize the US Banking system is defending itself. Once you come to that realization, seeing the battlefield becomes clear.
k. talaat says
Frederick is spot on and the US Fed was there to help.
Keep telling yourself whatever works to keep the delusion alive.
The FED does not care about you or America.
The FED acts in the interests of its owners.
And its owners want maximum control over everything.
The FED is essentially a ponzi scheme controlled by these people, who have long controlled the world through their financial system and military dominance.
This dominance is now ended and with the constantly reducing role of their financial system- they do not have the cashflow to skim off of to sustain their ponzi scheme.
And they no longer have the military dominance to force compliance.
It is the end of the “western” era of world dominance.
The debt load of the “west” cannot be serviced by the exclusively western group of countries.
The western financial system is destined for collapse.
At best they can defer the collapse for a little while longer with more money printing, but this will lead to hyperinflation first, followed by even worse collapse.
k. talaat says
Nick, try to fight the gloom and doom. What shall happen, shall happen. There is good news. The best is, that the Fed of Jekyl Island run by the old European money is no more. New thinking is required.
The Fed is run by the US Commercial Banks. They are no angels. However, they are our banks. We’ll deal with them later. A cap on charged interest might be a good place to start. Also, a way to transfer back excessive wealth from interest back to the bottom to avoid a collapse in the System.
Powell just isolated regional banks from the shenanigans of the City of London. The next step will be to set the SOFR based on each regional Fed’s financial conditions, instead of an overheated region seting a higher rate for the whole country. Another encouraging development is the movement for State Banks, which helps reduce taxes and finance charges by paying interest to state bank depositors instead of Wall Street. Just like a credit union.
As long as the Fed (a “central bank” owned by the six largest US-based commercial banks) is chartered by Congress to create currency at interest which it then loans into existence, those banks (Wall Street, if you will) will continue to dominate the politics and policies of the US government.
Money creation by the Fed is not politically neutral…
You have a number of fundamental misunderstandings of how the Federal Reserve works, what powers it has etc.
But let’s look at the most basic one: “The debt load of the West cannot be serviced by the exclusively western group of countries”.
First of all, US dollar debts owed by the US are trivially serviced: the US just has to print more dollars. Yes, this will drive up inflation and reduce every dollar’s purchasing power, but this is irrelevant.
Secondly, higher inflation itself reduces the purchasing power of the debt. So at some point, it isn’t even necessary to print more dollars as inflation will have eroded the purchasing power needed to repay.
There will be no collapse as in riots and/or Mad Max. What there will be, will be a 1970s style stagflation or, worst case, a 1990s style Lost Decade – Russia version. Japan has been doing this for decades – their Lost Decade is closer to a Lost Generation.
Gold bugs and fools still don’t understand that the Weimar hyperinflation and the more recent Latin America hyperinflations were all entirely due to debts in foreign currencies – currencies which the nations/governments in question cannot print. This does not describe the West and so the notion that a Weimar, Mexico, Brazil or Turkey style hyperinflation will occur in the West is ludicrous.
A. Dane says
1. There are two types of US Dollars:
2. Regulated Onshore Dollars and Unregulated Offshore or Euro Dollars.
3. The Fed has prohibited US banks from accepting Euro Dollar debt as collateral.
4. Silly Valley Bank and FTX was heavy into Crypto, which is largely Euro Dollars.
5. The 5 biggest New York banks withdraw over 100 billion overnight from SVB.
I have some questions for you.
1. Could you show us the difference of a US Dollar and a “Euro Dollar”?
2. Is it prohibited for China to buy up Real estate in Canada and the US with “Euro dollars”?
3. Is it prohibited for China and Russia to Buy up US Gold reserves with “Euro Dollars?”
4. Was the 100 Billion withdrawn from SVB overnight “Euro Dollars”?
5. Where did the 5 New York Banks reinvest the 100 Billion “Euro Dollars”? In Ukraine?
Here is some more baloney.
k. talaat says
Why don’t you show us some positivity and contribute one damn thing A. Dane. Start by showing what is baloney and why.
I’lI get you going, as I explained before, US Dollars or on-shore Dollars are under the Fed Rules, one of these rules is the required cash reserves.
Euro Dollars or off-shore dollars have no reserves, are highly leveraged and are simply not under Fed management.
When Dollars come from overseas, they by T-bills and enter under the Fed System.
See A. Dane, the City of London issues Dollars out of thin air just like the Fed does, it is not just the Fed.
Now be a good boy, stop watching the Hub and do your homework by watching this video, so you may be educated.
I know you didn’t watch it from earlier my post. I hope you appreciate my efforts at overcoming your lack of manliness.
A. Dane says
k. talaat says
“A. Dane, Why don’t you show us some positivity and contribute one damn thing”.
(My reply to the post below)
First there is nothing to cheer about in the current situation, and my contribution is to warn people of paid for unicorn propaganda.
Yes, when Euro Dollars come from overseas (to buy US T-bills) they become US Dollars.
Yes the City of London issues digital Dollars out of thin air just like the Fed does.
But so does Brussels’s, and Tokyo.
There is much dollars floating around out there than was ever printed by the Fed, and all those foreign printed Dollars are now returning to America. Can you say Hyperinflation in America?
If the US declines to take accept those dollars, the US dollar will crash.
Foreign mercenaries fighting in Ukraine now demands to be paid in Euro because nobody outside America trusts Dollars.
Now be a good Agent, keep your eyes on the ball instead of the Hub, on your job in Langley, and do some real homework figuring out who invented and made this Ponzi scheme possible.
You wrote, “Immortality is the absence of temporarily, time. So “… tedious, never-ending repetition…) wouldn’t exist in Immortality where nothing decays. So you see FC knows what she’s talking about”.
Read my clarification .talaat. You’ll see, I believe, that we were talking about two different things. FC was right in her context; I am right in my context.
When rates rise, the intrinsic value of bonds falls. The longer the duration, the more the value falls. Banks that have substantial holdings in Treasuries > 5 years and mortgage-backed securities have seen their asset values plummet. This asset value drop was inevitable (unless they held only short-term T-Bills). So it was predictable. Many banks could be shown to be insolvent if enough depositors pull out enough money. The Fed has two paths: fight inflation by raising rates or kick the can on the solvency issue by cutting rates. Pick your poison.
A. Dane says
This current financial crisis is created by western Central Banks to usher in a Central Bank digital currency.
The Fed has raised interest rates for the last 12 months causing many Banks like SVB to suffered losses.
The Silicon Valley Bank blew up because it was buying bonds when yields were down near 1.5%.
Their portfolio started to sustain serious damage as soon as rates were hiked to the current level.
Other banks and funds were also buying bonds as yields became positive again.
Credit Suisse is now sold off for pennies on the dollar, temporarily postponing a financial train wreck in Europe until the next shoe drops.
We may hear about these names in coming days.
Central Bank bailouts have become ubiquitous again.
The Fed dollar swap lines are once again being used, as the Fed has thrown in the towel.
As inflation is already out of control, trying to manage this crisis by more inflation will create hyperinflation.
Gold and Cash will go into an unstoppable parabolic spike upward while equities going to fall.
The global economy is now divided into two:
The Western printing-press-based Central Banks.
The Russian and Chinese BRICS alliance including India, Saudi Arabia, and many other nations.
This goes hand-in-hand with de-dollarization that is currently unfolding.
The petrodollar is now dead and China and Russia has long been hoarding gold.
The BRICS are now ready to launch their own reserve currency backed by Gold.
In addition to growing inflation, US war drums have been beating louder and louder over the past year.
A US move into Taiwan is now a real risk while the US is already in a proxy war with Russia.
The stage is thus set for the West getting into both an economic and military war with Russia and China.
What if the BRICS Nations use this new financial crisis to destroy the Western Banking system?
The timing has never been better for a perfect Storm against the West.
What has 9/11 to do with Global Finance?
During WWII many Nations deposited their Gold reserves in America, seeking to safeguard the Gold from plunder during the war. This included Nordic and European nations, but also the Imperial Gold of Russia, China, Japan, Indonesia, etc.
In 1944 the foreign Gold stash held in America was accepted by the respective Nations as collateral for a post WWII Bretton Woods Gold Standard backing the World Bank and the US Dollar.
However in 1975, Nixon took the US dollar off the Gold standard.
However, in 2000 the USA was obligated to return all the foreign Gold deposited to its respective Nations.
The foreign Gold was stashed beneath the towers of the World Trade Center, and the Gold disappeared in connection with the 9/11 attack in 2001.
Since 2001, foreign Nations have been forbidden to audit it Gold reserves in America.
Today the former location of the World Trade Center is called Ground Zero, a military expression for the center of a nuclear explosion, and the truth about the 9/11 attack including the whereabouts of the Foreign Gold deposits are classified as a question of US National security.
So who is to blame for the Western RESET?
The Fascist Western Elite has been destroying Western Finance, Production, Military, Infrastructure, Moral and Ethics from within, since the attack on the World Trade Center in NY.
k. talaat says
“This current financial crisis is created by western Central Banks to usher in a Central Bank digital currency.”
The Fed will usher a Central Digital Currency between Commercial Banks to replace SWIFT, an old technology.
There is no indication from any US commercial banks that there will be a Consumer Digital Currency.
The Federal Reserve has decoupled from Central banks under the City of London and the ECB.
At the WEF’s last meeting in Davos, VISA indicated it’s willingness to go with a DC and Mastercard said it has no plans.
See this is how you have a disagreeable conversation, you share knowledge instead of feeling that every opinion is a negation of yours. Man up fellar.
1. The other side of the coin was when interest rates fell for over 30 years, bond prices rose, giving their holders, including banks, a huge, unearned capital gain.
2. The U.S. economy is fatally attached to the Financialization of EVERYTHING. Reverse Mortgages, Derivatives ad nauseam. Stock trading, real estate. Churning and skimming paper ( or electronic) while creating and producing NOTHING of VALUE>
3. Too Big To Fail was, in reality, Too Big To Exist.
Yes, predictable and something all those ‘sophisticated’ investors should have seen. Since the majority of ‘unisured’ (accounts >$250K) were VC firms and startups one should ask the next, and this climate obvious, question: Which party do most of their political donations go to? Same as with FTX. This action just collapsed another donation washing machine for a particular party, and a few of its uniparty friends. Signature was another lender to the crypto currency sector, so three down. No wonder they are squealing loudly.
If anyone is actually interested in what the Fed is doing, read their actual policy:
If you don’t buy the bonds from the dates listed you can’t use them as collateral – so mark to market and eat the loss. If you aren’t a US charted bank you can’t use them at the FED either, so good luck! I think Janet Yellen got forced to swallow this with the ‘cover all depositors (i.e. the firms that got the millions in free Covid money for a couple of years, which they dumpted into SVB) being the sugar coating on given Powell what he wanted.
Take a look at Credit Suisse and who got shafted there. Europe’s rules and protections are different, but I think “WEF” took a loss there.
k. talaat says
Sentinent.. please read this 10 minute article it shows how the Fed secured or regional banks and hence local banks by plugging the wholes in their balance sheets.
Banks were bailed out in 2008 not because it was good for economy, but because they were fighting against cash at that point (back then, credit/debit cards were slowly creeping in all pores of society, as a precursor to electronic currency), and if they would let banks fail, people would lose money and no-one sane would keep money in anything but cash, gold and similar which would set their electronic currency goals decades behind, maybe even permanently destroy them.
Simply put, if majority of your economy is using cash you cannot convert your economy to electronic currency since a lot of people would be against it, and forcing majority of people to do something they don’t want to is very hard.
However, if only few percent is in cash, you can easily enforce the change since its mostly done deal anyway, and few holdouts can be easily suppressed if needed.
With that said, share of people that are using banking services against the cash for everyday activities is now probably 90% or likely even higher, therefore they can afford to lose some banks (especially small ones that they don’t control) in order to regroup money into big banks, that can later easily be used to convert existing money pool into electronic currency.
However, in both cases, they do not care about economy itself, since by far the most important thing is to ensure control of the society through electronic currency, and far lower on priority ladder is well-being of the people or economy itself.
E.J. Mohr says
I like the problem vs predicament line. We are definitely in a predicament since the insane amounts of money that MMT fans have told us are harmless have now become a potential millstone around the neck. I just discovered that in 2020 the reserve requirements for banks was lowered to zero. In other words regulated banks in a fractional reserve system are required to keep a certain percentage of cash deposits on hand in case people want cash, but if what I read is correct, that percentage was allowed to drop to nil. That seems incredibly risky to say the least.
Bill Osborne Jr says
A maximum suckage event is heading our way.
Curt Nichols says
Larry obviously lives in my head. He keeps stating my biggest concerns.
1) 32 Trillion in debt. A trillion for the Pentagon this year NOT counting Ukraine
2) What does the budget do if that 32 Trillion is financed at 4% instead of the 1% we have had for the last two decades?
3) A fictitious GDP underlying the debt. We quit “marking to market” in 2008. The bank portfolios are worthless paper.
4) Speaking of Zombies? 30% of US companies only survive with ZERO interest rates and government subsidies.
5) The Boomers are retiring. They are spending and not saving. And they are expensive. A lot of health care. A lot of Social Security and Medicare. I guess the plan was to kill them with the vaccine. We’ll see if it works.
6) None of the kids want to work. It does not matter what you pay them. The Boomers let the little fucks move back in, and they will couch surf till Daddy’s money runs out.
7) An education system that is primarily focused on teaching boys to chop their dicks off instead of math or any usable skills.
Here is my Don Corleone analysis. He goes to the local numbers running room. He asks for a count. They pull the books out. I don’t want to see the books. I want to see the cash. Cue incipient gunfire. That is the USA. If we actually stopped? And counted the money? We are a dead man walking.
Mark J says
The US federal currency must continually expand it’s base. The two methods are economic growth and debt expansion. Limits of the earth have brought us to the second.
The US dollar is not money. The US dollar is currency. Most don’t understand that basic point.
The secrets of money series:
The United States as defaulted twice so far… once in 1985…bailed out by JP Morgan, and the second time was Nixon closing the gold window as the US could not pay for the Vietnam War debts…in gold. Nixon printed the debt away.
Kissenger’s trip to visit the Saudies… “let me make you an offer you can’t refuse”. You guys trade oil transactions via the SWIFT US dollar system…or ….maybe we kill you all and occupy your oil fields. This pegged the currency to oil raw material… the “Petro Dollar” was born.
The biggest news is not really the bank failures. The big news is Iraq and the Saudies making peace in banking…. along with China, India and Russia. All gold culture, all either manufacturers or raw material producers. When two Islamic factions can put aside the differences..to escape SWIFT… “the times…they are a ‘change’n”
After about the third round of shooters with a beer back…. folks say the skim at Ukraine is about ~30%. Just a bunch of local drunks… what do they know?
Arguably the Federal Gov’t defaulted 3 times in last 100 years –
1934 – gold confiscation
1971 – closing of Gold Window
1985 – Plaza Accord
I believe you had a typo there Mark.
Didn’t you mean 1895?
Mark J says
Yes…typo…. my hands are pretty worn out. The Plaza Accord that Exile cites… is also considered by many to be a US govt default. +
I always appreciate adult supervision… and run a muck without same. Thank you.
Here is a pretty good general over view by Dr. Chris Martinsen… observing the puzzle we all have a piece of:
There are generally ..the 3 methods of currency collapse reconciliation:
3] they take you to war.
I would debate..that we are seeing all three central bank/central govt methods in play right now.
The collapse is the cure. We can delay it somewhat, but not wish it away. And it is long overdue and necessary. The deadweight must be purged. It has always been thus.
Old Toad says
Fiat money requires discipline, we have none.
No border, no country.
I have faith in God, nothing else.
Wizard Glick says
To put things into perspective,
1,000,000 seconds (1 million) seconds is 11.57 days
1,000,000,000 seconds (1 billion) seconds is 31.71 years
1,000,000,000,000 seconds (1 trillion) is 31,709.79 years
you need to add ‘quadrillion’ to your vocabulary!
Egon von Geyerz estimates global derivatives to total $2 quadrillion, add to that global liabilities of $500 trillion and you come out with the modest sum of $2.5 quadrillion of debt,
this all has to be serviced by a global economy turning over $85 trillion annually as GDP,
it’s a bit like running a business with an $85k turnover and $2.5 million in outstanding loans,
Breaking News: The Galactic Bank today declared Planet Earth insolvent and has appointed administrators from Mars to oversee the winding up and sale of Planet Earth.
we asked the adminstrators from Mars for a comment: “*beep… We Come in Peace, *beep… Take me to your Chief Financial Officer, *beep…”
it is rumored that a private equity fund from Alpha Centuri has made an offer of 1 Galactic Groat to take over Planet Earth if it shoulders the debts that comes with the takeover.
it’s long term plan is to demolish Planet Earth to clear space for a Galactic Hyperspace Freeway,
when asked, Galactic President Zaphod Beeblebrox declined to comment on the ongoing situation.
we approached Gag Halfrunt, a private psychologist specialising in sentient life, of Planet Earth he said; Humans, they’re just these guys you know!”
Like a drowning men, one may push the other under to stay afloat a bit longer. Perhaps that is the mechanism of our current situation. If we push the rest of the West under with our financial policy we will keep our head above water a few months longer as what is left of their economies comes to us. We will still slip under the waves.
Bob Bishop says
k. talaat says
If we cut our billion dollar military budget by 50%, bring back the soldiers from 400 overseas bases to protect our border, get our homeless housed, our sick and addicted treated, our youth educated in math and sciense, put our best people in every field to sole problems, just ignore Woke and Feminism, outlaw Lobying, etc. we can turn this country around in 10 years and get up to speed in an other ten.
The choice is between two things. Self worship or a belief in something greater than one’s self. American’s haven’t made a clear choice yet.
Tell me, since when did “average American citizens” have a say in anything their government decides upon?
I’d be perfectly happy to cut the trillion dollar war budget by 80 to 90 percent and close 99 percent of all overseas bases… and so would a majority of Americans, I’ll wager.
But that’s not going to happen because Wall Street commands monetary policy and thereby dominates electoral politics and national policy. Who do you think promotes wokeism, racism and all other divisive social policies?
You are defending the Fed and Wall Street… why?
I think that the next time the Fed has a bank go belly up, and it has to get the TBTF (too-big-to-fail) banks to swallow it up, the Fed could offer them a BOGO sale.
If they buy one (like First Republic) it’ll throw in another one for free (like Signature or something). I think BOGO is the way to go. It seems to work at Walmart.
And as for those depositors, it could offer them a free sandwich and a can of coke, and a free bus ride to the casino.
Yes, there is a “realistic” solution, and it will be one of two things. Direct, deflationary default, or a slow-death inflationary default. Will the solution be one we like, or even can tolerate? No.
We are in the end stages of a system designed to transfer wealth to the few, and they now have almost all of it. It’s like a game of Monopoly when one person has all the money and property. The game is over. They’re trying to figure out ways of at least pretending the game is still on, but it’s over. I think the main concern for the elites is how they maintain their position when we all decide we’ve had enough of them. And that’s been where their efforts have been over the last few years, conjuring up ways to control us using psychological operations to generate fear, and also to get us at each other’s throats instead of focusing on them.
They are zero sum thinkers, and believe they can’t get more without us getting less. In China, the view is to lift the bottom and middle, thus making the top richer. That’s a more Machiavellian approach as they keep it in the best interests of the majority to support the top. Like everything else, they think it through more systematically than the reductionist types here do.
So yes, there are solutions, none of them pretty, and any semblance of restoration of freedom and democracy will come at a very dear price as the elites are in their last ditch effort to take over all of it in the WEF version of the “Great Reset.” And, the “elite” is not one tight-knit, united group either, as we’re seeing splintering there too.
What happens next will be determined on whether those that want the dollar have enough power, in which case it’ll be letting the banks fail while fighting inflation with higher rates. The WEF types favor the inflationary spiral, moving to guaranteed income and complete control of our lives, where we own nothing and are supposedly happy.
And they can’t deliver on anything as we don’t have the production capacity to support it, and we can’t keep buying Chinese goods on credit with nothing to back it up. The Davos crowd hasn’t a clue as to how to make their system sustainable in any way, shape or form. Meanwhile the rest of the world is happy to watch the west sink. The idiots like Claus Schwab are destroying us and effectively cutting the rest of the world free. And he’s stupid enough to think somehow he’ll be in charge when the smoke clears. Delusional.
“DOES A REALISTIC SOLUTION TO THE BANKING CRISIS EXIST?”
Perhaps it would be more illumination to focus on the blat quotient rather than the insurance ratio?
Francisco Viñuela says
Yes, Thanks Larry
that’s the right point…
I would add…little words of awe for the system…
Swift, it mean moving or capable of moving with great speed, also some common synonyms of swift are expeditious, fast, fleet, hasty, quick, rapid, and speedy…
Let’s be clear, the Western banking system is still based on the acronym Swift…
but abruptly something or someone interrupt the good order of things, or something is stuck in the ‘wheel of fortune’ and abruptly, everything stops…
Hello Huston ? we have a problem !
But then it is Marie Antoinette ‘Answering Services’ in the European Union who take the call :
– What ? the peasants have no bread ? let them eat cake !!! –
What boggles my mind is if we are spending a trillion dollars a year for defense–where is that money going? I mean is it going for old equipment we have on hand–aircraft carriers, M1 tanks, F35s, ect.? Why are we depleting our stockpiles of weapons so fast. What happened to all the weapons we accumulated for decades? What have we spent all that money for? Pensions? Propaganda? Iraq and Afghanistan are just little firecrackers compared to Vietnam, Korea, WW2, and Cold War 1. Our MIC is just a giant sucking corrupt black hole.
REAL SOLUTION will kill the patient…..entire WEST been living in some form of illusory fiction since 2008…..BRICS are simply hitching a ride on this Fairy Tale and have taken steps to jump off this runaway train when the right time strikes….
Vallhalla Rising says
The collapse of the Hegemon fiat currency (USD) will happen–in fact it should have happened already. A multipolar world order cannot happen without the USD collapse…what do you suppose Xi and Putin were planning recently?
I am not cheering the impending financial collapse–it may ruin me as my entire income is federal pensions (Military and Social Security). Nonetheless if the USD collapse acts as a catalyst to the end of neocon rule, then I’ll just deal with the economic ass pain as I gleefully throw fuel on the fire.
The sole purpose of banks is to match Savers with Borrowers. This activity traditionally was ~5% of the economy. Today, finance is ~20% of economy.
The banking sector should massively shrink
”A steep drop in rates to near zero erases the banking system’s unrealized losses ($700 billion) on long-duration investments.” This is the key sentence because it also slows the unwinding of trillions of $ of derivatives which will take down the too big to fail banks IF they fail to match the interest rates offered by US Treasury Bills (currently 0.2% v almost 5%). Our inflation is caused by a combination of energy & food supply shortages and over issuing of money by the FED. Increasing the supply of food and energy massively to lower prices while paying people fair wages so that they dont need to consume savings which should be paid competitive rates of interest is the way to go while inflating away the value of existing debt which cannot be paid off without a period of inflation in the 10- 25% range.
The trick is not to have hyper inflation – the FED will be the only buyer of US Treasuries going forward because the only other buyers in 2023 are customers of US banks like SVB.
Christian Chuba says
1. The $250k insurance limit should only be increased for corporate, not individual, bank accounts. Corporations have to pay vendors and meet payroll and even then, I would cap it at something like $10M, not make it unlimited.
2. Require banks to keep more reserves in short term treasury notes, you can buy T-bills with durations as short as 3 mo’s, you don’t HAVE to buy 30yr T-bills. It is the longer term T-Bills that are most sensitive to interest rate hikes.
#1 is so obvious to me that I find it distressing that the heavy hitters in DC haven’t even mentioned it.
What might the current change of the conditions for 5 celestial signs force on the architecture
of worldwide fraud called banks?
The foreground is marked by the finally visible truth of Russian ingenium on the battlefield
of diplomacy and explosives. It is the bejesus, long overdue, Russia provides for the
arrogant agents of monetary and psycholgy piracy, and their ‘garden’ of lies.
And wow, the locomotive of history this week is taking staem!
Compare: the weekly run of the symbols of the solar family around the sky of Earth and
the things, man does:
12. Week: “Operation at the Social Gestalt – Pluto in Aquarius- Revolution Redux
Proof-read your stuff.
bob sykes says
Just asking for a friend, How did WW II start?
The only meaningful “solution” to this current banking crisis involves three measures that will never get implemented:
A) Enforcement of the current laws on the books down to their very letter. The laws that are currently on the books are sufficient to prosecute the people responsible for this: revolving-door officials who have been carefully groomed and emplaced by the Corporate Oligarchy into their positions of power to corrupt and distort their responsibilities for regulation and enforcement “in the name of the people”, a phrase that means “you and me and the vast waves of indigent poor who are politically alienated and incapable of organizing themselves to behave as a proper democracy”.
B) “Enforcement” would also entail proper *prosecution*–which means significant jail time in high-security facilities (which should have just-as-abundantly applied solitary confinement for any violations by the convicted)–for the regulators who were responsible for violating “the letter of the law” (which many, many of them did) and allowing it to happen. We have seen poor young black men incarcerated **FOR LIFE** for…stealing a candybar, sharing sexy-pics with their girlfriends, or drinking a beer because of this “three strikes, you’re out!” nonsense.
In the last 30 years of US history, literally *NONE* of the people responsible for instigating illegal wars based on government lies have been fired; they’ve been promoted. We have gotten a few Celebrity Cases–one where a Preznit was prosecuted for getting a blowjob from a consensual girl. Almost literally *NONE* of the people responsible for creating (and *SUSTAINING*!) the 2008 crash have been prosecuted, much less convicted–instead, they got bonuses, and most remain in power.
In China, if you get convicted of corruption like that you get a bullet in the head. I’m not advocating that, but, hey: in the current environment of US political corruption, it honestly does seem preferable. It’s a profound imbalance in justice and if history has proven anything it’s that, in the face of sustained oppression, justice will erupt–usually in the form of Guillotines, Oliver Cromwell, or other Civil Wars.
Why in God’s name do we not see the same judicial severity with these top-level political criminals?
One word: corruption. Two words? Corporate corruption. Three words?
Oligarchical corporate corruption.
C) Reform of the current pay-to-play political system which was cemented–but not started–by the “conservative” Supreme Court decision on Citizens United, coupled with sweeping legislative changes in the current electoral system (foremost of which should be elimination of E-voting machines which don’t provide a paper receipt for verification and recount). Getting the banking/financial institutions ineradicably separate from the institutions of government should be first and foremost of any and all legal reforms.
But how many political groups have actually been organized around these ideas? Online groups? SEEKRIT groups?
Well, only the NSA knows about that last bit. But yes: we are currently in a political state where, unless some sort of “cross-aisle”, anti-Conservative/anti-Liberal (and/or “anti-Proudboy/anti-#Woke”) movement is built (and I do mean “built”–not “coalesces”), then most of us will continue to devolve into internecine bickering rats killing one another in increasingly smaller groups, with “landed gentry” shooting the Dickensian “street-rats” off the walls of barricaded shelters where the lawns are tended with delicate consideration.
There are enough resources on our planet to sustain the current demographic trends indefinitely into the future.
The problem is our political relationships and economic perspective.
I strongly urge people to look up the etymology of the word “commune”, here:
Read it in detail, both up and down.
Pym of Nantucket says
The third condition is key. Why must the US have such a weird system compared to other “democratic” countries? They act like campaign donation rules are a law of nature but everywhere else it is regulated. Only individuals should donate and only up to a few grand each.
We have a new definition for “perverse.” The Fed raises rates to fight inflation, while introducing a new version of QE to save the banks, in turn causing more inflation, requiring higher interest rates to fight inflation. What could go wrong with this strategy?
And what of the commercial, state and local bonds? Well, budget busting time there, as nobody will buy them unless they can get a decent interest rate relative to inflation. Meanwhile Federal government bonds will be at artificially low interest rates with the Fed buying them and adding them to its already bankrupt balance sheet.
It all reminds me of the farm growing up. Over winter we piled up chicken shit, hog manure and cow manure in a big pile to be spread out on the field later in the spring. Here we’re seeing a bigger pile of shit growing exponentially, supposedly to be spread around later (remember all the toxic assets from 2008 on the Fed balance sheet that they were going to sell off?). The trouble is there won’t be any “later” as the Catch-22 is you can’t get there from here. Just a mountain of shit, growing exponentially while the inflation tiger has been unleashed. Oh, and the interest rate policy, surprise, surprise, will rub out the remaining small businesses that the COVID restrictions didn’t get, because the small banks are the ones that finance small business.
WEF dreams come true. I wonder when/if the neocons push back to save their precious dollar that they need for their world conquest dreams. If it gets down to the WEF versus the neocons, my money’s on the guys with the guns.
Alex Thrace says
The interesting thing about the FDIC’s “reserve fund” There is no money, they reserve is invested[sic] in US Treasuries. That means the money went to the Feral Government and got spent.
In order to cash in the treasuries the government needs to BORROW money to pay the redemption.
Does a realistic solution to the banking crisis exist?
Curt Nichols says
I mentioned this in my earlier post. It’s really simple. If we keep interest rates up to bust inflation? The federal budget explodes.
If we cut interest rates to save the Federal budget? Inflation turns into a firestorm.
Pick your poison.
Re the current banking, debt and all related issues .. highly recommend reading all the posts by Martin Armstrong [which I have done for many years] as well as more in depth explanations available by taking out the $15 monthly fee [which I have done] for the basic version of his Socrates ‘private-label’ website [more advanced Socrates versions also available for higher fees; I only have the very basic version]
Warren Buffet said it best: “You never know who has been swimming naked until the tide goes out.” Don’t look now but the tide is going out. It’s not really a tide; it just looks like one. It’s actually what the water does right before the tsunami hits. Just auction off some more fictitious treasury bonds. It’s just pressing buttons on a computer screen. It’s all electronic gold painted on a bar of tungsten, just like what is in Fort Knox or anywhere else “they” claim we have gold stored. We have already lost more than 98% of the dollar’s purchasing power since 1913. May as well keep “printing.”
I watched the video about Colonel McGregor Paul posted on another article. I agree with him: The next 45-90 days is going to start a very dangerous and hard time in this country that will last for many years. After the banks fail, the dollar crashes and the federal government collapses we will learn, hopefully in detail, how rotten to the core this country really is. Then maybe the people who survive can rid this stench to where it never occurs again.
Mike D. says
I wonder if our system of government is capable of fixing the level of corruption
we have. The democrats and rinos at the highest levels are filled with lawyers who never stop-they are like the terminator and stay on subject to maintain and obtain greater power. Even a relentless leader may not be able to fix this. Another similar challenge was resolved at Nuremberg.
Now we see a tug of war between Powell, generally aligned with the strong dollar/neocon crowd, and Yellen, who lines up with Davos/WEF. Powell had the situation stabilized, then Yellen spouted off sending markets into a tailspin.
Elites at odds won’t be good for markets either. Cash is king, silver and gold (precious metals) emperor. The commodity complex likely good too, as there’s a serious shortage of physical nickel, problems appearing with the “paper” that isn’t backed by production. Gold stocks are being drawn down too as more are taking physical as settlement rather than paper/cash.
Frank Z says
There are back stories here that should be more widely disseminated and discussed.
The West is in an undeclared war upon itself and I do believe it is wining!
To answer Larry’s question, yes there is a solution, however.
That solution is found within Russia and China and requires their participation.
I would not bet a lot of money on that choice being taken by Washington.
The made in the USA answer is going to sting for a lot of folks.
i found these short clips interesting
Banks are bailing out and buying each other up. Here is why that is BS in just 16 seconds
there is a prophesy about people throwing their gold and silver into the streets since it is worthless. Keep in mind that back then they did not have paper and digital money .Gold and silver were the currency back then unlike today when it is digital paper money. also that this prophesy may have already occurred because during the weinmar republic in germany the money was so worthless the smaller notes were used to help heat the home with.
The purchasing power of gold and silver vs. a Dollar Bill – This will blow your mind
Hereunder a comment and interview of dr Paul Craig Roberts, former assistant treasurer in the Reagan administration.
Paul Roberts gives an excellent view of what is structurally wrong with the US bank system. Thus causing the 2007-2008 crisis and the current, albeit slow developing, bank crisis.
ALLOT OF good info here- become your own central bank. the one we have know in my opinion wants to steal everything we have
The FDIC has no reserves, just like the Social Security Trust fund has no reserves. As soon as they get it, they spend it. There is an IOU there. It’s called an intergovermental loan. Just another accounting gimmick to fool the rubes.
The Lizard of Oz says
Insurance works when (Total Premiums + Investment Income) – (Total Claims + Operating Costs) > 0.
Insurance companies spend a lot of time analyzing the data, to understand the rates of paying out claims. Insurance works when only a small percentage of the policies make a claim. If all policy holders make a claim, the insurance company goes bust.
Schemes like the FDIC can work if funded, to cover at most a couple of small dud banks a year. These schemes cannot cope with a systemic problem where all banks are facing losses for the same reasons.
Sooner or later, even the Magic Money Tree runs out of fruit for the picking. The problem is this year’s bonds paying higher interest rates make last year’s, and all prior years with lower interest rates worth less (yes, two words, not quite worthless).
Lots of banks have lots of older bonds on the books that cannot be sold for their face value. And this, makes their balance sheets an imbalance sheet. Fractional reserve banking leverages the amount they have to cut back.
Our financial system is like a giant balloon full of holes, and no amount of huffing and puffing by the three J’s will keep it inflated for long.
The Fed has literally infinite power to rescue the US banking system – and the ECB has the same for the EU banking system.
2008 was orders of magnitude greater than what has happened so far.
It is delusional to think that the mere $650 billion (or so) of unrealized losses held by US banks cannot be papered over if the Fed desires. The Fed purchased well over $1 trillion of new debt in 2008, for example: https://fred.stlouisfed.org/series/WALCL
What we are seeing right now is very simple: JPow wants to be the Volcker of this generation – the slayer of inflation.
Inflation was 6.0% in February 2023 – which also marked the 23rd month in a row in which Average Real Earnings were negative. Or in other words – regular Americans literally lost purchasing power every month for almost 2 years in a row.
So inflation is still bad, and JPow still wants to fight it.
The banks don’t like it, the majority of corporations who have to roll over their massive new ZIRP era corporate debt don’t like it, the crypto don’t like it, the Dems don’t like it, pretty much nobody in power likes it but that’s what is going on.
Zoltan Pozsar has been saying since June 2022 that this was going to happen: the Fed would attempt to fight inflation with the only tool it knows how to use.
Unsurprisingly, more Democrats are calling for JPow to be ejected.
My own view, based on Pozsar and others, is that the West is in for structurally higher inflation for the foreseeable future. JPow is going to fail both because of political attacks but also because the Fed simply doesn’t have the tools to fight this structural inflation.
Taking JPow out will only exacerbate the already bad inflation situation, but leaving him in won’t fix it either.