The Collapse of the Banking System

The banking system is on the brink of collapse due to the collapse of Silicon Valley Bank and Credit Suisse, and the Treasury and Federal Reserve have had to step in to provide bailouts. The market is saying that this is similar to the financial crisis of 1987 and that the global monetary system is broken, and another financial crisis is likely to occur soon.

Avoiding Bankruptcy

To avoid going bankrupt, it is important to diversify deposits and include hedges in the asset side of the balance sheet. It is also important to diversify deposits that are above the FDIC-insured limit of $250,000 with smaller depositors, as they are less likely to take their money and run if they become caught up in the tech bubble.

Main Points

• Banks risk collapsing if their balance sheets are not managed properly.
• Silicon Valley Bank and Credit Suisse have recently experienced bailouts.
• The crisis is far from over and is only beginning.

Key Takeaways

• Use hedging strategies to protect the asset side of the balance sheet.
• Diversify deposits to protect against “hot money.”
• Monitor the market to stay ahead of any potential collapses.
• Be aware of new financial innovations that could disrupt the system.