The Perfect Storm

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As I have continued to say...Since 08 the FED and US govt have printed borrowed and spent in order to keep the US and Global economy afloat..Without that juicing the shyte would have hit the fan long ago.

To facilitate those approved policies the banks have loaded up on US Treasuries in particular at ever lower interest rates.. Now that interest rates are being raised the value of those low rate US Treasuries has fallen below the purchase price of those bonds..If a bank needs to raise liquidity in order to meet depositors withdrawals from their bank accounts they might need to sell their underwater bonds off creating a loss...which can make a bank insolvent.

Since virtually every bank in the world has scads of low interest rate bearing US Treasuries that are under water due to rising interest rates any loss of confidence in the banking system could cause a run on the banks which could collapse of the entire global banking system... That possible contagion is creating a fear of God moment.. No banks means no facilitation of the flow of cash which means no economy and a collapse of civilization the face of the chaos caused.

FDIC was instituted by FDR in 33 to restore confidence in the banking system so that people would keep their money in banks...FDIC guaranteed deposits...That is the ONLY REASON my dad and others kept their money in the banks after the 29 debacle. If a bank failed before FDIC you lost your money..

That is why Joey and the FED guaranteed that FDIC would stand good even though FDIC is woefully short of being able to cover all deposits... In 1990 that FDIC guarntee was implicitly given to deposits above the maximum amount of 250K...so that is nothing new... This is no bail out of the banks..it is a bailout out of the depositors in the banks which means the American people themsleves..

[Superman]

would you agree that hookers and blow are good investments right now?

[pwd72s]

Lack of confidence...pretty damned difficult to have confidence in much of anything these days.

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Originally Posted by Superman

would you agree that hookers and blow are good investments right now?

The way it is playing out is that all the guyz and gals whose investment strategy was "Hookers and Blow" are doing as well as all the guyz and gals who did all the right things and saved their money...at least they had the fun of doing it..The guyz and gals who saved their dinero are the ones who HAVE AND ARE BEING FKED IN THE AZZ...all that work for nothing..they believed in the American Dream system.

I feel for those people because my parents were among those who worked hard and saved...becoming the living embodiment of the American Dream..So my message of telling about how the game has changed is to those who have followed that course..but they tend not to believe me..

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Originally Posted by pwd72s

Lack of confidence...pretty damned difficult to have confidence in much of anything these days.

When a nation becomes morally and ethically BK there is nothing to have confidence in. You have to chart your course through perilous shoals..

[brp914]

The amount of money at risk dwarfs the ability of the FR to solve the problem. SVB embraced all the latest leftist ESG crapola which played a role in its demise. Surely, there weren't any Dem donors there that would give rise to FDIC adding orders of magnitude to the original $250k per account protection.

[monoflo]

Morally and ethically BK>>>>>>>>>>>>>>>>>>>that's about right.

[Superman]

You say you have been warning us of impending doom since 2012. Approximately how much longer must we wait?

Also, what forum is this?