NewsTarget: A week-and-a-half after the second-largest bank failure in American history ignited uncertainty throughout the global economy, experts warn bank failures and the stabilization measures taken by the Federal Reserve and Wall Street are creating even greater bank consolidation — and might further pave the way for a central bank digital currency (CBDC).
Silicon Valley Bank’s (SVB) collapse earlier this month led to the collapse of Signature Bank, the voluntary closing of Silvergate Bank and the takeover of all three banks by the FDIC.
In response, top credit rating agency Moody’s lowered the outlook for the entire U.S. banking system to “negative.”
Now the banking crisis is spreading to Europe. Swiss regulators engineered a “forced marriage” between UBS and the troubled Credit Suisse this past weekend as part of an effort to stabilize the bank in the face of increasing concerns that a major financial crisis is imminent.
The collapse and downgrading of these banks have bolstered the position of what has come to be called the systemically important banks (SIBs) — financial institutions whose failure could trigger a financial crisis.
These “too big to fail” financial institutions — which include JPMorgan Chase, Bank of America, Goldman Sachs, Citigroup and Wells Fargo, among others — have been inundated with billions of dollars of new deposits “as smaller lenders face turmoil,” the Financial Times reported. Read More …
Opinion: If you have been coming to this site, or listening to Prophecy Today Radio over the past 3 years, you will know that I believe Central Bank Digital Currencies are not just imminent, but the precursor to a cashless society as prophesied in Revelation 13:16-17.
In fact, this past Saturday I repeated that on the Prophecy Today Radio Broadcast with Dr. Jimmy DeYoung Jr:
Jimmy: RC What caused the banking crisis?
RC: There are several causes for the current banking crisis, and they are all tied to inflation, quantitative easing or money printing, and US Treasury Bonds.
First: Inflation – beginning in 2021 oil pipelines and oil leases were canceled in the name of climate change, causing energy inflation: oil and diesel fuel prices to rise and the price of moving goods around the country to skyrocket.
Second: Money printing – called Quantitative Easing or QE, that began in 2009 and continued in various forms with different names was ramped in 2020 during the Covid crisis driving interest rates down and inflation began to pick up.
Third: The bellwether 10-year Treasury bond yield dipped below 1% and finished the year at almost at 3.4% causing extreme volatility in the bond market that is a staple of bank investments.
Q. What caused such drastic moves?
A. Inflation not seen since 1980 began to rear its ugly head in 2021, as the Federal Reserve and US Treasury Department kept telling the public that inflation was only transitory, or temporary.
That critical error caused the Federal Reserve to keep interest rates low for 9 months while inflation took hold. When the Consumer Price Index hit 9% the Fed started raising rates too fast, causing Treasury bonds, which had been purchased by big and small banks, to plummet.
Warren Buffet’s expression “when the tide goes out – everyone will know who was swimming naked” showed that investors and depositors didn’t know that many California banks were more interested in being woke than applying sound risk management guardrails.
On March 13, the first domino to fall was Silicon Valley Bank, whose management, we learned, was asleep at the switch.
Jimmy, SVB was more interested in the yield killing ESG (Environment, Social, and Governance) investing policies. Also, they donated over 70 million dollars to Black Lives Matter, and implemented non-stop Pride initiatives, causing the public to fear the soundness of regional banks like SVB, driving depositors to begin moving money to the “Too Big to Fail” money center banks.
Q. RC that is a mouthful, but if I remember right the US successfully fought inflation in the 1980s with President Reagan and Fed Chairman Paul Volker so why doesn’t the government redeploy those policies?
A. And that Jimmy is the 64 trillion-dollar question. You see progressive leftists in government embraced the modern monetary theory (MMT) that says printing new money will not cause inflation, so the printing press went into overdrive.
Since Joe Biden became president in 2021, the US national debt grew from $26.9 trillion to 31.5 trillion, and inflation went from under 2% to over 6% but woke politicians still fail to make the connection and want to keep spending and raising taxes to pay for it.
Q. So where are we now? Didn’t SVB depositors including those above the $250,000 FDIC Insurance have access to their money the next day?
A. Here is the problem:
Total bank deposits in the US top $19 trillion dollars, and 40% or about $8 trillion, are above the $250,000 mark that are insured by the FDIC.
The FDIC has only $128 billion to bail out depositors. Therefore, in the case of a contagion of bank failures, the Fed would have to start the money printing again to ensure depositors.
And unfortunately, that is only the tip of the iceberg. US spending since the 2008 financial crisis under 3 presidents has taken US debt to 129 % of our gross domestic product all financed by Quantitative Easing (QE) thereby diluting our dollar which causes more inflation.
Q. So what it sounds like you are saying is that another bank failure is not a matter of if, but when?
A. It sure looks that way. But the big thing governments do not want is the optics of lines of customers all over their nation clamoring to get their money out of the banks, reminiscent of 1930.
Over the past 2 weeks, Treasury Secretary Yellen made multiple announcements, first on March 13 saying deposits were not guaranteed, then 3 days later she guaranteed deposits, followed by Wednesday’s comment that there are no plans to boost the FDIC guarantees, implying that deposits are not guaranteed. This has opened the door to total confusion and a drop in regional bank shares as depositors rush to the ‘Too Big To Fail Banks’ that could lead to more regional bank runs.
In Europe, Credit Suisse, the 8th largest bank, needed a bailout and was taken over for pennies on the dollar by UBS. And on Friday morning, rumors of more financial trouble at Deutsche Bank, Germany’s biggest bank, had financial markets on edge.
Jimmy, I believe that both the US and EU governments absolutely know how they could end bank runs forever. By making the dollar and euro digital, guaranteed by the central banks, there would be no other place to move your money.
Q. OK RC we have talked on many broadcasts how CBDCs could happen and how that fits in with Revelation 13.
A. Jimmy, Revelation 13:11-17 tells us that when Antichrist is at the peak of his power, his second in command (the false prophet a powerful religious figure) will cause everyone on earth, regardless of status or position, to take a mark of loyalty on their right hand or forehead for the privilege of buying and selling. Revelation 14:9-11 tells us that the penalty for those who TAKE the mark is the 2nd death in the lake of fire for eternity.
On our website Prophecy Tracker .org, we often use the adage ‘future events cast a shadow before them’.
In this case, the cashless society, beginning with central bank digital currencies, will set the stage for the government of Antichrist.