Beginning Of The Banking Collapse?

By | March 14, 2023

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By now you've probably heard of the Silicon Valley Bank filling either from Our newsletter last week or from just Waking up to it this morning or reading The news of the weekend there are many Unknowns with this most significant bank Failure since the 2008 crisis and now a Second Bank in New York has just been Shut down this morning as I'm recording This video which is on Monday now I'm Going to explain what we know how it Could affect you moving forward and what You should be watching for in the next Several days and weeks your inclination Might be to dismiss this because after All you may not have much or any money In liquid cash over 250 000 money Invested with venture capitalist or Cryptocurrency but you might want to Rethink that position this Fallout could Have broad implications far beyond just Silicon Valley or New York I'll also Announce a winner of last week's Giveaway and I'm going to tell you how To enter this week so let's take a look At what you need to know what happened I'm going to try to explain this as Simple as possible avoiding too much Technical Garden so you can really see What happened here in a nutshell Silicon Valley Bank attracted venture capital Firms Tech businesses startups and CEOs And officers of these businesses by Offering them high annual percent yield

On their accounts as the market goes it Wasn't incredibly high but it wasn't Enough of an incentive paired with their Flexibility for startups that they had 342 billion in client funds 74 billion In loans and 212 billion in Assets Now Sfv maintained a low level deposits on Hand and invested a more significant Percentage of its capital to try and pay For its high rates so what they're doing Is they're taking money from individuals And then turning around and investing it To try to pay back those High rates that They're offering their clients all right Now to pay for these high interest rates Svb had a solid amount of money in U.S Treasury bonds and as a Fed raised Interest rates the bond value dropped in This foot svb in a situation where they Needed to raise over 2 billion in Liquidity and they fell short of that Mark and this caused many of their Account holders to quickly go and which On transfer their money out now after Sfb announced that it lost 1.8 billion On its asset cells sell selling those Bonds off at a premium the bank failed To secure additional investment Capital To make up the shortfall and what this Did is it caused many of their customers To again withdraw their money rapidly That aggravated the balance sheets even Further and then threatened the bank's Solvency so the California Department of

Financial Protection and Innovation Stepped in and took control of the bank Now the FED to calm fears they committed To make whole all of the depositors this Would be actual money in the bank the Federal Deposit Insurance Corporation or As we commonly known as the FDIC is an Independent agency created by Congress To maintain stability and public Confidence in the nation's Financial System the FDIC insures money in Banks Up to 250 000 per individual and this Bank though had a minimal number of Accounts that were less than 250 000. Last year only around three percent of The accounts were that lower dollar Amount that means that 97 of the Accounts last year were more than 250 000 at sfb these weren't just Ultra Rich Individuals those large accounts were For startups for business ventures and Investment funds these accounts covered Everything from equipment and supplies To company payroll and retirement Accounts now a number floating around Today indicates that about 89 percent of The accounts exceeded the 250 000 Threshold this indicates how much of a Run was happening on this bank before The Regulators stepped in and stopped Transactions once that happened the FED Announced that they would make whole the Depositors and that funds deposited Could be withdrawn starting Monday today

At the time recording this video so Basically if you had liquid cash in the Bank you could get it and then move it If it was the insured amount uninsured Depositors will receive a receivership Certificate for the remaining amount of Their uninsured funds and when the Bank's assets are sold off those Certificates are paid to the extent that The assets are sold so you see what I'm Saying if they they had over 250 000 Sitting in there they would get paid the 250 000 by the FDIC then the bank would Have to sell the assets that they own And then try as much as they sell from Those assets to pay the remaining Balances it won't necessarily be 100 Or it may or may not that's that's the Issue it probably won't and Sunday night The US government informed the svb Depositors that they'd have access all The money deposited even if the amount Exceeded the 250 000 limit insured by The FDIC more than half of the U.S tech And Life Sciences startups banked with Sfb and many were concerned they Wouldn't have enough even to you know Pay their employees this week or keep The companies running and If the Fed had Not aggressively taken the steps that it Did before Monday morning there would Have been hundreds of businesses Potentially going belly up this week the Fed's rescue is for depositors just

Depositors the equity in the bondholders Are going to be wiped out so there will Be a massive loss for many people Trading of sfb Financial Group stock has Been and halted but they had a market Cap of 2.33 billion dollars that's going To impact investors investment firms and Any funds that had equities in sfb Hopefully you followed all that with sfb There's a lot of moving Parts the Takeaway here is that a lot of money is Still unaccounted for this is going to Have a significant impact and we're far From being out of the woods here the Other significant bank failures you need To know about are silvergate and Signature Banks now two days before sfb New York Regulators moved in and closed Silvergate the bank had heavy exposure To FTX you've probably heard a lot about FTX in the news several months ago their Collapse took place over 10 days in November in 2022 Signature Bank was also Heavily exposed to crypto and one of Their main products was Signet which Facilitate transactions from crypto to Fiat currencies the final thing to know Without over complicating all this is That usdc it's a cryptocurrency stable Coin that's pegged to the dollar and Stable coins are really a subset of the Crypto ecosystem that investors can Typically rely on to maintain a set Price it's where many crypto companies

Put their assets for stability so what Ended up happening is usdc is mainly Held in six different banks and three of Those banks are is you can probably Guess the ones that ended up collapsing Just over the weekends Silicon Valley Bank Ranch silvergate and signature the Federal government stepped in on Sunday To guarantee all deposits for sfb and Signature depositors adding confidence And sparking a small rally in the crypto Markets today on Monday Why does this matter most people Watching this may just simply dismiss This because they don't have over 250 000 in the bank nor do they have Cryptocurrency nor any account with any Of these banks that just went under but Maybe you're not a venture capitalist But there's still plenty of cause for Concern the full impact of these High-profile bank failures remains to be Seen as I mentioned earlier to pay the High yields sfb had very little cash on Hand from depositors to pay the high Yields they were heavily invested in Multiple markets especially startups and Tech companies if you're 401K had a Venture capital or emerging technology Account you've been investing in with Every paycheck it could take a hit if That exposure was through one of these Banks if you work for a startup OR tech Company or any business which does

Business with a startup OR tech company Transactions could be held up even if None of those really fit your situation You have to understand that anytime We're talking about billions of dollars Transactionally slowing down held up or Just about operating it can directly Impact your bank in the overall economy That big vault at the back of your Hometown bank is likely empty there's Probably not really any money in there And when you deposit a dollar your bank Might be loaning that out investing it Or putting into other accounts at other Banks it's not likely that any Bank on The planet has cash on hand if all other Account holders suddenly decide to close Their accounts and withdraw their money And you might say that hey taking your Earned dollars and loaning it out to Others in exchange for a highly modest Interest return is sort of kind of a Ponzi scheme if the true Bank ledgers Were open Banks they borrowed they lend They borrow they lend and then they lend Again until the one dollar that you Initially invested is really loaned out To possibly nine other dollars and There's a lot of money on the books that Doesn't have a corresponding one-on-one Ratio of greenbacks and that's a problem If the chickens ever come home to ruse As they say Banking is really a Confidence Game

Basically you have to be confident that Your bank does not overextend itself it Doesn't leverage itself incorrectly or Abscond with your funds when people lose Confidence in their Bank you see these Mass migrations and people closing their Accounts and there's a real good chance That many banks and transaction systems Are tied into one of these failed Banks Which is why the FED has stepped in so Quickly this time as opposed to the Response time in 2008 they want to try To calm the market assure people that Their money is safe and avoid people Making a run on their Banks even so you Can bet that when the opportunity to Close Accounts at Silicon Valley Bank Goes online today as it is supposed to I Can't imagine anyone leaving their money In that bank these million and billion Dollar shifts can dramatically impact Markets in the overall economy they hold Up billions of dollars in deposits The Fallout is often only learned as the Details get sorted out as we find out How bad it is through one alarming Headline after another foreign First there's an old saying that the bed Tightens until something breaks and that Something is assuredly these recent bank Fillings so it isn't very likely that The fed's going to continue to raise Interest rates as aggressively as they Have in recent months given the hit to

The economy they're probably not going To want to pump the brakes any further Initially it looked like they would Emerge from their meeting on the 22nd of This month with another big interest Rate hike and that's likely to be too Big or at all at this point when they Announce rate hikes it's mainly the rate At which banks can borrow money and it's Clear that with the bond market in Decline and capital evaporating in Certain sectors and taking significant Shifts in other sectors if that's not Going to want to slow those processes Down they definitely want Banks to Remain solvent and each one that they Have to assist is another major hit to The economy even when they have paid Those Banks into the FDIC program now Second you're going to hear the term Made whole quite a lot in the coming Days and weeks and that means everyone's Going to get their money back and for That to truly happen though svb's assets Need to be sold off only few banks are Large enough to do that and they are not Really buying into that ideal right now No one's really taking up the FED on the Offer to buy this bank at least at the Time of recording this video and that Would mean a more protracted process of Selling off pieces which will draw this Process out even further now the Subsidiary of svb in Britain was sold at

HSBC Holdings uh British multinational Universal bank for a total of one pound To avoid a complete meltdown in the Startups and Tech sector what these Hefty million and billion dollar moves Do to the economy is so really a road Confidence in Banks Venture Capital Investing and even long-term Investments When confidence is eroded the economy Begins to slow down as people really get Super conservative with their spinning They start pulling their money in and Rightly so there's a lot of reason to Circle one's wagons and brace for impact Now we can't say with any absolute Certainty the full extent of what They're referring to as a contagion Really is going to play out to be we Can't determine with absolute certainty If the Swift action by the fed the bank Of England and the British government Are really fast enough and deep enough To contain the spread of further Failures each bank failure really sends Ripples and shock waves into the larger Economic ecosystem that's where it could Have a dramatic impact in the coming Weeks we're already reeling from a Global recession of global inflation and This is only going to aggravate those Further if you're looking for a loan or Line of credit in the near future it's Going to get much harder to obtain The response will be politicians trying

To stay ahead of this by proposals to Regulate mid-sized Banks debates over The purpose and meaning of FDI Insurance In making investors whole and lots of Finger pointing and accusations as is The norm right now it doesn't really Appear that this is going to equal to The Meltdown of 2008 at the time of Recording this video but I mean things Could change within the next 48 hours But it's going to deflate the economy And weigh on the economy for at least The rest of this year one frightening Part of the FED move is that the Government will allow Banks to post Collateral mainly treasuries as Collateral to borrow against still they Will only be able to use the par value Of the asset rather than the market Value the idea is that this will create Solvency for the banks but it really Introduces significantly more risk into The system as there's really no Guarantee that these treasuries will Retain value that yet the banks will Willingly borrow against that risk now In the aftermath of this Fiasco we also Will likely see the FDIC limit raise Signif significantly the 250 000 limit Is enough to make you or me whole again As they say but it is insufficient for Modern banking the FED after all Directly causes event by holding Interest rates at zero percent for so

Long and then just aggressively raising Them kind of seemingly overnight and has Left at least a few institutions holding The bag and we may still see another Bank unable to recover even by borrowing Against our own treasuries and as we Know disasters even economic ones are Usually not caused by a single event but By a series of events that typically Compound upon each other I would Encourage you to watch the news in the Coming days for any more significant Bank failures and we will of course keep You posted in our newsletter and videos With the FED not expected to raise Interest rates after this crisis Inflation may not be held in check Raising interest rates is one of the Fed's only tools to keep inflation in Check so expect inflationary pressures To continue also coming out of this you Might see some people moving to crypto And away from more traditional banking Systems Bitcoin was created to counter The 2008 financial crisis many people Sought to pull their money away from Conventional banking systems and get Better control their money through an Electronic peer-to-peer decentralized System whether this move will take place Will remain to be seen because most People don't have much confidence there Either especially after the events of The last few years where the crypto

Market has gone down considerably and Considering also the high profile demise Of several crypto exchanges in recent Months Giveaway For this week's giveaway we're going to Be giving away a survival tabs eight day Food supply and to be eligible for a Chance to win this in the giveaway just Simply post a comment below and click The like button next week we're going to Use a tool to draw a winner randomly From the comments of this video now it's A very important to note I'm never going To reach out to you in the comments Sections I always get imposters I go Down there try to tell people hey you've Won just give us money for shipping uh That's not me I'm going to reach out to You via email if you're the winner just Be sure that your email address shows on Your about tab of your YouTube profile And again please ignore any comments That's saying you know from WhatsApp or Telegram because it's not me I don't Have accounts on either one of those for Last week's winner of the survival Medicine handbook the winner is a Subscriber yoga Edina and I'll reach out To you shortly to get that sent to you So here's the thing I'm not a financial Advisor but I can confidently say a few Things we can all expect that there will Be a significant slowdown of the economy

As everyone everywhere adopts a Risk-averse conservative approach and I Personally know a few people that are Making adjustments to their Iris and 401ks to as conservative as it approach As possible now at least for the moment This crisis may have just barely been Averted maybe but that doesn't mean Banks will use our treasuries to bring Their balance sheets into better order And also we don't know if we entirely Dodge the disaster until we understand How fast the FED makes depositors whole And how much exposure other firms may Have had to these filling Banks the Entire situation really remains very Fluid and right now is literally Changing by the day we're going to Continue to monitor this but I would Also really suggest that you take a look At our free recession-proof guide I'll Post a link to it below even the small Measures you can Implement today will I Think help you prepare against Mutual Financial collapses let me finish with a Personal story Um I was debating whether to bring this up Or not in November I share that Something kind of uh challenging it Happened in my life I didn't really say In that video some of you probably don't Remember it was so long ago Um it was just something that had

Happened and it was a financial impact That it had in my life I'd make it I'd Made a pre-sizable investment I'd sold a House years ago and uh I taken a lot of That Equity equity and invested it in a Uh Investment Portfolio that ended up Going bankrupt and I'm in this long Process of trying to recover you know Fraction of it who knows if I'll ever See that again and uh yeah it was I Would say it's kind of it was Life-changing looking up one day and you Know a sizable amount of money that you Worked hard over 10 12 years accruing Through the cell of a house and you know Taking care of that house and then Seeing it just you know you get scammed More or less it feels like that anyway Uh watching this play out at svb svb it Feels very similar Um you know seeing that just Everyday People again I know a lot of it was Businesses but there was a lot of people And there will be a lot of people Severely impacted by this so I take no Joy and I'm watching you know the old Saying misery loves company I for me I Don't I don't want to see other people Hurt the way I've been it's it's very Very difficult And this leads me to another point I've had several companies reach out to Me in the last uh six weeks asking me to Promote their financial products on my

Channel and I've seen other Prepper channels go ahead and decide to Do it and you know they this company's Approached me and said hey we'll pay you X amount to promote our product and it Was a sizable chunk of change it was not These people were coming in with some Pretty significant numbers and I bring This up because I was going to say Something on the channel a while back But I said you know I told all the Companies no and the reason I told them No is because I watched several YouTube Channels that I had respected at one Time last year uh Financial channels That you know I learned some stuff from Watching over the years they started to Do the same thing they started taking Money from these Financial Investment opportunities And I know the size of those channels And the numbers they pull down in views And I know roughly how much they were Probably offered and it was it was Enough to you know it could have been Someone's salary how much they were Taking each you know month and I bring That up because I will never try oh I'm Just not I just I'm never going to try To push a product on you to uh solve Your financial problems and you know Investments I've mentioned a few times Uh a couple of about three years ago at The beginning of the you know when

Everything was happening at the Beginning covid I brought up gold a few Times simply as an option if people are Interested and I explained the pros and Cons of it uh there was a company I Worked with that I have a high degree of Respect for and I when I buy my precious Metals I go through them but apart from That you know I just simply mentioned Here is an option if you are interested In precious metals and a lot of people In this community are but again I point This out as uh That's kind of an explanation that I I Always want to be careful with this Channel and please be careful when Someone is selling you a financial Product to offer you know that offers to Fix your problems or is sounds like a Sure bet because let's be honest there Are there are no sure bets at this Moment the only thing I know that I can Personally do is take care of my Household make sure my food water energy All these things medicine are in order Um you know I'm trying to grow this Channel so for me personally that's Where I'm putting my money is to Reinvest into this channel uh we are Going to be taking on a few sponsors in The coming months and I've been very Very skeptical doing that in the past Because I want to make sure that if I do Pick up a sponsor it always aligns with

Some product that I personally would use And that I see is bringing value to this Community and that's why uh you know I Get a flood of emails every morning About 10 or 15 asking me hey would you Promote this would you promote this Product you know whatever it is and 99 Of my just delete because I'm just very Very cautious what I bring to you and I'm saying all that to wrap up this Point Is uh in the coming months just be Careful I think is my takeaway here who Is offering you what to solve your Problems especially on a financial note Um apart from the fdiac insurance that You may get in your account you know up To 250k Um you know just be careful is what I'm Trying to say use wisdom and especially Be skeptical if someone's coming to you With a financial product and they're Taking money to promote that to you That's massive conflict of interest I Know I said a lot there but that's just My two cents it's something that's been Kind of Weighing on me and I want to Show the community Again I know there's a lot happening but We keep doing what we do we prepare We'll get through this uh this is gonna Be something I think we'll look back in A rear view mirror it's going to be Difficult potentially however this plays

Out but we'll get through it as always Stay safe out there

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