So have you really been watching the bank failures? Do you know 3 banks have failed in less than a week? Do you know that 2 of the 3 bank failures were the 2^nd and 3^rd largest bank failures in US history?

Something to think about…right?!

So a run on withdrawals sank Signature Bank over the weekend. Too many people transferring money out of their accounts simply dried up all the bank’s cash reserves. Come Monday…Signature Bank simply didn’t have enough cash left…bust, out of business. Well, not quite…they were taken over by the US government.

So why didn’t they have enough cash on hand? They had met the federal guidelines, so what was the problem?

When cash starts to dry-up, banks have to sell assets to raise cash. The main liquid asset they sell are their Treasury Bonds due to high liquidity. But, banks were forced by the federal government to buy Treasuries back when the rates were extremely low, some even yielding 0%. Well, you go to sell a bond paying 0% – 2% when the bonds are currently at 5% – 6% the lower interest bond has to be sold at a discount…some sometimes marking down that bond to 80cents on the dollar, sometimes more. And that destroys the bank’s balance sheet and begins to dry-up their liquidity.

Let me make a couple personal observations:

1. The US government highly regulates the banking industry through laws and regulations.
2. The Federal Reserve (under authority from the US government) highly regulates the bond markets, the interest rates, and bank liquidity…through laws and regulations.
3. #1 & #2 effectively make banks virtually an extension of the US government under the US Treasury Department.

So tell me again who is primarily responsible for the bank failures?

But it gets worse, the FDIC is meant to insure bank account holders under $250,000. But now Biden has announced a scheme (without details) where no account holder in the failed banks will lose their money…effectively insuring ALL accounts. Well, that may sound good…but what is the outcome?

And just a side note: about 90% of all money in SVB was not covered by FDIC, meaning they weren’t insured and stood to lose all their money. But, Biden stepped in to make sure there were no loses at all. And here is the interesting part…those not covered by FDIC were large corporations and very rich individuals. So Biden makes sure he takes care of the rich…even at the expense of working class taxpayers.

Spreading out the “failure” to the entire nation/industry is almost the perfect example of outcome equality. And outcome equality is a principle direct from Communism/Socialism.

Capitalism, or freedom, means that those that made poor decisions would be responsible and held accountable for those poor decisions. Which makes all the sense in the world…freedom and responsibility tied together…the entire basis of “agency” if there ever was one.

But the United States government, in regards to the banking industry, controls how the banks do business, the government controls the economy in which those banks operate, and now the federal government insures that no one loses should a bank fail. Does that make you pause and think just a little bit?

To me it means this; 1) banks have essentially been nationalized, 2) the banking system is now operating solidly under Communism/Socialism principles, 3) there is no good outcome from this mess.

Couple more things to think about in my own head:

• The #2 & #3 largest bank failures in US history…were operating under ESG principles.
• About 70% of all businesses have revolving lines of credit that will be rolling over this year…at interest rates 2 – 6 times what they were paying previously.
• All forms of debt are at historic highs.
• A bank rating company just placed the following 6 banks on a “watch list”: First Republic, Western Alliance Bancorp, Intrust Financial Corp, UMB Financial Corp, Zions Bancorp and Comerica Inc.
• Another watchdog company states that there are 20 more banks that are on the brink similar to SVB and Signature.

Please, I am asking you to think this through and make decisions that are right for you and your family. Please think what you need to do to protect you and your family from the financial problems hitting our economy right now.

Pray for our country, our people, your neighbors…we need prayers.

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