Conservative Guard
  • Home
  • Breaking News
  • US
  • World News
  • China
  • Business
  • Politics
  • Crime
  • Finance
  • Entertainment
No Result
View All Result
  • Home
  • Breaking News
  • US
  • World News
  • China
  • Business
  • Politics
  • Crime
  • Finance
  • Entertainment
No Result
View All Result
theTotalStory | Conservative News & Opinion
No Result
View All Result
Home Finance

Do Bank Failures Signal More Trouble Ahead?

Conservative Guard by Conservative Guard
March 22, 2023
in Finance
0
Do Bank Failures Signal More Trouble Ahead?
7
VIEWS
Share on FacebookShare on Twitter

The following appears first and foremost on the Ron Paul (RPI) website.  

Mar 20 – The failure of Silicon Valley Bank (SVB) on March 10 was the second largest bank failure in U.S. history. Just two days following SVB’s collapse, Signature Bank joined the record books as the third largest bank failure in US history.

First Republic Bank also seemed on the edge of collapse until Bank of America, Citigroup, and other big banks agreed to jointly fund a bailout for it.

Major Swiss bank Credit Suisse was also teetering on the brink when it received a 54 billion dollars line of credit from the Swiss UBS Group last week.

Now, UBS is in the process of buying Credit Suisse. Politicians, regulators, and financial “experts” all rushed to assure us these problems were all caused by factors unique to the individual banks and were not a sign of a systemic weakness in the banking system.

The bank failures and near failures caused nervous banks to borrow a combined 164.8 billion dollars in one week from the Federal Reserve’s discount window and the Bank Term Funding Program, a new program created by the Fed to make loans to troubled banks.

The Fed created this program even though supposedly there is no systemic problem in the banking industry.

While SVB didn’t receive a bailout, the Federal Deposit Insurance Corporation (FDIC) guaranteed the full amount of all deposits even though Congress set a standard FDIC guarantee on deposits of up to 250,000 dollars.

By covering all SVB deposits, the FDIC has created an expectation among depositors at major financial institutions (as well as the institutions themselves) that the government will cover 100 percent of deposits.

This will cause both depositors and banks to make investment decisions they typically would not make, thus guaranteeing larger bank failures followed by more bailouts for wealthy depositors.

Some have blamed the current bank failures, along with other signs that the economy is on the verge of a major downturn, on the Federal Reserve’s interest rate increases.

It’s true the Fed bears responsibility.

However, the rate increases are not the problem.

The problem is the “easy money” and low or zero interest rate policies the Fed pushed since the 2008 market meltdown, which was caused by the bursting of the Fed-created housing bubble.

Federal Reserve manipulation of the money supply distorts interest rates, which are the price of money.

This distorts the signals sent to market actors regarding the true value of investing in particular industries.

The result is malinvestments in those industries creating a bubble. The bubble will inevitably burst.

The economic downturn that follows the bursting of a bubble is necessary to cleanse the economy of the malinvestments.

The correction will not last long and the economy will emerge stronger if Congress, the Treasury Department, and the Federal Reserve refrain from “stimulating” the economy with federal spending and artificially low interest rates. Government interference, however, can create yet another bubble, setting the stage for another crash.

The new wave of bank failures is an indication that the U.S. economy is either in or on the verge of another serious Fed-caused recession.

With nations seeking to end the dollar’s status as the world’s reserve currency, the end of America’s disastrous experiment with fiat money, and with it the welfare-warfare state, could be on the horizon.

The collapse can be accompanied by civil unrest and greater restrictions on liberty.

However, the spreading authoritarianism can also spur a growth in the movement for individual liberty, a free market, and limited government that could make the dark night of authoritarianism a prelude to a new dawn of liberty.

Ron Paul is a physician, author, and former GOP congressman. Fmr. Rep. Paul also is a two-time Republican presidential candidate and the presidential nominee of the Libertarian Party in the 1988 U.S. presidential race. His latest book is “Swords Into Plowshares.” Read Ron Paul’s Reports — More Here.

Copyright © 2022 by Ron Paul Institute.

Related

Previous Post

Dollar Falls After Fed Raises Rates

Next Post

Powell: Bank Deposits Have Stabilized in Last Week

Next Post
Powell: Bank Deposits Have Stabilized In Last Week

Powell: Bank Deposits Have Stabilized in Last Week

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Stay Connected test

  • 11.3k Subscribers
  • Trending
  • Comments
  • Latest
Former Arizona State Student Appeals Conviction For Distributing Constitution Copies

Former Arizona State Student Appeals Conviction for Distributing Constitution Copies

January 27, 2023
Why Adani’s $100 Billion Loss Hasn’t Tanked India’s Markets

Why Adani’s $100 Billion Loss Hasn’t Tanked India’s Markets

February 11, 2023
Ukraine Attacks Russia’S Hold On Southern City Of Kherson

Ukraine attacks Russia’s hold on southern city of Kherson

October 27, 2022
Women Balk At Chinese Government Plans To Raise Birth Rate

Uyghurs Challenge the World’s Selective Memories of Genocide on Holocaust Remembrance Day

January 27, 2023
Tensions Rise On Peninsula Over Fears North Korean Eyeing ‘Tactical’ Nukes With New Policy

Tensions rise on peninsula over fears North Korean eyeing ‘tactical’ nukes with new policy

0
Times Square May Get One Of The Few Spectacles It Lacks: A Casino

Times Square May Get One of the Few Spectacles It Lacks: A Casino

0
Border Containers 34754 C0 435 5219

Arizona refuses U.S. demand to remove shipping containers from border

0
How Finnair’s Huge Bet On Faster Flights To Asia Suddenly Came Undone

How Finnair’s Huge Bet on Faster Flights to Asia Suddenly Came Undone

0
‘Succession’ Finale: 5 Questions To Consider As You Get Ready For The End Game

‘Succession’ finale: 5 questions to consider as you get ready for the end game

May 27, 2023
Roger Waters Concert Outfit Spurs Berlin Police Probe For Possible Incitement

Roger Waters concert outfit spurs Berlin police probe for possible incitement

May 27, 2023
New Bill To Build Athletics Stadium On Las Vegas Strip Caps Nevada’S Cost At $380 Million

New bill to build Athletics stadium on Las Vegas Strip caps Nevada’s cost at $380 million

May 27, 2023
Celine Dion Cancels European Concerts ‘Until I’M Really Ready To Be Back On Stage’

Celine Dion cancels European concerts ‘until I’m really ready to be back on stage’

May 26, 2023

Recent News

‘Succession’ Finale: 5 Questions To Consider As You Get Ready For The End Game

‘Succession’ finale: 5 questions to consider as you get ready for the end game

May 27, 2023
Roger Waters Concert Outfit Spurs Berlin Police Probe For Possible Incitement

Roger Waters concert outfit spurs Berlin police probe for possible incitement

May 27, 2023
New Bill To Build Athletics Stadium On Las Vegas Strip Caps Nevada’S Cost At $380 Million

New bill to build Athletics stadium on Las Vegas Strip caps Nevada’s cost at $380 million

May 27, 2023
Celine Dion Cancels European Concerts ‘Until I’M Really Ready To Be Back On Stage’

Celine Dion cancels European concerts ‘until I’m really ready to be back on stage’

May 26, 2023

TrendingNews

Minnesota Landlord Accused Of Torching His Own Duplex While Playing ‘We Didn’T Start The Fire’

Minnesota landlord accused of torching his own duplex while playing ‘We Didn’t Start The Fire’

by Conservative Guard
May 24, 2023
0

‘Thelma And Louise’ Blu-Ray Movie Review

‘Thelma and Louise’ Blu-ray movie review

by Conservative Guard
May 22, 2023
0

New updates

‘Succession’ Finale: 5 Questions To Consider As You Get Ready For The End Game

‘Succession’ finale: 5 questions to consider as you get ready for the end game

by Conservative Guard
May 27, 2023
0

Roger Waters Concert Outfit Spurs Berlin Police Probe For Possible Incitement

Roger Waters concert outfit spurs Berlin police probe for possible incitement

by Conservative Guard
May 27, 2023
0

Browse by Category

  • Breaking News
  • Business
  • China
  • Crime
  • Entertainment
  • Finance
  • Politics
  • US
  • World News

© 2022 www.conservativeguard.com

No Result
View All Result
  • Conservative Guard

© 2022 www.conservativeguard.com

Go to mobile version