Banking Crisis Revealed:

Banking Crisis Resets

James Grundvig

When Silicon Valley Bank (SVB) suffered a short-lived run last Thursday, the feds had to step in and shut down the bank on Friday. With a 185:1 debt-to-asset ratio, with the three main executives dumping stocks weeks before in an insider tradingscheme, and with senior executives receiving six-figure bonusesthe day before the collapse, federal regulators had no choice but to shut the operation down.

While SVB executives were lining their pockets on the West Coast, in its New York City branch the managers had to call the police to physically remove irate investors and startup CEOs from the premises. The bank run “drained a quarter—$42 billion—of SVB’s deposit in hours, leaving it with a negative $1 billion in cash,” according to Zero Hedge.

As the 18th biggest bank in the United States with $212 billion in assets, before closure, and the second biggest bank failure in U.S. history, there is more, a lot more to Silicon Valley Bank’s (est. 1983) failure than meets the eye.

The banks’ contagion spread over the weekend.

First, on Friday, Wells Fargo failed to make tens of thousands of direct deposits on behalf of its companies, affecting millions of depositors, followed by an odd e-cast a note to its depositors that their bank account balances might not reflect reality or be accurate. On Sunday, the one-two punch came.

By Monday morning the wheels broke off the confidence game. The New York Stock Exchange halted trading 30 times on bank stocks to prevent a much larger run on the banking sector, preventing vulture funds from “shorting” the banks. First Republic Bank (est. 1978) also fell victim losing 60 percent of its value for the wealthy clientele-driven bank. When will the regulators step in and close its doors?

Yet another bank, Western Alliance Bancorporation (est. 1995), with ties to Silicon Valley Bank, could be the fourth failure to occur this week.

Amid all of the whirlwind, head-twisting runs and rumors, the Federal Reserve stepped in to ensure that all depositors would be backstopped in the SVB collapse.

Still, the financial overhang on the markets is Joe Biden’s ice-shelf of his whopping tax proposal with a $6.8 trillion budget and massive tax hikes. Announced a day before the SVB bank run and Signature Bank failure to fall three days later, it’s hard to talk about a “confidence” game when the $6.8 trillion will be revised northward to include the $500 billion needed to bail out the banks listed above.

This is not the end of the banking crisis. It is the beginning.

On Tuesday morning, as of this writing, the financial markets calmed down Bloomberg News and other business shows changed the narrative to CPI and the overall health of the economy, with less coverage on the historic banks’ failures. Asia appeared calm. European markets started the day the same. It was back to business as usual.

There are systemic problems and undercurrents in the structure of the banking system, however, that needs to be addressed, that were never resolved post the 2008 Crash, and that printing money or raising taxes can’t resolve.

• The collective global debt is $300 trillion

• The global GDB is $100 trillion

• The true global debt rises above a couple of quadrillion dollars when factoring in outstanding derivative contracts, social programs, and other unfunded liabilities that socialist governments have pushed and promoted the past half century.

We know those obligations, contracts, and liabilities will never be paid back. Ever. So, is it any wonder why Klaus Schwab, his World Economic Forum, the United Nations, the IMF, and World Bank want to “reset” the global economy by engineering its demolition?

As such, the financial pundits who mislabeled the start of this banking run as “Lehman 2.0” or that this outbreak is now contained will be in for a major shock when the entire financial system implodes at some point this year.

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