Aftershock!

Why Bank Crisis Will Continue [The Daily Reckoning] March 27, 2023 [WEBSITE]( | [UNSUBSCRIBE]( Aftershock! - “Anyone who thinks the banking crisis is over has never lived through one”… - Why do these people still have jobs?… - Not a rescue, just a bandage… [Patent #11,219,620: The Most Valuable Patent In History?]( I believe this could over time become the single most valuable patent in history. That’s because this patent is just some of the exciting work being done by a company which is developing treatments for one of the biggest and most common diseases in America… A disease which impacts 54 million people, or about 26% of the adult population in America. Whatever you do, do not let this opportunity pass you by… [Click Here For The Details]( Portsmouth, New Hampshire [Jim Rickards] JIM RICKARDS Dear Reader, Anyone who thinks the banking crisis is over has never lived through one. This is my tenth, starting with Herstatt. And this one is just getting started, despite all the happy talk that the crisis is over. Let’s dive in… The litany of recent bank failures has become all too familiar. It began in early March with the bankruptcy filing of Silvergate Bank. Silvergate was not just another commercial bank. It was a traditional FDIC-insured bank, but it was also heavily involved in the cryptocurrency world. It was known as a crypto bank that would lend to crypto exchanges and crypto hedge funds and act as a portal between the dollar system and cryptocurrencies. Silvergate was a casualty of chaos in the crypto markets that began with the 76% collapse of Bitcoin prices between November 2021 and November 2022. It then soon spread to the failures of Three Arrows (a crypto hedge fund), Genesis (a crypto exchange), USDC (a stablecoin that “broke the buck” and fell to $0.83) and the mother of all crypto scams, FTX, which may be the greatest financial fraud in history. You remember that, right? It seems so long ago in light of more recent developments. Silvergate was the carrier that spread the crash virus from crypto to traditional banks. The next victims were Silicon Valley Bank, Signature Bank and Credit Suisse. More are on the way. SVB Means Big Trouble The magnitude of the failure of Silicon Valley Bank (SVP) in particular can hardly be overstated. This was the largest bank failure since Washington Mutual during the global financial crisis in 2008. Initially, over $100 billion in bank deposits were vaporized by the Federal Deposit Insurance Corporation (FDIC) on Friday, March 10 only to be reinstated 48 hours later on Sunday, March 12. As you probably know by now, this completely demolished the $250,000 limit on insured deposits that the FDIC is allowed by law to protect. Never mind. The Federal Reserve, U.S. Treasury, FDIC, and the White House together declared a systemic emergency, which allowed the FDIC to protect the full amount of deposits. Some companies had over $3 billion on deposit with FDIC. SVB depositors included major corporations such as Cisco, Roku, Vox and many other giants of Silicon Valley. [Secret Gold Back currency RUINING Biden’s plans for a digital dollar?]( [Click here for more...]( What I’m holding in my hand is a completely new form of money… As we speak, it's being used as an alternative currency across the U.S. minting in places like Utah, New Hampshire and Nevada… And since it’s made out of a thinly printed sheet of REAL gold... It may be the single best way to protect your wealth from Biden’s plan for a government controlled digital dollar. That’s why, I want to offer to send one to you today. But since I have a limited number I need you to respond to this message by Wednesday at midnight. I’ve recorded a short 2 minute message that explains everything… [Click Here To Watch It Now]( Don’t Forget the Politics These Silicon Valley giants were all protected even as citizens in East Palestine, Ohio, received little or no aid after a train crash that led to the creation of a mushroom cloud of toxic chemicals and dioxins in the water. Let’s face it: It didn’t hurt that the SVB depositors were mostly Democrats. It didn’t help that the residents of East Palestine were mostly Republicans. That’s just how the White House rolls. That kind of political favoritism isn’t new, by the way. During the New Deal, federal aid to states often depended more on political calculations and electoral politics than on actual need. In any case, the lead regulator of SVB is the Federal Reserve. In addition to the failures of risk management inside SVB, there were clearly massive failures of regulatory oversight by the Fed. In true Washington style, the Fed has done nothing to terminate or discipline the officials responsible for this failure, starting with Michael Barr who is the Fed’s vice chair for supervision. Why was Barr not removed from office immediately after this historic failure? Washington is the one place where people fail upward. “Hey, We Knew It All Along!” Instead, the Fed has ginned up its PR machine by pretending it was on the case all along. “Silicon Valley Bank’s risky practices were on the Federal Reserve’s radar for more than a year” prior to the “bank’s demise,” The New York Times says. Really? Those practices included “doing a bad job of ensuring that it would have enough easy-to-tap cash.” SVB was also rated by the Fed as “deficient for governance and controls.” So what happened next? The answer of course is nothing. The Fed sent a few warning letters and that was it. Why was the bank not taken over when these cash and control defects were spotted? At a minimum, why was management not replaced and immediate remedial steps implemented? Again, the Fed is trying to spin these warning letters as showing they were on the case. In fact, they show the opposite. The impression is one of bureaucrats going through the motions and doing nothing of substance. In the middle of this bank run was the strange case of First Republic Bank… [Crypto Legend Reveals: “The Next Bitcoin”]( He called Bitcoin at $61. Now he says this next crypto will be even bigger. In fact, he’s targeting 25X gains over the next year alone. [Click Here To Learn More]( Yes, It’s a Bailout First Republic is clearly under financial stress due to fleeing depositors and underwater long-duration assets. But it has not technically failed. Instead, it was rescued by a consortium of 11 solvent banks putting up cash to bolster First Republic’s liquidity. The banks were JPMorgan Chase, Citi, Bank of America, Wells Fargo, Morgan Stanley, Goldman Sachs, PNC Financial Services, U.S. Bancorp, Bank of New York Mellon, State Street, and Truist Financial (formerly SunTrust). They put up a total of $30 billion. Although the Fed was overseeing this rescue, all of the funds were from private banks. So technically it was not a government bailout. Interestingly, this rescue bears a close resemblance to the 1998 rescue of the hedge fund Long Term Capital Management (which I negotiated). That rescue was also encouraged by the Fed but was actually conducted with private funds. The money came from a consortium of 14 banks, including at least seven of the banks in the First Republic rescue. Both the First Republic rescue and the Long Term Capital rescue were based on John Pierpont Morgan’s rescue plan devised during the Panic of 1907. To this day, that’s still the best playbook if you want to end a financial panic without using government money. Delaying the Inevitable Still, there’s one critical difference between Long Term Capital and First Republic when it comes to rescues. The Long Term Capital rescue was all capital, no debt. The First Republic rescue is all debt and no capital. Huge difference. That means it’s not really a rescue; it’s just a cash bandage. That can buy time, but it’s not the end of the crisis. They just delayed the day of reckoning, that’s all. Banking crises move in multiple stages with some quiet periods between. Don’t let those quiet times lull you into a state of complacency. You’ll be hearing more about a real First Republic bailout in the days ahead. And it won’t be the last. Regards, Jim Rickards for The Daily Reckoning [feedback@dailyreckoning.com.](mailto:feedback@dailyreckoning.com) P.S. [There is a secret currency that’s beginning to spread across America.]( It’s almost like an underground movement. It’s a way people are fighting back against the Fed and its monopoly on money. It involves gold. How would you like to claim one of these [“Gold Dollars”]( for yourself? [click here for more...]( And since it is made out of REAL gold… And since you’ll be getting it as part of an upgrade I want to make to your account… You’ll be receiving one of these [“Gold Dollars” as a FREE gift.]( You just have to watch this short 2 minute video I recorded for you and [respond by Wednesday, March 29th.]( Just to be clear: If you don’t respond, you’ll forfeit this offer and these “Gold Dollars” may be gone for good. So please don’t procrastinate if you want to get your hands on one. [Click here now for details.]( Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:feedback@dailyreckoning.com) [Jim Rickards] [James G. Rickards]( is the editor of Strategic Intelligence. He is an American lawyer, economist, and investment banker with 35 years of experience working in capital markets on Wall Street. He is the author of The New York Times bestsellers Currency Wars and The Death of Money. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your The Daily Reckoning e-mail subscription and associated external offers sent from The Daily Reckoning, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@dailyreckoning.com. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. 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