Big Banks are dying, get ready for the ripple effect.
Silicon Valley Bank, Credit Suisse and Signature Bank ran out of depositor's money in the last month.
Banks are the most evil corporation of all time.
If there is one institution responsible for making the rich richer and the poor, poorer, it’s the banks. They are the most evil people out there. It’s horrible to see people lose their money. It’s heartbreaking to see depositor’s crying their eyes out. It’s frustrating to see depositors trying to kick down the doors of these banks, who ate their money. ATMs running out of money. The entire system of banking is built on fraud. In simple words, they lend money they don’t have. They are writing checks with zero assets to back them up. This game has been going on for a long time. We must take notice. This is a global problem. We don’t realize, how many banks have literally failed in front of our eyes, unless you are directly impacted by it.
Let’s look the US, the richest country on the planet, even in Richie Rich’s house, they run out of cash.
Since 2001, there have been 563 bank failures in the US.
The reality is that lot of banks collapse for ‘n’ number of frauds, it’s the mafia, the top execs who play this game, when one bank collapse, buy their assets or acquire the company for 50-80% below the realistic value(before the collapse). It’s all brutal business at the end of the day but that’s how it works.
Now, all big major banks JP Morgan, Citi, Bank of America & the all the top hotshots have pledged to help out by lending billions. Why would anyone help out rigged banks? Because all of them play the same fraud, they HAVE to help each other out or the entire financial market will crash.
Have a look at the number of mergers & acquisitions in the banking industry in the US - This is a great example -
Now, US is the most stable country in terms of banking infrastructure. Imagine the case in Venezuela, Turkey, Pakistan - where inflation numbers are in double digits.
Even in India, the banking infrastructure has always struggled. In the last 5 years, PMC, Yes Bank and Lakshmi Niwas Banks have failed.
Bank failure is not something new in India. After the formation of Reserve Bank of India in 1935, up to the period of the country getting Independence (1947), there were 900 bank failures. From 1947 to 1969, 665 banks failed. The depositors of all these banks have lost their money.
It is always the poor who loses money - people who make under 80k a year fall under this category and that’s probably more then 95% of the world. Someone can factcheck me on that.
How is the world reacting to the banking mess?
This time, it’s not only the private banks but also Central Banks. In order to rescue the depositors, look at this announcement from the Federal Reserve. They are going to collab with Central Bank of the UK, Canada, Japan, ECB & Swiss to amp up the dollar supply needed to avoid a major collapse. This is a big news, I have never seen so many big parties who control trillions of assets across the planet trying to save the dollar. Something big has gone bad again and we haven’t seen the real news yet. The banking stocks are down heavily, the depositors are going to show up on Monday(today) to get their money out because they don’t trust these big banks anymore.
Now, I see two things -
a) Banks will print more cash (probably 10+ Trillion USD)
b) Depositors will continue to cash out and invest capital into real assets(gold, silver, commodities & even Bitcoin)
The effects of the banking crisis will have its ripple effect all over the world. Banks will continue to die, the big one’s will continue to gobble up the small one’s. However, with crypto in the picture, which brings so much sovereignty to an individual, it becomes tricky for the banks. Should they integrate crypto or stay out of it? How will CBDC’s pan out in the next 10 years. Most of the countries, irrespective from the WEST or EAST don’t support crypto because their political campaigns are funded by these banks. We need more crypto-friendly leaders, politicians who can voice the real value it brings to the corrupt system. It is an opportunity for neutral countries to really adopt bitcoin. If India tomorrow adopts crypto, that event in itself can rocket Bitcoin’s price per coin to $100k.
This is a trust game - who do you trust more? Banks or Bitcoin. It’s your turn to decide.
What happens to Bitcoin?
Bitcoin will continue to do what it does best - shock & survive. It’s an inflation hedge and with it’s competition with Gold, if Gold pumps, BTC will pump. If the Central Banks print more cash(like they did during covid) to save the banks, lot of capital will flow in the stock markets, gold, bitcoin and other commodities. In my personal opinion, we have a high chance of hyperinflation - things will cost 2x-10x within a matter of weeks. So be prepared guys, manage your money right and get hedge your bets.
Last month, In February, we saw a lot of negative press about crypto and Bitcoin. Gary Gensler, the Fed Chairman, came out and attacked Ethereum and other Proof of Stake coins as securities. Lawsuits against FTX, Celsius and LUNA continues. Elected officials are warning against crypto and stating it is a virus for the banking institution, which is true. However, the banks are the real viruses here.
Here is an excerpt from the Bitcoin whitepaper - It clearly highlights the problem with the banking system and a need for a currency with finite value. Anything which is not scarce will always continue to devalue a.k.a dollars and all fiat currencies.
Bonus content - The collapse of SVB by Visual Capitalist.
When you see the CEO selling it’s own company’s stock, that’s a major red flag. These guys should be behind bars for bankrupting the lower/middle class people of the US. The problem is it won’t happen, some fines here and there and you are good to go - that’s the world we live in. It sucks but we should be real with ourselves. Nothing is fair and unless you take some risks yourselves, you will always remain part of this bloody broken system.
Cheers, until next time
Abhishek