Banking Crisis
The yield curve is steepening very badly, marked by the dramatic fall of the two-year treasury yield, while the ten-year treasury yield remains stable. This change is significant as it indicates that economic turbulence could be impending, and the financial storm could hit soon.
Although crises have been witnessed with Silicon Valley Bank, Credit Suisse, and Deutsche Bank, the worst has not yet come. The global elite may leverage this crisis to launch a central bank digital currency to control both people's money and, eventually, their lives.
The Collapse of Silicon Valley Bank
- Silicon Valley Bank (SVB), the 16th largest bank in the US, collapsed in a day and a half due to risky investments in tech companies, triggering other bank closures and the Great Recession.
- The Obama administration had signed the Dodd-Frank Act, which made banks like SVB face stricter regulation.
- During the Trump administration, some of the regulations on smaller banks were rolled back, allowing them to unleash the economic potential of the people.
- SVB had stockpiled a hundred billion dollars plus in bonds and when interest rates rose, they were sitting on a bunch of losses worth $17 billion less than their fair value.
- When rates increase, banks must sell investments and withdraw money from customers, potentially leading to a run on the bank. This happened to SVB.
The Collapse of Credit Suisse
Credit Suisse is the second-largest lender in Switzerland and one of the larger banks in Europe. They are currently having problems in the U.S. banking sector, but their troubles in Europe could have a material impact on us here in the States. Credit Suisse has 50,000 employees and a half trillion dollars under management.
Their share price has been crashing, and their bonds are tanking. The cost to insure their bonds are increasing, and their credit default swaps (a measure of the risk of their defaulting bonds) are shooting up.
Deutsche Bank: The Next Bank to Collapse?
The concern with Deutsche Bank is their exposure to commercial real estate in the U. S. Additionally, they have a large book of derivatives but obviously, that's not surprising considering the size of their Bank.
Some takeaways about Deutsche Bank:
• Deutsche Bank reported a profit of 6 billion dollars last year, their largest profit in 15 years.
• Compared to Credit Suisse, which is still facing difficulties, Deutsche Bank has implemented a turnaround plan that has been successful in the past 5 years.
• The question is whether Deutsche is healthy enough to withstand an upcoming challenging banking environment – one argument is that the fear surrounding these concerns is unjustified.
Banking System Fragility
- The banking system is fragile, and the Global Elite wants to control people's lives and money.
- The recent banking crisis has caused the treasury yield curve to steepen, indicating that the crisis is still in progress.
[ctt template=”3″ link=”279RP” via=”no” ]An old quote from The Art of War states, “The greatest Victory is that which requires no battle.” #CBDC[/ctt]
The Banking Crisis May Trigger Central Bank Digital Currencies
- The Global Elite will not let a crisis go to waste. They will use the banking crisis as an excuse to try and roll out a CBDC.
- The Global Elite says that central bank digital currencies (CBDCs) will help central banks better fight inflation and have more direct control over the money supply. They are arsonists acting like firefighters.
- The downside of governments being able to track digitally every single product or service you buy and sell is a personal freedom killer.
- Governments lie and bureaucracies are incapable of resisting the temptation to weaponize CBDCs against society.
[ctt template=”3″ link=”uD76q” via=”no” ]Skyrocketing inflation and economic recession could persuade people to opt into something like a digital currency, giving up their financial data to the government. #CBDC[/ctt]
Central Bank Digitial Currency and the Social Credit System
Centralized digital currency and its potential to be linked to a social credit system is a cause for concern, as this is where we are headed if we don't take action.
- Maxine Waters is pushing for a CBDC, saying that it is necessary to compete with China. This is a dangerous idea because it implies that to compete with a communist system, we need to become communist.
- The social credit system is a cause for alarm, as it could be used to restrict people's freedoms, such as the ability to travel, buy gas, and more. This is already being done in China.
Central Bank Digital Currencies (CBDCs) could have several negative implications, including:
-
Increased Surveillance: CBDCs could enable increased government surveillance and monitoring of individual financial transactions, which could potentially undermine personal privacy and freedom. This could be especially concerning in countries with authoritarian governments that may use CBDCs to control their citizens.
-
Disruption of Financial Institutions: CBDCs could disrupt the traditional banking system by allowing individuals to transact directly with the central bank, bypassing financial intermediaries. This could lead to financial disintermediation and reduced credit availability and liquidity in the banking system.
-
Cyber Security Risks: As with any technology, digital currencies are vulnerable to cyber-attacks and may be subject to hacking or other forms of cyber fraud. Central banks that choose to issue CBDCs must ensure adequate security measures to protect against these risks.
-
Unintended Consequences: Introducing CBDCs could have unintended consequences that central banks may not anticipate. For example, CBDCs could lead to bank runs or have unintended economic effects, including inflation or deflation.
-
Adoption and Acceptance: It is unclear whether CBDCs will gain widespread adoption and acceptance among the public. Consumers may be reluctant to adopt new payment systems or may prefer the anonymity provided by cash.