The U.S. Banking Crisis is About to Get Worse: What You Need to Know
Buckle Up: Phase Two of the Banking Meltdown is Here
Hey folks, it looks like we’re in for a rough ride. If you’ve been tuning out the news, it’s time to pay attention.
According to economist Jim Rickards, we’re about to enter phase two of the U.S. banking collapse. Yeah, you heard that right. Phase two.
Let’s break down what’s happening and why you should care.
Remember Phase One?
Phase one kicked off on March 8, 2023, with the collapse of Silvergate Bank. Most of us noticed the headlines the next day when Silicon Valley Bank went down.
The FDIC swooped in, but the kicker was that deposits over $250,000 were uninsured. This wiped out millions for Silicon Valley venture firms. Ouch.
Then, in a surprising twist, the Treasury decided to cover those losses. How are they going to pull off a trillion-dollar bailout? Good question.
The dominoes kept falling: Signature Bank closed, Credit Suisse merged with UBS under duress, and First Republic Bank was sold off to JP Morgan. It was like the banking version of “Survivor” — alliances were formed, but most players got voted off the island.
Phase Two: Here We Go Again
So, what’s phase two all about? Well, it’s looking grim. We’re talking about the potential nationalization of banks. Just like in the Great Depression, we could see thousands of institutions getting swallowed up and controlled by the government.
This isn’t some dystopian fantasy; it’s happening now.
The Commercial Loan Squeeze
Kevin DeMeritt from Lear Capital pointed out a critical issue: commercial loans are coming due, and small banks are getting destroyed. Why? Higher interest rates mean people aren’t refinancing.
Banks are left holding the bag, and we’re expecting hundreds more bank failures. Regulators are already warning small banks to raise capital or face closure.
Fractional Reserve Banking: The Villain?
Fractional reserve banking is partly to blame. Up until COVID, banks had to keep 10% of deposits on hand. But that rule went out the window, so now they keep 0%. Zero. Nada. Your deposits? Lent out, every penny.
So, when people rush to withdraw their money, the banks simply don’t have it. We’ve seen that plenty haven’t we?
It’s like the worst game of musical chairs ever.
The Numbers Don’t Lie
Let’s talk numbers. According to the FDIC, unrealized losses for banks hit $517 billion in the first quarter of 2024. That’s up from $471 billion the previous quarter.
Forty banks with over a billion in assets are reporting losses higher than 50% of their equity capital. That’s terrifying. And it’s not just the big players — over 200 smaller banks are in the same boat.
What’s Next?
Here’s the kicker: phase two of the crisis means more bank failures and more economic turmoil. Investors think the crisis is over. They’re wrong.
The false sense of security from the initial bailouts is gone, and we’re about to see the real fallout.
The Big Banks Are Coming
Expect the big banks to swallow up the small ones. Your money will be used to bail out these institutions, and you might see your financial freedom disappear.
Central bank digital currency (CBDC) is on the horizon. Imagine a world where every transaction is monitored and controlled. That’s where we’re heading.
Protect Yourself
So, what can you do? Jim Rickards recommends holding physical precious metals like gold and silver. It’s not just about personal safety but also about securing the economy. Countries that back their currencies with gold are in a stronger position. The U.S.? Not so much.
The Bottom Line
The quiet period is over, and phase two is here.
The effects will be devastating for financial institutions and the stock market.
It’s time to get ready.
The banking collapse phase two has just begun, and it’s going to be a bumpy ride.
Stay informed, stay prepared, and protect your assets. The storm is coming, and it’s time to batten down the hatches.
Thank you for reading :) Alexis
