Yes folks, that statement is 100% accurate. Three of the largest US bank failures in history occurred just six months ago. So what changed since then because it’s crickets according to mainstream media when it comes to the safety of the banks? Well, it’s not silent on all fronts. We are getting plenty of news about Hunter Biden, Joe Biden, Donald Trump, Maui fires, hurricanes, Ukraine funding, government shutdown, migrants, auto workers, and vaccine mandates coming back. What about something that affects every single American to some degree in our everyday lives and especially our retirement years? What about the safety of the banking system and the safety of our money? Oh, that’s fine, it is FDIC-insured. Maybe that’s why it is so quiet when it comes to the problems the banks are in. Maybe the media doesn’t want to scare everyone away. Imagine what would happen if everyone started taking their money out of a certain bank. Oh, wait we saw some of that in March, and guess what, those banks were insolvent. What a surprise.
We already should know that the value of our money, or I like to call it currency, is bound to go down. Why would you say that you may say? Since 1971 our dollar has been backed by nothing, it used to be backed by gold. So as long as our wonderful politicians and central banks keep printing trillions of dollars out of thin air, the purchasing power of our currency continues to dwindle over time. Compared to gold, because gold is real money, not Federal Reserve Notes, our fiat currency always loses purchasing power. Actually, since 1971 our US dollar, now called Federal Reserve Note, has lost 97% of its value versus gold. But what about the safety of our currency in the bank or in our retirement account?
My statements and my online access say I have a balance. Oh, it does, that’s nice. But what are those digits anyway and do we really know what they will be worth or will they even be there in the future when we need them? If there is a run on your bank or your retirement company, will your money still be there when the dust settles?
Washington Mutual Bank failed in 2008 with $307 billion in assets
Washington Mutual Bank, often referred to as WaMu, was a prominent financial institution in the United States that failed in 2008 during the global financial crisis. On September 25, 2008, the Office of Thrift Supervision (OTS) seized Washington Mutual Inc., the holding company for Washington Mutual Bank, and placed it into receivership. The Federal Deposit Insurance Corporation (FDIC) was appointed as the receiver. 140 banks failed in 2009.
The failure of Washington Mutual was one of the largest bank failures in US history at that time. The primary reasons for its failure were the significant losses it incurred due to bad mortgage loans, particularly in the subprime mortgage market, and a run on the bank by depositors concerned about its financial stability.
Following the seizure, the FDIC sold the assets and deposits of Washington Mutual Bank to JPMorgan Chase & Co. for approximately $1.9 billion. This marked a significant event during the financial crisis and contributed to the overall turmoil in the banking and financial industry during that period. It’s quite a coincidence that the name JPMorgan Chase keeps coming up when it concerns scooping up banks that have failed. JPMorgan Chase often comes up when banking controversies arise. I’m sure we will see more of that very soon.
The Dodd-Frank Act of 2010 increases the likelihood of an eventual bail-in
The Dodd-Frank Act established the OLA, which allows the FDIC (Federal Deposit Insurance Corporation) to step in and unwind or restructure a failing financial institution in a controlled manner. This mechanism was designed to prevent the chaotic collapse of large financial institutions and ensure that any losses incurred are borne by shareholders and creditors rather than taxpayers.
The Dodd-Frank Act of 2010 aimed to reduce the likelihood of taxpayer-funded bailouts by introducing various measures to strengthen the financial system and enhance regulatory oversight. While it may not have eliminated the possibility of bailouts in extreme circumstances, it sought to make them less likely and better managed. So does the Dodd-Frank Act increase the likelihood that failed banks may use our money on deposit and do a bail-in eventually? In my opinion yes it does.
It’s OK the FDIC has my back and my deposits are safe
The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that provides deposit insurance for bank accounts. FDIC insurance is a vital safeguard for individuals and families who have funds deposited in banks, as it protects their deposits if the bank fails or becomes insolvent. FDIC insurance typically covers deposits up to a certain limit per depositor, per insured bank, for each ownership category.
The standard coverage limit is $250,000 per account category. The FDIC insures $12 trillion in deposits and has $120 billion in assets. What? $12 trillion seems much bigger than $120 billion. It doesn’t sound like the FDIC has enough for everyone to be insured. So the Fed and the government will just print all the money if need be when many banks fail? Well according to the Dodd-Frank Act of 2010 that is not supposed to happen. All of this talk makes me want to run to the bank right now and take some of my money out. It is my money, not theirs. Do they want our money to keep running their system? Yes, they do!
IndyMac Bank in 2008 was the 5th largest US Bank failure in history
IndyMac Bank, a prominent savings and loan institution based in California, experienced a significant failure in 2008. The failure of IndyMac was one of the largest and most notable bank collapses during the global financial crisis that occurred in that year. The bank’s heavy exposure to these high-risk mortgage products left it vulnerable when the housing market collapsed in the late 2000s. On July 11, 2008, the Federal Deposit Insurance Corporation (FDIC) took over IndyMac Bank. This marked one of the largest bank seizures in US history up to that point. This is small potatoes compared to the size of the financial institutions in trouble today. IndyMac Bank in 2008 had $31 billion in assets. I have a client’s letter in my office and it clearly states IndyMac kept $113,000 of her money in 2008 and sent her a certificate of ownership. 15 years later her money is still gone and she hasn’t heard a word. I doubt she ever will.
Three of the largest US bank failures in history occurred six months ago
First Republic Bank failed on March 1, 2023. First Republic had $212 billion in assets and was sold to JPMorgan Chase. Silicon Valley Bank went down on March 10, 2023, with $209 billion in assets. First Citizens Bank purchased the remaining assets of Silicon Valley Bank. Signature Bank went under on March 12, 2023, and took $110 billion with it. New York Community Bancorp bought most of those deposits. All of this seems very bizarre to me on many levels. The questions I keep asking myself are why did these happen and are the problems solved? I know for sure that the problems are not solved. Heartland Tri-State Bank failed in July. It was a small failure I guess nonetheless. Did you even hear about it? The folks who had their hard-earned money there I am sure did hear it loud and clear. What is it going to take for people to see how fragile the whole banking system still is?
Many banks today are lacking Tier 1 Capital
Tier 1 capital is a key measure of a bank’s financial strength and stability. It represents the core capital that a bank holds to absorb losses and maintain its operations in times of financial stress. Regulators and investors closely monitor a bank’s Tier 1 capital ratio as an indicator of its safety and soundness. According to Bix Weir who runs roadtoroota.com, there are many banks underwater on Tier 1 Capital. Some of these names include Cullen/Frost Bankers, UMB Financial, Glacier Bancorp, Prosperity Bancshares, First Financial Bank, Commerce Bancshares, Zions Bancorp, Popular, Fifth Third Bancorp, KeyCorp, Truist Financial, BOK Financial, Regions Financial Corp, Comerica, Webster Financial, First Citizens Bancshares, Synovus Financial, and many more.
Does this mean they are going to fail? I don’t know because I am sure failures that happened this year were not on any lists. The fact of the matter is if these banks have to realize losses sitting on their balance sheets as unrealized today they will be insolvent. Most are underwater on their bonds and commercial real estate. They are insolvent in this situation when the majority of depositors want to take their money out. When many people show up to these financial institutions and want their money, the banks have to sell their losing investments and realize losses. Bank runs today can occur online and on our phones. Billions can leave these banks in hours. This is much different than bank runs in our history where people had to show up at their branch to pull their money out. It is all electronic today and the physical cash that people may demand is simply not all available at any given time.
Paper IRAs and paper market investments are all subject to these bank failures
The banking situation will be made worse by the amount of derivatives out there. We are talking a quadrillion dollars of these derivatives. A bank derivative, also known simply as a derivative, is a financial instrument or contract whose value is derived from an underlying asset, index, reference rate, or other financial benchmark. Derivatives are essentially agreements between two parties to exchange cash flows or assets based on changes in the value of the underlying entity. Banks use derivatives for various purposes, including risk management, hedging, and trading. These derivatives are used by banks to manipulate and trade markets. As banks weaken, their ability to manipulate will also weaken. Losing derivative trades will inevitably cause more bank failures. More bank failures will also cause more derivatives to cause wild swings in the market. How else could oil be negative $40 a barrel? Expect volatility to increase substantially in the weeks to come as everyone tries to get out of the same barn door at the same time. It’s going to be quite a show.
Distance yourself from the banking system problems
The Savings and Loan (S&L) crisis, also known as the Savings and Loan debacle or the S&L bailout, was a financial crisis that occurred in the United States during the late 1980s and early 1990s. It was one of the most significant financial scandals in US history, involving the savings and loan industry, which was primarily focused on housing finance. The S&L crisis had far-reaching economic and financial consequences, including the collapse of numerous thrift institutions, significant job losses, and a massive government bailout.
If you look at the big picture today the banks have already collapsed. I know that is hard for most people to hear. They are just slowly walking the inevitable and collapsing a few at a time with the intention of a few big banks left standing before a digital system is rolled out. We have a fractional banking system. The banks are only required to hold a small percentage of our deposits. The rest is loaned out, invested, and used to falsely create much more paper currency. All of this feeds the central banking system and generates fees for the banks. The banks, the Fed, and the government have had a huge Ponzi scheme in essence going since the Fed was formed in 1913. It accelerated greatly in 1971 when the gold standard was eliminated, and now the mockery has gone exponential. The banking system and the government are drowning in debt and losing investments and the Fed has enabled all of it. Unfortunately, this time, because the numbers are simply just too enormous, the outcomes will inevitably be dire.
The government and the banking regulators have allowed the derivative market to get way too big. The banking sector has gotten away with thievery and manipulation for way too long. This has all been done in the name of ignorance, greed, and corruption. We all know who will be left holding the bag; it will be hard-working people who have tried to invest and save to just have a happy, normal life. Somewhere along the way financially it all got twisted. The idea of God, country, and family has been lost. Before we start fresh it has to get ugly and cleaned up first by the good guys. During that process, you don’t want to be financially destroyed. To be financially viable to participate in the next financial system requires tough smart decisions today. Physical gold will protect your wealth as it is the ultimate crisis asset. It always has been.
The idea that so many people are blind to the fact that the US just had three of the top four biggest bank failures six months ago in our country’s history is baffling. The idea that it is so quiet regarding what is coming up in the banking sector is even more outrageous. Politically, financially, socially, economically we are worse off than where we were back in March. More debt has been piled on and interest rates are higher now than they were then. One event is going to start an avalanche. One bank failure and the bank taking depositors’ money and doing a bail-in will cause panic and chaos. Maybe that’s why it is so quiet. The banking system and the markets are just trying desperately to keep everyone’s money connected to the fake system. All of these fake monetary moves will not stop the real banking system event that is coming. And it can start at any moment. Be prepared or be stuck.