The entire concept of fractional reserve requirements is understood by such a small percentage of the population. As our public (and private) education systems continue their DEI-driven race to the bottom, subsequent generations are ever more ignorant, making them easier to manipulate. Which is, of course, the goal.
And also explains why Jim Kramer is still on the air.
I've been using Quicken for over 30 years. If I had to balance the old fashioned way (in the hand written ledger attached to your checkbook) I'd probably stumble as well.
Like, when was the last time you did long division? :p
Another GenZ head scratcher, "What's a 'checkbook'"?
I've heard the young uns can't read a non-digital clock or cursive writing. Also, don't all the money apps just give you free money? That's what I see on all the commercials.
Fwiw my 8 yo is still taught cursive and can read non-digital clocks (we have several). Granted she may be the exception as opposed to the rule but there will still be some that learn these key life skills.
Banks are by design highly leveraged. Marginal banks are now failing not because of inherent leverage rather due to the ending of a multi decade period of generally falling rates of interest. Now that central banks have pushed short rates to the ludicrous nil level the secular trend is over. As a mathematical certainty fixed rate bank asset prices (of bonds, bank loans, etc.) fall when nominal rates rise and ALL banks trend toward insolvency as their meager equity vaporizes. Make no mistake, the forces at play at this point in history are systemic and central banks can't save the day by pushing nominal rates to new lows. Furthermore this fundamental force impacts ALL leveraged financial institutions. Central banks now have just two options; continue to tighten and trigger a global secular financial collapse or accelerate currency debasement which will also result in financial collapse in inflation adjusted terms, among other societal problems. Tangible assets offer refuge for those who act in a timely fashion.
Indeed, as with financial cycles through history. Human nature doesn't change nor do such cycles. Central banks haven't been managing economies and financial markets for the last four decades, as they believe, they have been distorting them; much as a substance abuser distorts rather than manages their mental state. And the avoid hangovers stay drunk "strategy" is now ending. Given that global currencies are all fiat the safe bet is resolution of decades of financial distortions will be via price inflation (severe at times). Hence my note regarding tangible assets, meaning assets you can reach out and physically touch.
The genesis of financial cycles was my focus in grad school during which time I came to understand prevalent academic notions regarding such cycles were not just faulty but utterly fallacious, for the most part. I'll be anticipating and analyzing the process of collapse in the months and years ahead on the Substack I just started. BTW, I look forward to writing about inevitable recovery, but that is likely at least a decade out at this point. Secular cycles are much longer and deeper than the interim cycles we've experienced over the last four decades.
The Austrians offer some interesting insights but to understand econ you really just need to understand how people make choices and apply that understanding consistently (there is no need for fidelity to a school of thought). If you mislead people via manipulated prices, particularly interest rates, they make choices which will prove unsound at some point in the future, for example. That is fundamentally why cycles occur. I'll be delving into the matter in considerable detail on my Substack in the months to come, as we head into painful financial conditions.
The reserves of Custodia Bank, run by Caitlin Long, are 108%. But when she applied for a master account with the Fed, the application was denied for no apparent reason other than the unstated fact that the bank would be friendly to the crypto and tech industries. Or perhaps the regulators don't really want banks to be fully funded and operated outside of the established and accepted Ponzi scheme.
CBDC is just a vehicle, to buy time and reallocate to hard assets, allowing them to call their chips from the NWO "dealer" before the people figure out the chips are worthless.
The people will just go along with CBDC. Just like they did with everything Covid. It’s like the end of the body snatchers, you know what they are doing, but everyone is already changed. You will own nothing and like it! It’s a nightmare for those who haven’t fallen asleep!
What exactly is a hard asset. When I looked up the term I see machinery, trucks, equipment. But to me this would be somewhat dangerous if there is no gas, gas is extremely expensive or if it runs on electricity but no electricity.
Right now mere mortal me is retired. We have diversified as much as we can and the only improvements we are making are to the land. A second water source (rain) retention just because we are on a well and we are in a drought area.
I do have food stocked up, looking at water to somehow stock up but really until it truly once and for all hits the fan, you don’t know what you need until you need it.
I have been buying manual tools. Stocking up in saw blades, etc. I am looking for a trundle seeing machine. Already stocking up on needles and thread. Looking at buying a Berkeley water system.
So would paying off fixed asset debt take priority over credit card debt even though the interest rate is lower? From a worst case scenario bank crash reality it seems like consumer credit card debt won't really matter? If that makes sense?
If you don't pay your credit card debts you wreck your credit and build up a snowball of fines and interest. Eventually the CC companies will play "Let's make a deal".
If you don't pay your mortgage, property taxes or car payment you've got other problems, like homelessness or lack of transportation.
It doesn't hurt to plan for the worst case scenario.
I'm saying that if the pooh hits the fan, it would be better to leverage your credit for durable/fixed assets and let the creditors squeal trying to collect from everyone who would be crunched in what I think is the inevitable: Economic Winter
I would be good to own hard assets priced in today’s already inflated dollars when down the road those assets will cost even more than they are today, if you can find them, and most likely far more expensive and cost even more inflated dollars ( or central bank digital currencies)
And as always, cash it king. At least you can pull in 3.5 - 4% interest in a simple savings account right now.
As this next crises unfolds lending will get tighter and tighter and pull down asset values, especially the sacred housing market which is driven by low-interest, easily obtained, and highly leveraged mortgages.
Anyone who still keeps any substantial savings in a 1/4% yield account deserves what they get -- nothing. Your Bankrate link lists many 4%+ options and no minimums.
I expect more from Ryan "ubiquitous stacker" Gardner. That sounds like a 26 yo FA from Fidelity. Stackers more in-tune than any FA I talk to. FFS, they even have 20+ Mil to manage. dolla go splat.
Gregory Mannerino has a daily commentary that I find very interesting and educational. His POV is that the activities of the central banks are not due to insanity or some kind of mysterious incompetence. Rather, they are deliberately calculated to bring about this situation in which they are becoming the buyers and lenders of last resort, from which it is a short hop to arrive at the position of owning everything. You just tootle along with your normalcy bias, trying to honorably make your payments while they choke off the economy and drop everybody into free fall in which they have no way to make things work. He recommends betting against the banks by “becoming your own central bank” by acquiring gold, silver, and other hard assets, as well as some crypto. He doesn’t talk about storing food and planting a garden but I would say that is obvious as well. Means of self defense ditto.
"When the bank’s federal charter finally expired, Biddle secured a state charter from Pennsylvania to keep the bank operating. But in 1841 it went out of business, the result of faulty investment decisions and national economic distress."
Read that. Biddle was only successful when he had a monopoly granted via .gov. Now think of all the people who claim to be our betters today. They're all just Nicholas Biddles. We take away their .gov support and they'll fail.
The things that oppress us couldn't exist without a compliant monetary power that gives them favorable loans and lets them buy up all competition.
I keep seeing the ads for gold but still don't know how owning it would work. Buy a good safe and fill it with gold coins? What do you do when you need a quart of milk? You can't really take a twenty dollar gold piece to the grocery store. I assume you have to keep some cash at home or in a checking account and draw down some of your gold from time to time. Where do you swap it for cash? Your local gold dealer? Seriously asking.
Just do a bit more research on it all, especially security, how to hide it, how to verify that you are not buying tungsten plated with gold etc. etc. when you need a quart of milk you would trade a little gold for a lot of silver and use silver or some other stuff to make a deal for your groceries. It looks like we are moving rapidly to a hyper inflationary scenario. Bitcoin (traceable) and Monero (non-traceable) are going to be helpful things to gain facility with imho. I think, where we are heading, your local grocery store might be happy to take your 20 dollar gold piece , hand you the keys, and run!
I suspect that when it comes down to a situation that dire, you'll be bartering for a while. I told my dad to have toothpaste, shampoo and other ordinary items on hand because they're easily tradable for stuff like milk. But we don't really know what a world like that would look like and for how long. Small denominations of metals like gold and silver in your possession would also be helpful, but I suspect we'll still be using paper currency as Zimbabwe does and as the Wiemar Republic did.
I dunno about CBDCs - that would put companies like Visa, Paypal etc. out of business. Lots of fees are currently made on transactions - that's a huge source of revenue that would suddenly disappear.
Imo, banks & payment processors will fight tooth & nail *against* CBDCs.
I know about as much about banks as I know about quantum physics and statistical analysis program design, which is, it appears, exactly as they have intended. They have WAY too much power and hate the small depositors like me. This is NOT a healthy situation. When their $86 squintillion turns out to be another chimeracle fantasy it will be quite educational to see what is left after the entire world implodes. Meeeooowwww!
I think my grandfather's assertion that the bottom 10% of any graduating class goes into banking remains a truism for today. And sadly, they probably know as much about banking as I do.
All I know is, even in my limited knowledge, that Diversity/Equity/and Inclusion doesn't mean a thing in terms of banking. You are either a "good risk" or a "bad risk."
I had never before heard your grandfather's assertion, although it makes perfect sense. These are not Masters of the Universe by any stretch, they are more like a twisted Fraternity of insiders working against everyone on the outside.
Consider Barney Frank, co-author of the Dodd-Frank mess and then sitting on the board of the recently failed Signature Bank. What he seems to know about banking could be written on the back of a check.
Barney frank knows less than nothing about the actual way banking works. He only had the connections via being a crooked politician scumbag. They put him on that board probably as some sort of payoff. It also allowed the fat miserable looking old queer to get numerous hum jobs from slobbering young interns that would do anything to be inside the beltway. The guy is pure garbage.
Dumbasses and crooks in charge, everywhere you look. And if you stand up and say “Enough”, you’re the crazy one. These highly credentialed buffoons put themselves and us into this mess. This is the culmination of a series of hubris driven experiments that each demonstrated that it was a bad result, and then these asshats did it again until the cake was baked. And the cake is baked. There’s no way to fix this without pain. But the buffoons get re-elected and reappointed and the banks give them donations and they scratch the bankers’ backs. And now the biggest financial mess in the history of the planet. They will temporize. They will try to keep the system from collapsing. They won’t keep jacking interest rates. Total banking system collapse means precipitous societal collapse. Slower collapse via inflation is what they will choose. Less messy. Less obvious. More cover while they sneak out of town and let the next guy deal with this mess.
The legalize there theft, that’s the way the games played. You hide a few shekels from them they’ll sic the full force of the government on you. Meanwhile, they just keep the spigot open for themselves. Feasting off our backs. Pure scum, the whole lot of them.
an interesting observation, but one that i doubt can really help us here as it did last time.
keep in mind that it was basically only the US that benefitted. everyone else got decades of deprivation. the US boomed because we had the only intact industrial base in a world that had just been flattened and we got to build everything used for rebuilding.
i struggle to imagine a scenario where that could occur today.
Sorry, but WWII did not help. Getting back to somewhat normal market forces, combined with a totally destroyed Europe which needed to purchase massive US goods, is what did it. "WWII got us out of the Great Depression" is as wrong as saying "FDR's New Deal got us out of the Depression."
Gato was likely referring to the fact that WWII "helped" make the US the global hegemon, basically supplanting the British Empire, not that it "cured" the Great Depression, which all informed people know is just a leftist fairytale.
Or their adversaries blow up their undersea pipelines, thereby turning it off. And the adversary then sells its own resources to the former recipients of those pipelines while starving its own (exploding) population.
Tell me again how it's "green" to ship -- on diesel-burning tankers -- our natural gas to Western Europe to burn instead of burning it here at home? Or the opposite, strangling the domestic fracking industry and importing oil from Saudi Arabia? Truly crackhead logic.
But people need to have working hands and feet to use those sticks and stones. Post-jab, 5G, chemtrails, self-spreading "vaccines" it's hard to fight back when your body is wrecked.
Jumping to the WEF isn't the proper way to think but it IS the way to acknowledge how Democrats and hapless RINOs take charge. Act first - make everyone sue to get back their "God-given" Constitutional rights.
“Global South “vs The U.S. led coalition of feeble.
Reality is gas and oil and coal and food production. Extractive industries. Farming. Not windmills, cow fart restrictions, and pronouns.
And if China, Russia, NK, Iran, Venezuela all start kinetic conflicts on whatever scale against us, it will hamstring the military. The EU is useless. They won’t even chip in 2% of GDP to defend themselves.
They only want the fear of a hot war - they're addicted to fear porn. We are actually at war, with "our" government against we the people. "Coincidentally" it seems to all be the WEF/UN/WHO agenda to install tyranny, one world government (not ours) and the destruction of Western countries.
Easy. If no one owns anything, all debt is cancelled. Then you start from scratch with CBDCs and UBIs to stop the screaming. Won't we all be so happy!!
Most people refuse to acknowledge the consequences to collective actions so long as they can maintain a comfortable status quo in their head.
When CBDC’s are offered as the government “savior” solution, most will buy into the concept hook, line and sinker. From there, it will be bug-filled hot pockets and rented everything.
I would expect that holding onto those hard assets would become more difficult if not impossible under this regime. They are already beginning this with forced-density housing and undermining local zoning laws to essentially eradicate the concept of single-family housing.
Imagine owning your home outright in a decent neighborhood with decent schools, when the government suspends zoning restrictions and within 5 years your neighborhood is flooded with multi-story Section 8 housing filled with Section 8 housing *dwellers* who have no concept of ownership or care? There goes your asset value.
True. And that is slowly being done already . Not in my backyard only works for the rich. We will find out what it was like for the poor who lost their homes when new highways were built, and when indigenous people lost their land. Guns and ammo, baby . Go down in a blaze of glory .
You might pick up a copy of “The Wood Gasifier’s Bible” so that when they try to choke off your diesel access you can run your equipment with the volatile gases given off wood combustion.
My dad, who grew up in the depression told me about how the stills didn't just make drinking alcohol, but also ran the tractors- arguably one of the reasons for prohibition.
I bet to some folk a 1919 John Deere is looking really good right now.
If this happens, black markets will be everywhere. Better have some commodities on hand. Digital currency will cause the most human suffering ever seen.
'regulators asleep at the switch and regulating the last crisis (which quite possibly causes the new one), opaque banks holding teetering piles of god knows what, implausible accounting rules that lead to sub-optimal or outright dangerous behavior, monocultures of risk management, and the sudden rediscovery of a variety of kinds of risk from duration mismatch to counterparty non-performance to arbitrary edict by regulators and central bankers that preferences some over others in a manner predictable only by political connection, not some known and knowable rules of commerce and unwinding.'
There is zero difference between the government reaction to the banking crisis and its reaction to the covid 'pandemic'. Rules and regulations are meaningless. The government simply changes them or ignores them.
Is the stupid cabal running the USG truly insane enough to pull that lever and start a hot war with Russia? They've been tapdancing ever closer to the line over the past year, and now that they're well & truly stuck in the coffin corner, there's a nonzero chance they really do say, "Screw it, let's go," and pull the trigger. Burn everything down all around them, bury their misdeeds under the carnage. They don't think it'll be them suffering the fallout, not really. Just we plebes.
"May you live in interesting times" as the saying goes.
"or maybe “wow, if we get this wrong by 0.16% we’re bankrupt” is a level of leverage you do not want your savings or your economy anywhere near."
And THIS is why all $431.23 I have to my name is saved, along with a couple of guitar picks, a hip flask of Jefferson's, and a picture of Rosebud, in a shoe box under my Sleep Number.
And US citizens and residents, and anyone who gets paid in dollars and transacts in dollars, is way up the world Cantillon pyramid. Americans think things cannot happen here which not only can, but are likely about to, at least in the attempt.
We own our house and vehicles outright, but we'd really like to buy land since we live in town. I don't want to sell our current home, but I don't want to be unable to raise what we eat either....
I wish I knew how this was going to play out so I could know what to do.
Current home sale wouldn't completely pay for land, there would HAVE to be a mortgage.
I’m in the same situation- own my home but no place to raise food. Maybe one can lease part of a farm and work cooperatively with the farmer? Would need to be a secure arrangement so you’d not get abandoned in a crisis.
If you do not have any real experience gardening, I can tell you from personal experience that it is not an easy and sure way of putting food on the table. We ALWAYS had a garden when I was growing up--we were organic before organic was a thing. It's a lot of hard work, you have to be at it every day. The best that you can hope for is that it will supplement, not replace, your grocery bill.
Unlike the grocery store, which generally has produce available year round, a garden only produces certain things at certain times. Some earlier than others. If you are relying on a garden you have to be aware of this. You just can't run out to the garden and harvest green beans or corn if they are not ready--or if they are done. Some things produce abundantly and others hardly at all. And of course it depends very much what kind of soil you have, what kind of rainfall you have, what kind of sun/shade you have. It really is not easy at all. Looking back at our family garden, as large as it was, it was not enough to support the six of us 100% of the time. We still had to go to the grocery store.
Yes, I didn't get into that. My mother did a little canning, but we really didn't have that much surplus.
What really gets me is these people who say that if you live in an apartment you can container garden. No, you cannot, not on any sustainable basis. What container gardens are good for are things like herbs and lettuce that don't take up much room. Again, a nice supplement and a change of pace, but no substitute for bought groceries. When I think about the variety of things we grew, corn, beans, peas, beets, lettuce, squash, eggplant, tomatoes, peppers, potatoes, cabbage, these are not things that can be grown on an apartment balcony. And as I said, it helped with the food budget but we could not live on our garden alone.
And carrots and onions, I forgot them. We probably grew around 15 different kinds of produce when you add it all up. I do miss the family garden but where I live now it's just not practical. The soil's wrong and I have too much shade.
I had some bumper crops at a rental over a decade ago. I've been at another place with more land for 7 years and cannot get a reliable yield. There's a lot of variables and people act as if it is a 'no-brainer'.
I’m thinking the best thing for most is to stock up on preserved foods in case of emergency. I normally keep 2 weeks supply for earthquakes as I live in CA. But need to expand for longer time in food shortages. Plus cash, etc to barter.
We have decades of farming/homesteading experience, we just need the right opportunity to buy (with a downpayment from our cashed out 401K). I trust my family and our ability to grow quality food, I think this is the future for us. I hope you can find your perfect situation too!
We've lived where Amish were before, in Ohio, there are definitely benefits but when push comes to shove don't look to them. Many, MANY of them are sold out to big pharma and reliant on cheap imports from China. It's easy to idealize them, but they are far from homogeneous and many if not most are so far removed from the land, they barely garden, take KFC to get togethers etc.
Don’t sell your house yet. If you can get a loan for land, do it. But don’t use equity from your house. Just my opinion. Wait til the market crashes and prices drop.
We can cash out our meager 401k for a downpayment, so that's the tentative plan right now and so much the better if prices drop, but we're in TN and people are flooding here driving up land prices.
Well for one, I grew up in the midwest and do not think of it as a literal garden of eden. But, as a person who is being priced out of the market by useless tech migrants, I can't see dropping that on others.
"I wish I knew how this was going to play out so I could know what to do."
That's why they call it 'speculation.'
The cool thing is, now we know that your guess is pretty much as good as The Industry Experts so you're bound to do at least as well as they have. It would hard to do worser!
The 'experts' will generally do-better because they're playing with other people's money ... Where as, you/me/we are betting with our own hard-earned ...
"but at some point, far enough from the wellspring of made up money, this flip and you become a bagholder who is losing wealth. and this cycle rapidly accelerates as people get used to it. you wanna get that cash out of your hot little hands as fast as you can before someone else inflates it away. it’s a race to the bottom."
Stated differently:
When BigFed prints $$ they're just stealing your savings to pay off the debts of the well connected who invested poorly.
I remember talk of Credit Suisse wobbling badly 5-6 years ago. I don't know how they patched that over. Surely it made it worse, since the takeover terms now are "you get nothing". For the last few decades, Deutsch Bank has been hollowed out because it was carrying the sketchy debt of southern European countries. Now the US has sucker-punched Germany with sanctions blowback.
I'm not surprised that banks are failing; I've been thinking they would for decades. My eternal surprise is that they have kept the charade going for so long!
What a financially and economically astute article! One of the best I've read here.
One further point you make implicitly that deserves emphasis is that when there is no disincentive to make bad loans, there is also no *incentive* to make good ones. That means capital and credit stops flowing preferentially to the firms that would put it to good use. "Good use" means producing things people need and being useful generally. So the result of the scenario malo gato describes isn't just the obscene enrichment of elites and the impoverishment of everyone else, it is also breakdown of basic production and services.
Everyone needs to educate their family and friends:
During the plandemic, the reserve requirement for banking institutions was 0%. Yes, it is still 0%.
No bank could survive 0.5% of its depositors pulling their money out.
This is insane.
The entire concept of fractional reserve requirements is understood by such a small percentage of the population. As our public (and private) education systems continue their DEI-driven race to the bottom, subsequent generations are ever more ignorant, making them easier to manipulate. Which is, of course, the goal.
And also explains why Jim Kramer is still on the air.
I always thought 10% wasn't nearly enough in reserve for a depositor run if people knew about it.......0% is unfathomable.
In the postmodern banking system there is only reward and never any risk, therefore 0% sounds just fine.
When was the last time your heard the term "Modern Monetary System"? Or for that matter, "Dodd-Frank"?
Don't tell anyone but friends and family so we can get our coin out
Just like the executives of SVB did!
Exactly!
They also sold a lot of personal stock holdings in the weeks leading up to the collapse. If that's not insider trading I don't know what is.
Perhaps Alvin Bragg will indict them next?
I don't know anyone under 50 that knows how to balance their checking account or do reconciliations.
I've been using Quicken for over 30 years. If I had to balance the old fashioned way (in the hand written ledger attached to your checkbook) I'd probably stumble as well.
Like, when was the last time you did long division? :p
Another GenZ head scratcher, "What's a 'checkbook'"?
I've heard the young uns can't read a non-digital clock or cursive writing. Also, don't all the money apps just give you free money? That's what I see on all the commercials.
Fwiw my 8 yo is still taught cursive and can read non-digital clocks (we have several). Granted she may be the exception as opposed to the rule but there will still be some that learn these key life skills.
Same here. Since 91. Still using desktop. Don't want to go to the cloud. I hate that Intuit removes functionality with every version.
Banks are by design highly leveraged. Marginal banks are now failing not because of inherent leverage rather due to the ending of a multi decade period of generally falling rates of interest. Now that central banks have pushed short rates to the ludicrous nil level the secular trend is over. As a mathematical certainty fixed rate bank asset prices (of bonds, bank loans, etc.) fall when nominal rates rise and ALL banks trend toward insolvency as their meager equity vaporizes. Make no mistake, the forces at play at this point in history are systemic and central banks can't save the day by pushing nominal rates to new lows. Furthermore this fundamental force impacts ALL leveraged financial institutions. Central banks now have just two options; continue to tighten and trigger a global secular financial collapse or accelerate currency debasement which will also result in financial collapse in inflation adjusted terms, among other societal problems. Tangible assets offer refuge for those who act in a timely fashion.
So this is how it ends.
I suppose it was a good run....
Indeed, as with financial cycles through history. Human nature doesn't change nor do such cycles. Central banks haven't been managing economies and financial markets for the last four decades, as they believe, they have been distorting them; much as a substance abuser distorts rather than manages their mental state. And the avoid hangovers stay drunk "strategy" is now ending. Given that global currencies are all fiat the safe bet is resolution of decades of financial distortions will be via price inflation (severe at times). Hence my note regarding tangible assets, meaning assets you can reach out and physically touch.
The genesis of financial cycles was my focus in grad school during which time I came to understand prevalent academic notions regarding such cycles were not just faulty but utterly fallacious, for the most part. I'll be anticipating and analyzing the process of collapse in the months and years ahead on the Substack I just started. BTW, I look forward to writing about inevitable recovery, but that is likely at least a decade out at this point. Secular cycles are much longer and deeper than the interim cycles we've experienced over the last four decades.
We just finished a 39 year bond bull market - interest rates bottomed in 2020.
Time for a protracted period of higher interest rates & inflation.
But why do I not see higher interest rates in my savings acct?
Because you're allowing your bank to screw you by not moving your money somewhere with higher yield.
Brokered CDs maturing in <1 year are yielding 5% right now. There are also money market funds yielding 4+% if you need liquidity.
Misesian?
The Austrians offer some interesting insights but to understand econ you really just need to understand how people make choices and apply that understanding consistently (there is no need for fidelity to a school of thought). If you mislead people via manipulated prices, particularly interest rates, they make choices which will prove unsound at some point in the future, for example. That is fundamentally why cycles occur. I'll be delving into the matter in considerable detail on my Substack in the months to come, as we head into painful financial conditions.
But what you have described is the Austrian "boom bust cycle". https://fee.org/articles/austrian-economics-is-essential-to-understand-booms-busts-and-money-itself/
The reserves of Custodia Bank, run by Caitlin Long, are 108%. But when she applied for a master account with the Fed, the application was denied for no apparent reason other than the unstated fact that the bank would be friendly to the crypto and tech industries. Or perhaps the regulators don't really want banks to be fully funded and operated outside of the established and accepted Ponzi scheme.
Celsius had a better balance sheet than Bank of America and Chase...
Seen elsewhere: "Almost as good as cash!"
meltdown = CBDC
CBDC is just a vehicle, to buy time and reallocate to hard assets, allowing them to call their chips from the NWO "dealer" before the people figure out the chips are worthless.
Edit: same result; meltdown
The people will just go along with CBDC. Just like they did with everything Covid. It’s like the end of the body snatchers, you know what they are doing, but everyone is already changed. You will own nothing and like it! It’s a nightmare for those who haven’t fallen asleep!
And those of us who don’t want to go along won’t have a choice.
It's like when the Blob of covid plague came to town.
"whatever it is, it’s 20 times heavier than a boot!"
In this scenario what happens to my own assets that have debt against them? Sorry if it's a dumb question. Not an economist lol
Pay them off as fast as possible and find hard (fixed) assets.
Or leverage for fixed assets.
Now is one of the few times being illiquid with hard/fixed assets is probably a good move.
What exactly is a hard asset. When I looked up the term I see machinery, trucks, equipment. But to me this would be somewhat dangerous if there is no gas, gas is extremely expensive or if it runs on electricity but no electricity.
Right now mere mortal me is retired. We have diversified as much as we can and the only improvements we are making are to the land. A second water source (rain) retention just because we are on a well and we are in a drought area.
I do have food stocked up, looking at water to somehow stock up but really until it truly once and for all hits the fan, you don’t know what you need until you need it.
The real question is, have you stocked up on PBR?
PBR, where I am from originally would be Pabst Blue Ribbon beer. The absolute worse beer in the world. Even college kids don’t drink it.
For me stocking up it is yarn. I can knit socks, shawls, sweaters for trade.
Someone with his priorities right! Lol!
Lmao
Manual tools for building n woodworking, mobile filtration for water, sustainable ecosystem for your home farm, common type of ammo, some batteries.
I have been buying manual tools. Stocking up in saw blades, etc. I am looking for a trundle seeing machine. Already stocking up on needles and thread. Looking at buying a Berkeley water system.
Thank you.
You are well ahead of the game...plus what Peter below says.
So would paying off fixed asset debt take priority over credit card debt even though the interest rate is lower? From a worst case scenario bank crash reality it seems like consumer credit card debt won't really matter? If that makes sense?
If you don't pay your credit card debts you wreck your credit and build up a snowball of fines and interest. Eventually the CC companies will play "Let's make a deal".
If you don't pay your mortgage, property taxes or car payment you've got other problems, like homelessness or lack of transportation.
all defaults and bk's should be strategic.
It doesn't hurt to plan for the worst case scenario.
I'm saying that if the pooh hits the fan, it would be better to leverage your credit for durable/fixed assets and let the creditors squeal trying to collect from everyone who would be crunched in what I think is the inevitable: Economic Winter
I would be good to own hard assets priced in today’s already inflated dollars when down the road those assets will cost even more than they are today, if you can find them, and most likely far more expensive and cost even more inflated dollars ( or central bank digital currencies)
Good advice from RG
And as always, cash it king. At least you can pull in 3.5 - 4% interest in a simple savings account right now.
As this next crises unfolds lending will get tighter and tighter and pull down asset values, especially the sacred housing market which is driven by low-interest, easily obtained, and highly leveraged mortgages.
"At least you can pull in 3.5 - 4% interest in a simple savings account right now."
*blink blink*
FTA: "The national average yield for savings accounts is **0.23 percent** APY" [emphasis Pi's]
Cash _should be_ king. It's not. Banks can make more mony selling bad loans and being reimbursed by The Fed after the fact.
https://www.bankrate.com/banking/savings/average-savings-interest-rates/#:~:text=National%20average%20savings%20account%20interest,ll%20earn%20on%20your%20savings.
Anyone who still keeps any substantial savings in a 1/4% yield account deserves what they get -- nothing. Your Bankrate link lists many 4%+ options and no minimums.
6-month T-bills were yielding >5% a week ago, and will again soon.
CDs can be purchased thru brokerage accounts which have higher yields than those same banks offer their own customers.
You Swearsies?
Past performance is no guarantee of future results....as in possibly no future.
Other than that take it to the bank after you consult your financial advisor...;)
I expect more from Ryan "ubiquitous stacker" Gardner. That sounds like a 26 yo FA from Fidelity. Stackers more in-tune than any FA I talk to. FFS, they even have 20+ Mil to manage. dolla go splat.
Gregory Mannerino has a daily commentary that I find very interesting and educational. His POV is that the activities of the central banks are not due to insanity or some kind of mysterious incompetence. Rather, they are deliberately calculated to bring about this situation in which they are becoming the buyers and lenders of last resort, from which it is a short hop to arrive at the position of owning everything. You just tootle along with your normalcy bias, trying to honorably make your payments while they choke off the economy and drop everybody into free fall in which they have no way to make things work. He recommends betting against the banks by “becoming your own central bank” by acquiring gold, silver, and other hard assets, as well as some crypto. He doesn’t talk about storing food and planting a garden but I would say that is obvious as well. Means of self defense ditto.
This has happened before so anyone who thinks you're a conspiracy theorist is just plain old ignorant.
Jackson vs. Biddle
https://www.britannica.com/event/Bank-War
"When the bank’s federal charter finally expired, Biddle secured a state charter from Pennsylvania to keep the bank operating. But in 1841 it went out of business, the result of faulty investment decisions and national economic distress."
Read that. Biddle was only successful when he had a monopoly granted via .gov. Now think of all the people who claim to be our betters today. They're all just Nicholas Biddles. We take away their .gov support and they'll fail.
The things that oppress us couldn't exist without a compliant monetary power that gives them favorable loans and lets them buy up all competition.
I keep seeing the ads for gold but still don't know how owning it would work. Buy a good safe and fill it with gold coins? What do you do when you need a quart of milk? You can't really take a twenty dollar gold piece to the grocery store. I assume you have to keep some cash at home or in a checking account and draw down some of your gold from time to time. Where do you swap it for cash? Your local gold dealer? Seriously asking.
Just do a bit more research on it all, especially security, how to hide it, how to verify that you are not buying tungsten plated with gold etc. etc. when you need a quart of milk you would trade a little gold for a lot of silver and use silver or some other stuff to make a deal for your groceries. It looks like we are moving rapidly to a hyper inflationary scenario. Bitcoin (traceable) and Monero (non-traceable) are going to be helpful things to gain facility with imho. I think, where we are heading, your local grocery store might be happy to take your 20 dollar gold piece , hand you the keys, and run!
I suspect that when it comes down to a situation that dire, you'll be bartering for a while. I told my dad to have toothpaste, shampoo and other ordinary items on hand because they're easily tradable for stuff like milk. But we don't really know what a world like that would look like and for how long. Small denominations of metals like gold and silver in your possession would also be helpful, but I suspect we'll still be using paper currency as Zimbabwe does and as the Wiemar Republic did.
I’m going with idiocy, incompetence, mendacity and diabolical control because that’s what government is good at and how else do you explain SOFR?
If you have a fixed rate, it shouldn’t change. But will you still have a job to pay it is the question.
Um. hmmm
Good point.
I dunno about CBDCs - that would put companies like Visa, Paypal etc. out of business. Lots of fees are currently made on transactions - that's a huge source of revenue that would suddenly disappear.
Imo, banks & payment processors will fight tooth & nail *against* CBDCs.
There it is!
I know about as much about banks as I know about quantum physics and statistical analysis program design, which is, it appears, exactly as they have intended. They have WAY too much power and hate the small depositors like me. This is NOT a healthy situation. When their $86 squintillion turns out to be another chimeracle fantasy it will be quite educational to see what is left after the entire world implodes. Meeeooowwww!
While quantum mechanics affects every little thing you do, its impact on your life is negligible despite your being unaware.
But if you have Checking and Savings Accounts, and a 401k, you're impacted. It's pretty much impossible to not be involved and impacted at this point.
Schrödinger's gato: The status and contents of your accounts are indeterminate until being actively observed by the gov-banking cartel.
The shifting probability curve of a U.S. Cypriot Haircut is truly something to behold.
*slow clap*
I think that's it. We simply won't know how much money we have until they tell us.
I think my grandfather's assertion that the bottom 10% of any graduating class goes into banking remains a truism for today. And sadly, they probably know as much about banking as I do.
All I know is, even in my limited knowledge, that Diversity/Equity/and Inclusion doesn't mean a thing in terms of banking. You are either a "good risk" or a "bad risk."
I had never before heard your grandfather's assertion, although it makes perfect sense. These are not Masters of the Universe by any stretch, they are more like a twisted Fraternity of insiders working against everyone on the outside.
Consider Barney Frank, co-author of the Dodd-Frank mess and then sitting on the board of the recently failed Signature Bank. What he seems to know about banking could be written on the back of a check.
Barney frank knows less than nothing about the actual way banking works. He only had the connections via being a crooked politician scumbag. They put him on that board probably as some sort of payoff. It also allowed the fat miserable looking old queer to get numerous hum jobs from slobbering young interns that would do anything to be inside the beltway. The guy is pure garbage.
"You are either a "good risk" or a "bad risk." "
Yup
Which is now determined based solely on gonads and melanin rather than FICO or net worth.
Because that worked out so well in the last housing bubble.
Dumbasses and crooks in charge, everywhere you look. And if you stand up and say “Enough”, you’re the crazy one. These highly credentialed buffoons put themselves and us into this mess. This is the culmination of a series of hubris driven experiments that each demonstrated that it was a bad result, and then these asshats did it again until the cake was baked. And the cake is baked. There’s no way to fix this without pain. But the buffoons get re-elected and reappointed and the banks give them donations and they scratch the bankers’ backs. And now the biggest financial mess in the history of the planet. They will temporize. They will try to keep the system from collapsing. They won’t keep jacking interest rates. Total banking system collapse means precipitous societal collapse. Slower collapse via inflation is what they will choose. Less messy. Less obvious. More cover while they sneak out of town and let the next guy deal with this mess.
The legalize there theft, that’s the way the games played. You hide a few shekels from them they’ll sic the full force of the government on you. Meanwhile, they just keep the spigot open for themselves. Feasting off our backs. Pure scum, the whole lot of them.
Yep.
Excellent but you forgot the escape hatch ... world war .
an interesting observation, but one that i doubt can really help us here as it did last time.
keep in mind that it was basically only the US that benefitted. everyone else got decades of deprivation. the US boomed because we had the only intact industrial base in a world that had just been flattened and we got to build everything used for rebuilding.
i struggle to imagine a scenario where that could occur today.
Sorry, but WWII did not help. Getting back to somewhat normal market forces, combined with a totally destroyed Europe which needed to purchase massive US goods, is what did it. "WWII got us out of the Great Depression" is as wrong as saying "FDR's New Deal got us out of the Depression."
Second this. I’m surprised to see the gato suggesting otherwise.
Gato was likely referring to the fact that WWII "helped" make the US the global hegemon, basically supplanting the British Empire, not that it "cured" the Great Depression, which all informed people know is just a leftist fairytale.
The Evolution of Europe's WW III is also undermining this Crisis
Unless so many people become disabled or handicapped or die or aren't born. Enter "Covid vaccine."
Whilst bankrupting countries like the UK for the next 60 years or so by making them repay debt
Gato, isn't that the plan for Ukraine? I think we have companies that already have contracts in place with Zelenksi for rebuilding.
You know what could possibly be more cataclysmic than war?
When countries who are rich with natural resources turn off the spicket and give the "Big Bird" to creditors
Or their adversaries blow up their undersea pipelines, thereby turning it off. And the adversary then sells its own resources to the former recipients of those pipelines while starving its own (exploding) population.
The US blew up Nord Stream 2. The US is selling off our reserves. 🤔
And most either aren't aware or don't care.
Tell me again how it's "green" to ship -- on diesel-burning tankers -- our natural gas to Western Europe to burn instead of burning it here at home? Or the opposite, strangling the domestic fracking industry and importing oil from Saudi Arabia? Truly crackhead logic.
Don’t try to make sense of it . You might like my latest post on substack.
That would simply lead to war, wouldn’t it ?
How are you going to wage war without natural resources?
I'm pretty sure that if things go savage enough, we'll resort to sticks, stones, hands, and feet.
We had weapons and the means to wage war long before it was government subsidized.
Yeah and eating each others appendages!...:)
Yea, I wouldn't try taking a bite out of the right arm of the free world...
https://imgur.com/doRxaFy
That sounds more like "Gender Affirming Care" to me.
But people need to have working hands and feet to use those sticks and stones. Post-jab, 5G, chemtrails, self-spreading "vaccines" it's hard to fight back when your body is wrecked.
"All right. We'll call it a draw.'
https://www.youtube.com/watch?v=6frs86Szk_0
Big Guy's goal - subjugation. Remember he said "China would own us by 2035?"
From the WEF pages - A "coincidence" or "conspiracy theory." https://www.weforum.org/agenda/2019/10/cities-in-2035/
Jumping to the WEF isn't the proper way to think but it IS the way to acknowledge how Democrats and hapless RINOs take charge. Act first - make everyone sue to get back their "God-given" Constitutional rights.
But probably, yes
“Global South “vs The U.S. led coalition of feeble.
Reality is gas and oil and coal and food production. Extractive industries. Farming. Not windmills, cow fart restrictions, and pronouns.
And if China, Russia, NK, Iran, Venezuela all start kinetic conflicts on whatever scale against us, it will hamstring the military. The EU is useless. They won’t even chip in 2% of GDP to defend themselves.
Have a super Biden day! 🙄
nailed it
They only want the fear of a hot war - they're addicted to fear porn. We are actually at war, with "our" government against we the people. "Coincidentally" it seems to all be the WEF/UN/WHO agenda to install tyranny, one world government (not ours) and the destruction of Western countries.
Easy. If no one owns anything, all debt is cancelled. Then you start from scratch with CBDCs and UBIs to stop the screaming. Won't we all be so happy!!
Most people refuse to acknowledge the consequences to collective actions so long as they can maintain a comfortable status quo in their head.
When CBDC’s are offered as the government “savior” solution, most will buy into the concept hook, line and sinker. From there, it will be bug-filled hot pockets and rented everything.
But hey, we’ll all be “happy”!
Looking forward to all that free time !
I've read that our ancient cave-dwelling ancestors only spent about 15 hour a week providing for their basic sustenance. Plenty of leisure time!
Of course there was that whole Dissentary thing. And a random Smilodon could mess with your afternoon nap schedule.
"There are no solutions. Only tradeoffs."
- Thomas Sowell, Really Sensible Smart Guy
Lol! I love Sowell. And I love bacon and electricity and owning my own land. I hope things don’t fall apart. 🙏
There are two kinds of people in the world--people who love bacon and sad people. 🤣
Fact check: TRUTH
"And I love bacon and electricity and owning my own land."
These days this that's enough to get me to vote for you just for saying that out loud.
Others will call you a kulak.
And the Bolsheviks can fuck off.
*pumps fist in air*
Vote for Me! Bacon in every pan! Can Trump promise that?? Does Vivek even eat bacon?
"Bacon in every pan!"
WINNER
Agree.
Those with hard assets are the only folks who wouldn't be starting from scratch.
Hell, in that scenario it might make sense to debt lever hard assets.
I would expect that holding onto those hard assets would become more difficult if not impossible under this regime. They are already beginning this with forced-density housing and undermining local zoning laws to essentially eradicate the concept of single-family housing.
Imagine owning your home outright in a decent neighborhood with decent schools, when the government suspends zoning restrictions and within 5 years your neighborhood is flooded with multi-story Section 8 housing filled with Section 8 housing *dwellers* who have no concept of ownership or care? There goes your asset value.
True. And that is slowly being done already . Not in my backyard only works for the rich. We will find out what it was like for the poor who lost their homes when new highways were built, and when indigenous people lost their land. Guns and ammo, baby . Go down in a blaze of glory .
Exactly correct. It will be middle working class neighborhoods that this will happen to.
Ah never mind . I asked AI, lol. That’s exactly what I have been thinking. I have good credit so I should buy hard assets.
If you ask AI too many questions it may inform the boots to show up at your door...or worse it just turns you "off"...kaput
What does debt lever mean ? And my family of mechanics has buying vehicles and metal and stockpiling all the stuff people don’t want to fix .
You might pick up a copy of “The Wood Gasifier’s Bible” so that when they try to choke off your diesel access you can run your equipment with the volatile gases given off wood combustion.
My dad, who grew up in the depression told me about how the stills didn't just make drinking alcohol, but also ran the tractors- arguably one of the reasons for prohibition.
I bet to some folk a 1919 John Deere is looking really good right now.
These days it's more akin to the Eject lever in the cockpit of an F-16.
lever your credit in the form of debt to buy fixed assets, if the times call for it.
Which they very well could in the near future.
It's always best to consider the worst case scenario when financially planning for the future.
"Ihren papiere, bitte."
Ist für Ihre Sicherheit
"Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety."
- Some guy named Ben
"D'oh!"
- Some guy named Homer
If this happens, black markets will be everywhere. Better have some commodities on hand. Digital currency will cause the most human suffering ever seen.
Agreed. I was being sarcastic. I'm preparing for the worst and hoping for the best.
CBDCs are a bigger joke than cryptos.
BidenBucks! What is there not to like? Come on, man! You know the thing?
LOL
'regulators asleep at the switch and regulating the last crisis (which quite possibly causes the new one), opaque banks holding teetering piles of god knows what, implausible accounting rules that lead to sub-optimal or outright dangerous behavior, monocultures of risk management, and the sudden rediscovery of a variety of kinds of risk from duration mismatch to counterparty non-performance to arbitrary edict by regulators and central bankers that preferences some over others in a manner predictable only by political connection, not some known and knowable rules of commerce and unwinding.'
There is zero difference between the government reaction to the banking crisis and its reaction to the covid 'pandemic'. Rules and regulations are meaningless. The government simply changes them or ignores them.
why would there be?
it's the same governments.
Yes, while endlessly and sanctimoniously intoning the shibboleths The Rule of Law™ and No One is Above the Law™.
"No One (except our political allies) is Above the Law"
"Somebody do SOMETHING!!!"
You forget option #3.
War.
Is the stupid cabal running the USG truly insane enough to pull that lever and start a hot war with Russia? They've been tapdancing ever closer to the line over the past year, and now that they're well & truly stuck in the coffin corner, there's a nonzero chance they really do say, "Screw it, let's go," and pull the trigger. Burn everything down all around them, bury their misdeeds under the carnage. They don't think it'll be them suffering the fallout, not really. Just we plebes.
"May you live in interesting times" as the saying goes.
Yes, they are that reckless.
"or maybe “wow, if we get this wrong by 0.16% we’re bankrupt” is a level of leverage you do not want your savings or your economy anywhere near."
And THIS is why all $431.23 I have to my name is saved, along with a couple of guitar picks, a hip flask of Jefferson's, and a picture of Rosebud, in a shoe box under my Sleep Number.
You'd be wise to do the same.
And US citizens and residents, and anyone who gets paid in dollars and transacts in dollars, is way up the world Cantillon pyramid. Americans think things cannot happen here which not only can, but are likely about to, at least in the attempt.
since feb 2022 the fed took $600B in t bills and mortgager based security off its balance sheet.
last week it put $300B back on its balance sheet!
the banks should not be covering deposits with long duration us treasury bills. i have shunned long "notes" for over a year now...
but the biden administration is bailing out the silicon valley depositiors!
so every other bank now has e post facto moral hazard protection!!
the grown ups are in charge
no mean tweets and no one hurting anyone's feeling over their ineptitude or vice.
We own our house and vehicles outright, but we'd really like to buy land since we live in town. I don't want to sell our current home, but I don't want to be unable to raise what we eat either....
I wish I knew how this was going to play out so I could know what to do.
Current home sale wouldn't completely pay for land, there would HAVE to be a mortgage.
I’m in the same situation- own my home but no place to raise food. Maybe one can lease part of a farm and work cooperatively with the farmer? Would need to be a secure arrangement so you’d not get abandoned in a crisis.
If you do not have any real experience gardening, I can tell you from personal experience that it is not an easy and sure way of putting food on the table. We ALWAYS had a garden when I was growing up--we were organic before organic was a thing. It's a lot of hard work, you have to be at it every day. The best that you can hope for is that it will supplement, not replace, your grocery bill.
Unlike the grocery store, which generally has produce available year round, a garden only produces certain things at certain times. Some earlier than others. If you are relying on a garden you have to be aware of this. You just can't run out to the garden and harvest green beans or corn if they are not ready--or if they are done. Some things produce abundantly and others hardly at all. And of course it depends very much what kind of soil you have, what kind of rainfall you have, what kind of sun/shade you have. It really is not easy at all. Looking back at our family garden, as large as it was, it was not enough to support the six of us 100% of the time. We still had to go to the grocery store.
And then there is preservation. Canning, Root Cellars, etc. There is a lot more to it than land and seeds.
Yes, I didn't get into that. My mother did a little canning, but we really didn't have that much surplus.
What really gets me is these people who say that if you live in an apartment you can container garden. No, you cannot, not on any sustainable basis. What container gardens are good for are things like herbs and lettuce that don't take up much room. Again, a nice supplement and a change of pace, but no substitute for bought groceries. When I think about the variety of things we grew, corn, beans, peas, beets, lettuce, squash, eggplant, tomatoes, peppers, potatoes, cabbage, these are not things that can be grown on an apartment balcony. And as I said, it helped with the food budget but we could not live on our garden alone.
And carrots and onions, I forgot them. We probably grew around 15 different kinds of produce when you add it all up. I do miss the family garden but where I live now it's just not practical. The soil's wrong and I have too much shade.
I had some bumper crops at a rental over a decade ago. I've been at another place with more land for 7 years and cannot get a reliable yield. There's a lot of variables and people act as if it is a 'no-brainer'.
I’m thinking the best thing for most is to stock up on preserved foods in case of emergency. I normally keep 2 weeks supply for earthquakes as I live in CA. But need to expand for longer time in food shortages. Plus cash, etc to barter.
We have decades of farming/homesteading experience, we just need the right opportunity to buy (with a downpayment from our cashed out 401K). I trust my family and our ability to grow quality food, I think this is the future for us. I hope you can find your perfect situation too!
Amish moving South, some to Kentucky, maybe you can set up a sharing deal.
We've lived where Amish were before, in Ohio, there are definitely benefits but when push comes to shove don't look to them. Many, MANY of them are sold out to big pharma and reliant on cheap imports from China. It's easy to idealize them, but they are far from homogeneous and many if not most are so far removed from the land, they barely garden, take KFC to get togethers etc.
The old adage holds: Know your farmer!
Don’t sell your house yet. If you can get a loan for land, do it. But don’t use equity from your house. Just my opinion. Wait til the market crashes and prices drop.
We can cash out our meager 401k for a downpayment, so that's the tentative plan right now and so much the better if prices drop, but we're in TN and people are flooding here driving up land prices.
You may be able to borrow against the 401K instead of cashing in, or just take the tax hit now and cash in.
There may also be communal land/gardens you can work.
TN is on fire but not sure that'll last forever.
My husband is 55 this year so as long as he gets another job we can just cash it out. That's the plan as of right now.
Your 401k is probably in danger anyway. Will it be enough to pay cash for land ?
It's been steadily and slowly growing, it's a downpayment but nothing more than that.
That's why I won't go east.
Well for one, I grew up in the midwest and do not think of it as a literal garden of eden. But, as a person who is being priced out of the market by useless tech migrants, I can't see dropping that on others.
"I wish I knew how this was going to play out so I could know what to do."
That's why they call it 'speculation.'
The cool thing is, now we know that your guess is pretty much as good as The Industry Experts so you're bound to do at least as well as they have. It would hard to do worser!
The 'experts' will generally do-better because they're playing with other people's money ... Where as, you/me/we are betting with our own hard-earned ...
Subsidized behavior ALWAYS becomes reckless, dangerous, destructive behavior.
And more frequent.
"but at some point, far enough from the wellspring of made up money, this flip and you become a bagholder who is losing wealth. and this cycle rapidly accelerates as people get used to it. you wanna get that cash out of your hot little hands as fast as you can before someone else inflates it away. it’s a race to the bottom."
Stated differently:
When BigFed prints $$ they're just stealing your savings to pay off the debts of the well connected who invested poorly.
Exactly! We seem to be in some kind of insane race to achieve Weimar level inflation. With a high degree of probability of the same result.
"We seem to be in some kind of insane race to achieve Weimar level inflation."
And you couldn't have Hitler and The Third Reich without Weimar.
*holds chin between thumb and forefinger*
This isn't good.
I remember talk of Credit Suisse wobbling badly 5-6 years ago. I don't know how they patched that over. Surely it made it worse, since the takeover terms now are "you get nothing". For the last few decades, Deutsch Bank has been hollowed out because it was carrying the sketchy debt of southern European countries. Now the US has sucker-punched Germany with sanctions blowback.
I'm not surprised that banks are failing; I've been thinking they would for decades. My eternal surprise is that they have kept the charade going for so long!
What a financially and economically astute article! One of the best I've read here.
One further point you make implicitly that deserves emphasis is that when there is no disincentive to make bad loans, there is also no *incentive* to make good ones. That means capital and credit stops flowing preferentially to the firms that would put it to good use. "Good use" means producing things people need and being useful generally. So the result of the scenario malo gato describes isn't just the obscene enrichment of elites and the impoverishment of everyone else, it is also breakdown of basic production and services.