Three large banks failed in a single
week in March 2023, and the ripple effect could easily take down the
entire banking system, although government officials insist the banking
sector "remains strong" and that the problems faced by these banks "do
not appear to be widespread."1
Cascading Domino of Bank Failures
The cascading bank failures began March 8 with the shut down and liquidation of the crypto bank Silvergate Capital.2 As reported by Government Executive:3
"During 2022, Silvergate's deposit base grew
dramatically, almost doubling its assets to $210 billion. But the bank
did not have either the administrative capacity or market demand to lend
out all of the money, as banks normally do.
So, it invested the excess deposits in Treasury bonds
and mortgage investment products. But the bond purchases became a
problem as the Federal Reserve began to raise interest rates to address
inflation."
Two days later, March 10, Silicon Valley Bank (SVB) — the 16th largest bank in the U.S.4
— failed. It too was invested in government bonds, which again became a
problem when customers began making large fear-based withdrawals. This
was the second largest bank failure in U.S. history, and the largest
since the financial crisis in 2008.
Allegedly "spooked" by the failure of Silicon Valley Bank, Signature
Bank customers then withdrew more than $10 billion, resulting in the
shutdown of Signature Bank on March 12, making it the third-largest bank
failure in history.5,6
The Federal Deposit Insurance Corp.
(FDIC) took control of Silicon Valley Bank and Signature, and government
regulators have promised to make all customers "whole" by insuring all
funds, not just the first $250,000. In other words, government is
bailing out the banking system yet again, on the taxpayers' dime.
Within a week, Signature was bought up by Flagstar Bank, a subsidiary
of New York Community Bancorp (one of the largest banks in the U.S.).7
According to the FDIC, anyone who had deposits at Signature Bank will
automatically become a client of Flagstar Bank, except for crypto
banking clients, as Signature's digital banking business was not
included in Flagstar's bid.8
The FDIC is also left holding $11 billion-worth of "toxic waste debt"
in the form of commercial real estate loans for rent-regulated
buildings, as this debt portfolio was also rejected by Flagstar.9 The FDIC is still looking for a buyer for Silicon Valley Bank.
Is the US Banking System Really Sound?
President Joe Biden's comments shortly after the three bank failures
was that "Americans can have confidence that the banking system is safe"
and that "Your deposits will be there when you need them." Treasury
Secretary Janet Yellen also insists the U.S. banking system "remains
sound."10
Should we believe them? Probably not. Within days of those
statements, the contagion had already spread to Credit Suisse, the
largest bank in Switzerland. After government initially stepped in to
cover some of the losses, the Swiss banking giant was sold to the UBS
Group.11 The acquisition was announced March 19.
It's hard to believe the ripple effects of bank failures of this
magnitude can really be stopped. The question is, should we even try? As
reported by Government Executive,12 government has no obligation to step in and bail these banks out under current banking regulations.
What's more, the biased bailout system now being put into place will
virtually guarantee further bank consolidations and the widespread
rollout of a central bank digital currency (CBDC). As reported by
Newsweek March 16, 2023:13
"During a Senate Finance Committee hearing, Yellen
was grilled by Oklahoma GOP Senator James Lankford over the Biden
administration's handling of the banking crisis, which saw the federal
government offer a multibillion-dollar bailout to Silicon Valley Bank
(SVB) after a bank run left it without enough cash to back up hundreds
of millions of dollars of its clients' deposits. Most of those deposits
were not insured.
To address the crisis, U.S. bank regulators announced
a plan last weekend to fully insure all deposits at SVB as well as the
crypto-friendly Signature Bank.
This would cover all deposits above the Federal
Deposit Insurance Corp.'s insured limit of $250,000. Federal officials
said the plan would be paid for by a special fee levied on all FDIC
institutions.
While all banks would be required to pay for the
plan, Yellen said under questioning Thursday that it would not apply to
every bank. She said the federal government would extend the privilege
only to troubled banks whose failure would have a profound impact on the
U.S. financial system.
Uninsured deposits, Yellen said, would be covered
only if a 'failure to protect uninsured depositors would create systemic
risk and significant economic and financial consequences,' which would
be decided by a supermajority of the FDIC's board members, Yellen, and
the President …
In further questioning, Lankford asked Yellen whether
that policy's implication would be that small banks would become less
appealing to depositors with accounts exceeding the FDIC's $250,000
insurance threshold …
Amid the sharp increase in bank mergers over the past
decade, Lankford expressed concern that the trend could only accelerate
under current policy, causing the U.S. banking system to become less
resilient.
"I'm concerned you're … encouraging anyone who has a
large deposit at a community bank to [hear], 'We're not going to make
you whole, but if you go to one of our preferred banks, we will make you
whole,'" Lankford told Yellen. Yellen replied, 'That's certainly not
something that we're encouraging.'"
And yet that's exactly what this policy will be encouraging. Actions
speak louder than words, and in this case, the outcome of this policy is
quite clear, regardless of what Yellen is saying.
To recap, the FDIC will only insure deposits up to $250,000 if your
money is in a small bank, but if your money is in a big bank, uninsured
deposits over that amount will be covered as well, should the bank fail.
Why Bank Crashes Will Facilitate CBDC Rollout
Adding insult to injury, while the system is clearly biased and won't
protect everyone, all banks (and hence account holders) will be forced
to pay this "special fee" to the FDIC that will, supposedly, insure all
these uninsured deposits at preferred banks.
The most likely outcome of this bailout system is a consolidation of
banks until we're left with just a small number of mega-banks. We're
already starting to see the early phases of this, with "the big three" —
Bank of America, Citigroup and Wells Fargo — reporting14
a deposit spike in the wake of the SVB collapse and Yellen's
announcement that only certain preferred banks will be covered above
FDIC insurance limits.
This consolidation, in turn, will facilitate the rollout of a central
bank digital currency (CBDC), as the banking industry will be a very
tight-knit monopoly. Let's say there are only half a dozen banks in all
of America. All they have to do is make the switch to CBDC as a group,
and anyone with a bank account in America will be automatically trapped
in the new system. As reported by News Punch:15
"What we are seeing is a push towards Global
Government that is being camouflaged and cloaked in humanitarianism,
multiculturalism, as well as manufactured threats such as global warming
and pandemics in order to condition the population into accepting
globalization and a One World Government.
In order for this to occur the elite are planning to
create a global financial crisis the likes of which the world has never
seen. Out of the ashes of this financial crisis will rise the phoenix of
is a New International Economic Order. The public will be told that the
new order is the only way to stabilize the world economy and save what
little remains of their wealth …
People often ask why the globalist elite would
collapse the world economy. Wouldn't that mean they destroy their own
wealth in the process? The answer is no. The elite have been
consolidating their wealth in order to protect it for centuries … When
the world financial system finally crashes the elite will be positioned
to buy what's left for pennies on the dollar.
Where does this leave the rest of the world
financially? The answer is in bondage to a Techno-Communist World
Governmental System led by the World Economic Forum in Davos and the
hidden hands that control the public face of that cabal. If you pay
attention now you can see that everything around you is being engineered
towards this one goal …
The globalist elite are also forcing their vassal
states to move towards centralizing currency in the form of a … CBDC,
which by the way, is not currency at all – it is software designed as a
tool of total social control … If they can cancel out your bank balance
with a single keystroke, then you have no freedom, no autonomy. You are a
slave …"
UCC Code Update Is Stealth Attempt to Steal Our Freedom
The fact that CBDCs are intended as financial shackles to control you within what amounts to an open-air prison is also noted by South Dakota Gov. Kristi Noem16 in the Fox News interview above.
She highlights a proposed Uniform Commercial Code (UCC) update that
seeks to redefine "currency" to exclude decentralized crypto currencies,
effectively putting the government on the path to a CBDC monopoly. Noem
vetoed the bill and is urging other states to reject it as well.
The UCC Code is a set of laws that govern commercial transactions in
the U.S. While not a federal law, it's a set of laws that states agree
to adopt in a uniform fashion to facilitate interstate business. So, it
appears they intend to begin the financial takeover by rolling out the
CBDC on the state level first, and legislators who believe in freedom
must denounce all such plans.
Government Bonds Are Now the 'Toxic Asset'
According to News Punch,17
the destruction of Silicon Valley Bank was intentional. While I cannot
vouch for that, it's interesting to note that SVB was in relatively good
shape before it went kaput overnight.
As explained by the Sovereign Research and Advisory Group in an article titled "If SVB Is Insolvent, So Is Everyone Else,"18
the 2008 banking crash occurred because Lehman Brothers and other banks
had used depositors' money to buy extremely risky no-money-down
mortgage bonds.
While the economy was good, banks earned hefty profits from these
toxic assets, but as soon as the economy downshifted, these toxic
securities plunged in value and wiped them out.
This time, however, the toxic asset is not mortgages obtained by
people with no job, income or history of paying their bills. No, this
time, it's U.S. government bonds that are sinking banks, and these bonds
are supposed to be the safest investment there is. Sovereign Research
and Advisory Group writes:19
"Silicon Valley Bank was no Lehman Brothers. Whereas
Lehman bet almost ALL of its balance sheet on those risky mortgage
bonds, SVB actually had a surprisingly conservative balance sheet.
According to the bank's annual financial statements
from December 31 of last year, SVB had $173 billion in customer
deposits, yet "only" $74 billion in loans. I know this sounds
ridiculous, but banks typically loan out MOST of their depositors'
money.
Wells Fargo, for example, recently reported $1.38
trillion in deposits. $955 billion of that is loaned out. That means
Wells Fargo has made loans with nearly 70% of its customer's money,
while SVB had a more conservative 'loan-to-deposit ratio' of roughly
42%.
Point is, SVB did not fail because they were making a
bunch of high-risk NINJA loans. Far from it. SVB failed because they
parked the majority of their depositors' money ($119.9 billion) in US
GOVERNMENT BONDS. This is the really extraordinary part of this drama.
US government bonds are supposed to be the safest,
most 'risk free' asset in the world. But that's totally untrue, because
even government bonds can lose value. And that's exactly what happened.
Most of SVB's portfolio was in long-term government
bonds, like 10-year Treasury notes. And these have been extremely
volatile. In March 2020, for example, interest rates were so low that
the Treasury Department sold some 10-year Treasury notes at yields as
low as 0.08%.
But interest rates have increased so much since then;
last week the 10-year Treasury yield was more than 4%. And this is an
enormous difference.
If you're not terribly familiar with the bond market,
one of the most important things to understand is that bonds lose value
as interest rates rise. And this is what happened to Silicon Valley
Bank.
SVB loaded up on long-term government bonds when
interest rates were much lower; the average weighted yield in their bond
portfolio, in fact, was just 1.78%. But interest rates have been rising
rapidly. The same bonds that SVB bought 2-3 years ago at 1.78% now
yield between 3.5% and 5%, meaning that SVB was sitting on steep
losses."
All Banks, Including the Fed, Are Likely Insolvent
According to the SVB's 2022 annual report published January 19, 2023,
they had $16 billion in capital and $15 billion in unrealized losses on
their government bonds. So, they were ripe for a wipeout.20
The problem is, if SVB, with its conservative loan-to-deposit ratio
ended up insolvent due to government bonds tanking, then that likely
means that everyone else is insolvent as well, including state and local
governments, large corporations of all kinds, and the Federal Reserve.
Anyone holding government bonds is sitting on huge losses as interest
rates rise.
According to FDIC estimates, the unrealized losses of U.S. banks is
approximately $650 billion and rising. Meanwhile, the FDIC's deposit
insurance fund (DIF), the fund that's supposed to cover insured deposits
(accounts up to $250,000), has a balance of just $128 billion.21
See the problem? What's worse, the DIF money doesn't just sit there. It
too is invested — in U.S. government bonds! As noted by the Sovereign
Research and Advisory Group:22
"So even the FDIC is suffering unrealized losses in
its insurance fund, which is supposed to bail out banks that fail from
their unrealized losses. You can't make this stuff up, it's ridiculous!"
And it's only going to get worse if the Federal Reserve continues to
increase interest rates. The problem is, interest rates need to be
raised to curtail runaway inflation, but if they go up, more banks will
sink due to their holdings in government bonds.23,24 There's just no way out.
Add to this insurmountable problem the fact that President Biden's
2024 budget will raise the federal debt to $50.7 trillion by the end of
2033. It's currently $31.459 trillion.25 That's a staggering amount of debt.
From a household perspective, you have no choice but to file for
bankruptcy once your income cannot even cover the interest payment on
your debt, and that's basically where we are on a national level. As
noted by The Balance:26
"Most creditors don't worry about a nation's debt,
also known as 'sovereign debt,' until it's more than 77% of gross
domestic product (GDP). That's the point at which added debt cuts into
annual economic growth, according to the World Bank. At the end of the
second quarter of 2021, the U.S. debt-to-GDP ratio was 125%. That's much
higher than the tipping point …"
Are You Prepared?
All of this is why it's so important to prepare and become as
independent as possible. The things we've taken for granted our entire
lives may soon vanish, and what's coming to replace them are not in your
best interest unless you're part of the globalist cabal that will
exempt themselves from the slave system.
Becoming more resilient in the face of these changes could include
moving cash into things that have a greater chance of withstanding
inflation, such as precious metals (the actual metals, not the paper)
and land, for example, and/or tradeable items. Shelf-stable foods may
also be a wise investment, as could securing a private well or building a
rain catchment system.
Also remember that artificial intelligence is the "beast" that drives
the coming slave system. A formula created by the World Economic
Forum's philosophical guru, Yuval Noah Harari, describes the
technocrats' ever-growing ability to hack humans: B x C x D = AHH.27
B stands for biological knowledge, C is computing power, D is data
and AHH is the level of ability to hack a human being. AI needs massive
amounts of up-to-the-minute data for the control system to work, so
"starving the beast" also needs to be on your list.
That means eliminating apps and devices that collect your personal
data, Google and Facebook being two of the biggest data miners. It also
means rejecting CBDCs, as it's not really a currency but a tool for
population control, and digital identity, which will track everything
you do, both online and in the real world, and will strip you of basic
rights and freedoms based on your social credit score.