But staying on the path that we are currently on is only going to end in disaster.

Mark Spitznagel, the chief investment officer of Universa Investments, recently warned that he believes that the “worst market crash since 1929” is ahead of us…

One of Wall Street’s most bearish skeptics told Business Insider last month that he thinks the “worst market crash since 1929” is coming.

For years, our leaders have been “kicking the can down the road”, but according to Spitznagel all of that intervention has set the stage for an absolutely epic collapse…

In an interview with New York Magazine’s Intelligencer last year, Spitznagel likened the Fed’s “constant monetary intervention” to forest fire suppression.

He went on to say “when you suppress it enough, it gets to a point where you can no longer afford to have any fires burn because they would be too big and too intense.”

That’s where the U.S. economy is at, according to the hedge fund manager.

If Spitznagel’s dire market predictions come true, you really don’t want to have all of your eggs in one basket — because that basket could easily go up in flames.

In the months ahead, we will want to keep a very close eye on our banks.

Our banks are the beating heart of our economic system, because without the banks we would not have a functioning economy.

The banks are where we get mortgages to buy homes, auto loans to buy vehicles, and credit cards to go on shopping sprees. Without the credit they provide, we would be in a world of hurt. Unfortunately, our banks are in very serious trouble right now.

Higher interest rates have blown a hole that is hundreds of billions of dollars wide in their balance sheets. And they are sitting on mountains of commercial real estate loans that are going bad because the value of commercial real estate has collapsed all over the nation.

One consulting firm that examined data from approximately 4,000 U.S. banks is warning that hundreds more banks could potentially fail during this crisis…

According to recent reports, hundreds of banks face the potential of failing just like Republic First Bancorp.

Consulting firm Klaros Group analyzed roughly 4,000 U.S. banks and found that the banks face a threat of losses due to “secular changes in social patterns accelerated by the COVID pandemic (such as work-from-home, which has materially impacted demand for office space) and to the impacts of higher interest rates and related inflation.”

“You could see some banks either fail or at least, you know, dip below their minimum capital requirements,” Christopher Wolfe, managing director and head of North American banks at Fitch Ratings told CNBC in an interview.

Meanwhile, we continue to get even more signs that the overall economy is really slowing down.

For example, we just learned that Rue21 is going to be shutting down all 543 of their stores…

Rue21 – the teen fashion chain that is a fixture in malls across America – is to shut all 543 US stores.

Customers will be able to pick up deals while the company clears its stock over the next four to six weeks – but then the 40-year-old chain will be gone forever. At its peak, it had 1,200 shops.

It is expected clearance items will start at 20 to 50 percent off then rise up to as much as 90 percent to clear stock that doesn’t initially sell.

All over America, stores are closing, businesses are fleeing our core urban areas, and once bustling office buildings are standing empty. At this stage, everyone should be able to see where all of this is heading.

The Chinese certainly understand the direction that things are moving.  The following comes from an article entitled “China Is Buying Gold Like There’s No Tomorrow”…

“China is unquestionably driving the price of gold,” said Ross Norman, chief executive of MetalsDaily.com, a precious-metals information platform based in London. “The flow of gold to China has gone from solid to an absolute torrent.”

Gold consumption in the country rose 6 percent in the first quarter from a year earlier, according to the China Gold Association. It came on the heels of a 9 percent increase last year.

Chinese consumers are voraciously buying gold because their own economy is crumbling and they can see what is happening to the global economy as a whole.

At the same time, China’s central bank is gobbling up gold at an unprecedented rate…

Another major buyer of gold in China is the country’s central bank. In March, the People’s Bank of China added to its gold reserves for a 17th straight month. Last year, the bank bought more gold than any other central bank in the world, adding more to its reserves than it had in nearly 50 years.

Beijing is buying up gold to diversify its reserve funds and reduce its dependence on the U.S. dollar, long considered the most important currency to hold in reserve. China has been reducing its U.S. Treasury holdings for more than a decade.

Traditionally, buying gold and other precious metals has been a way to preserve your assets if you think that a major crisis is coming.

And the truth is that a major crisis has already begun.

I have been warning my readers that 2024 would be a very important year, and that has definitely turned out to be the case.

Of course all of this is very bad news for Joe Biden.

He had been hoping that an improving economy would help his chances in November, but instead there has been a dramatic shift in the wrong direction just as we enter the most critical months of campaign season.

Michael’s new book entitled “Chaos” is available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.

Stock and bond markets took this as a good sign. They were already in a Santa Claus rally and broke out to new highs for the year. The interest rate on ten-year government bonds, which had already fallen by almost 1 percent since October, threatened to break support and go even lower. Financial journalists were all smiling with exuberance talking about the “Fed’s pivot.”

However, so far, this is just talk of a Fed pivot, not the actual Fed pivot, and its talk about the suggestion of a possible pivot. Most importantly, it’s all just talk that is positively goosing markets in the direction that Jay Powell wants: gains in stock and bond prices and lower interest rates in the economy heading into an election year. Investors, governments, and incumbent politicians love it. Incumbent politicians hope it all lasts past election day and they usually get their way.

From the Fed’s position, this will help them maintain three things:

1. Their “higher for longer” sloganeering,
2. The “soft landing” scenario,
3. And most importantly, the Fed’s effort to reestablish its reputation, which was tarnished by their claim that the double-digit inflation from last year was only “transitory” as well as their tarnished image as a white knight, or economic savior, that is always ready, willing, and able to save the system.

I must admit that incumbent politicians usually get their way in election years and that they get unusually cooperative and bipartisan when it comes to election year politics. I’ve also admitted on previous episodes that the worst of the next economic crisis will probably get papered over until after the next election, especially the call of an official recession.

However, that is still going to be a tricky maneuver this year, given the contractionary and recessionary condition in the US, China, and most of the world. Especially with the European Union and New Zealand already slipping into recession.

I will do a recap of the economy in the next episode, but this episode will concentrate on longer term historical experience. This experience points in the general direction of an economic crisis ahead. It certainly does not point to the rosy outlook that markets seem to see.

We start this analysis with the historical experience regarding the Fed’s business cycle in the US economy during the post–World War II era. This is the period when the US dollar is the preeminent world currency, the US economy is the world’s economic superpower, and the Fed is the most important central bank in the world and the primary driver of world business cycles.

The first pattern that emerges is that unemployment hits a cyclical low just prior to official recessions and economic crises. Labor markets look unusually good just before they become very bad.

The second pattern that emerges is that the Fed reacts to bad economic conditions by cutting the federal funds rate, which is the base policy interest rate in the economy. This is when the Fed poses as a white knight, saving the economy, when in fact it caused the problem in the first place.

From World War II to the new millennium, the Fed’s rate cutting pattern was generally coincidental with recessionary periods in that the cuts started to occur during periods that would later be officially labeled recessions.

From 2000 to the present, the Fed’s rate cutting started to take place in advance of the official recession periods, preemptively, like they knew something was coming and were taking preemptive measures.

With no noteworthy exceptions, historical experience shows a lockstep linkage between recessions and the Fed changing policy in the direction of cutting its policy interest rate: the federal funds rate of interest.

I want to emphasize this: this change of policy of lowering interest rates is the “Fed pivot” everyone is talking about. However, this Fed pivot has historically ushered in bad economic times for most folks.

Of course, after they have overdone this policy of cutting interest rates and created an artificial expansion in the economy, possibly a stock market bubble, there is the other type of Fed pivot when they begin to raise rates again to supposedly to curb the higher rates of price inflation they have caused in the economy. The only other possible case is the Goldilocks scenario of a soft landing, but we don’t have historical experience to discuss that situation.

A stable stock and bond market could mask worsening conditions in the economy in 2024. So could very low unemployment rates that have been caused in part by the large reduction in the labor force caused by covid policies. A future article will explore some of the possible excuses that might be used to explain away the failure to achieve the soft landing and to set the stage for the “white knight.”

About the Author

Mark Thornton is the Peterson-Luddy Chair in Austrian Economics and a Senior Fellow at the Mises Institute. He is the book review editor of the Quarterly Journal of Austrian Economics, and has authored seven books and is a frequent guest on national radio shows.

This shows us the bubble bias of many investors. We live in a world where two generations of market participants have only seen rate cuts and massive liquidity injections. Central banks have created huge perverse incentives in markets that should have been prevented if they truly followed their mandate of stable prices. On top of it, the ECB faces another risk. It must avoid following the siren calls of interventionists if it wants the euro project to survive.

The euro is the biggest monetary success of the last 100 years, and the ECB’s excessively loose policy may destroy its position as a world reserve currency. The interventionist hordes of European socialism want the central bank to become an instrument in the hands of governments to nationalize the economy and destroy the currency’s purchasing power.

Don’t be mistaken; for those who come up with soft words demanding “expansive-looking monetary policy,” what they are looking for is exactly what they have supported in Argentina, Venezuela, and Cuba: the expropriation of wealth through the dissolution of the purchasing power of the currency.

It would be completely irresponsible to implement massive rate cuts for several reasons.

Central banks are placing all the focus on the price and not the quantity of money. Ignoring monetary aggregates is very dangerous, and centering decisions only on rates may create a larger problem: a market bubble and a real economy contraction.

By ignoring monetary aggregates, central banks may cut rates with no real effect on the productive economy and solve nothing. There may be a significant contraction in economic activity even if rates decline, as credit availability worsens even with declining rates, but markets keep inflating the financial bubble.

Inflation has not declined persistently. Since the consumer price index is a year-on-year calculation from a very high figure, the base effect accounts for up to 85% of the decline in inflation. The same base effect could adversely affect inflation in the coming months if the annual path of price rises remains.

The greatest economic aberration of our time, negative interest rates, actually made the structural weakness in the economy worse, causing it to slow down.

The economy has been accumulating poor and indebted growth data for years in which misguided so-called “expansive” monetary policies have been implemented. Negative rates and extreme liquidity injection have not generated greater or better growth but have left states with enormous imbalances.

Consumers are still suffering from the monetary disaster created in 2020. We are talking about a cumulative inflation rate of more than 22% since 2018 and a price rise that continues to be worrying, particularly in non-replaceable goods.

Monetary aggregates show that there is a private sector recession disguised by accumulated debt. Between January 2020 and July 2022, the money supply (M2) soared by an insane $6.3 trillion, according to FRED. It has declined almost a trillion dollars from its peak. The impact of this decline in money supply on the availability of credit and the broad economy will not be evident until 2024, when it coincides with an enormous wall of debt maturities. Central banks went from excess money to overlooking the money slump. Both are equally negative. One created the inflation burst, and the second is driving a private sector recession disguised by debt.

Inflation is a monetary effect. What some call cost inflation, commodity inflation, or supply shock is nothing more than more units of issued currency than real economic growth going to relatively scarce assets. Unit prices may rise for exogenous reasons, but they do not generate a sustained and cumulative rise in aggregate prices, which is what measures inflation. If a price soars due to an exogenous factor, the rest of the price does not rise at once if the currency issued remains constant relative to economic growth.

Of course, the system creates a whole series of experts who blame inflation on everything and anyone except for the only thing that can make aggregate prices rise at once, consolidate that annual burst, and continue to rise: the decrease in the purchasing power of the currency.

Those who understand money predict inflation and warn of the current risk. From Steve Hanke’s articles and the Inflation Dashboard that accurately predicted the inflation eruption of 2021–22, Richard Burdekin, “The U.S. Money Explosion of 2020: Monetarism and Inflation” (2020), to Claudio Borio, “Does money growth help explain the recent inflation surge?” (2023), or Juan Castañeda and Tim Congdon, “Inflation, The Next Threat?” (2020), dozens of studies warned of the arrival of inflation by excess monetary and explained the empirically monetary cause. Some argue that in 2009–2019 there was no inflation and money was also printed massively, but they do not understand the quantitative theory of money and ignore that the monetary expansion of 2020–22 was up to five times greater than that of the previous period of stimulus plans, as well as fully dedicated to government spending programs.

If we look at the contraction of monetary aggregates, inflation should have dropped faster, and the economy would be in a recession. However, the accumulated effect of massive money growth added to an unstoppable debt-fueled government deficit makes the impact of the 2020–21 liquidity explosion disguise the risks.

Inflation was created by the wrong monetary policy, and incorrect central bank measures may have lasting negative impacts on the economy. The first effect is evident: governments continue to crowd out the real economy, and families and businesses suffer the entire burden of rate hikes. Maybe the objective was always to increase the size of the public sector at any cost and implement a gradual nationalization of the economy.

Market participants should stop encouraging bubble-generating policies, and central banks should focus on monetary aggregates to avoid boom and bust cycles. The negative effects of the current money slump may arrive at once with the wall of maturities. Even if we avoid a recession, it will likely be a false way out with a debt-bloated government consumption figure, weak productivity, and private sector growth.

The FOMC held its November meeting last week. As expected, the Fed left interest rates unchanged. Peter said you can almost always count on the central bank to do what is expected.

The Fed never wants to confound expectations. They never want to surprise the markets. So, if the markets expect no rate hike, well, they deliver no rate hike, and that’s what happened.”

During his prepared remarks, Federal Reserve Chairman Jerome Powell acknowledged the “economic hardship” caused by price inflation. But Peter said he doesn’t seem to grasp the full picture.

Since inflation is caused by the government, and caused by the Federal Reserve, it’s the government and the Fed that are creating that hardship. It’s not like it’s just happening out of left field.”

It’s an intentional policy. The government has decided that it will pay for its borrowing and spending through an inflation tax.

Now, had they used another form of taxation, had the Biden administration, and the Trump administration for that matter, had they raised taxes enough to pay for all of these government programs, that would have created hardship too. Families would be struggling under the burden of crushing taxation. So because the government decided to tax them through inflation as opposed to through the income tax or the payroll tax, the hardship that is being created is because of government. It’s not just something that’s happening by happenstance.”

Powell also reiterated that the goal is “price stability.” Nobody ever bothers to ask, “Why?” What’s so good about price stability?

What about lower prices? Because price stability, the way a normal person would define it, is prices stay the same. Well, I’m a consumer. I’d rather have prices go down than prices remain the same. So, what if prices went down 1% a year, or 2% a year? Why is that so bad? Why does the Fed have to replace that with stability?”

Peter said we don’t really need “price stability.”

It’s really a BS goal.”

And we don’t even actually have a goal of price stability. The goal is for prices to go up 2%.

There’s nothing stable about that other than the rate of increase.”

After the Fed meeting, Powell admitted the central bank isn’t anywhere near that goal and that this is a long process.

He’s underestimating. Waiting for inflation to go to 2% is going to be like waiting for Godot. It’s never going to happen.”

During the Q&A, Powell emphasized that we have a “very strong” economy. Just two days later, we got a very weak jobs report. (Peter talked about this earlier in the podcast.)

How is the economy so strong if the labor market is that weak? … I don’t know what Powell is looking at. I think he’s just reading a script that the Biden administration handed him because he’s just reiterating their talking points to talk up the economy so Biden can get credit for it.”

The question is how will Powell respond when the labor market continues to deteriorate? That would imply the Fed should stop hiking. But as Peter pointed out, one of the reasons the labor market is weakening is because price inflation is strengthening. How can he focus on a weakening labor market and ignore strengthening inflation?

Meanwhile, Powell continued to insist that we need to see a slowdown in economic growth and some “dampening” in the labor market in order to “fully restore price stability.” In other words, he wants to see more people lose their jobs. That’s because he thinks people are spending because they are doing well, that spending is creating more jobs, and also pushing wages higher. Peter said people are spending more because prices are going up.

They’re spending because the money supply has gone up. They’ve got more money to spend, and they’re spending because they’re still able to access credit. They’re taking that borrowed money and spending it. This is not how you grow an economy. This is how you destroy an economy. This is not a virtuous dynamic that he is describing. It is a vicious one that is going to end in ruin. Because you don’t grow an economy by people spending money.”

You grow an economy by not spending money and saving. That provides seed corn for capital investment. That increases productivity creating more output.

You produce your way to prosperity. You save your way, and then invest and produce your way into prosperity. We’re not doing that. We’re trying to put the cart before the horse.”

Peter reiterated that we don’t have a strong economy. We have an inflationary economy.

It’s inflation that is driving everything. Powell just doesn’t realize that. He’s looking at the ‘strong’ economy, and he’s thinking everything is good. He’s looking at inflation. He just doesn’t understand that.”

Peter said he doesn’t think there are any more rabbits the central bankers can pull out of their hats or any road left where they can kick the can. The economy is about to implode and inflation is alive and well. That means the Fed can chuck both its mandates right out the window.

Just eight months later, in remarks on November 22, 2021, President Biden said Powell – then up for renomination and facing stiff opposition from congressional progressives – “made clear to me: A top priority will be to accelerate the Fed’s effort to address and mitigate the risks – the risk that climate change poses to our financial system and our economy.” At that time inflation was 6.8%, on its way up to a 40-year high of 9.1%.

What changed? What caused Powell, a Republican originally appointed by President Trump, to go “freshly woke,” in Politico’s words? (Progressives had always thought him too conservative to steer the Fed in the direction they wanted.) And why would President Biden renominate a Fed Chair who was so clearly failing at his core mission of controlling inflation?

The answer is all around us: “Bidenomics.” The White House has consistently proven – by word and deed – inflation is not a priority. If it were, the administration wouldn’t be pumping trillions of dollars into the economy while dismissing the economic harm Americans have experienced. The administration is interested in lavishing money on its interest groups and its priorities. One such priority is reorienting much of American economic policy toward addressing climate change.

They say that “personnel is policy.” In this case, policy became personnel. In internal emails and emails with the media, obtained from the Department of the Treasury via Freedom of Information Act request by the Functional Government Initiative (FGI), the administration appeared to be far more interested in climate change than Powell’s dismal record on inflation, even when considering whether to renominate Powell to the Fed Chair.

In the words of The Hill, Powell previously had “ruled out imposing climate-related bank stress tests similar to those in development in the U.K. and Europe. He has also refused to use the Fed’s immense power to steer funding away from fossil fuels and toward renewable energy, which many climate hawks consider essential to the fight against climate change.”

But that was then. Powell hadn’t forgotten his clear understanding of the Fed’s mission to serve as “the central bank of the United States to provide the nation with a safer, more flexible, and more stable monetary and financial system.” He just abandoned it as a condition of remaining in office.

Meanwhile, President Biden needed Powell to remain as Fed Chair because, with the Democrat majority in the senate so thin, the White House believed nobody to Powell’s left could be confirmed. But the Federal Reserve’s Board of Governors was a different story. It could be remade with more progressive members. According to Treasury emails, then-House Financial Services Committee Chair Maxine Waters had been demanding the Board be more diverse. So according to emails, a “package deal” was engineered, by which Powell would sign on to the administration’s climate change agenda, while changes would be made to the Board around him. Powell could be the face, but the body had to be sufficiently progressive.

One casualty would be Randal K. Quarles, a member of the Board of Governors, who was to resign and be replaced by a more progressive member. Meanwhile, Bidenomics staggered on. Fed policies bent toward dubious environmental concerns. The risk of recession lingers, and real average hourly earnings have declined more than 3% since January 2021. Inflation is twice as high as the Fed’s target of 2%, and nearly three times higher than it was when President Biden took office.

Powell recently told congress, “Inflation has consistently surprised us, and essentially all other forecasters, by being more persistent than expected and I think we’ve come to expect . . . it to be more persistent.” He also said, despite the official administration positivity, that the process of getting inflation back down to has a long way to go.” So, the Fed is planning to raise interest rates twice more in 2023.

The Biden administration prioritized climate change and the demands of progressive lawmakers over sound economics. It rendered an already failed Fed Chairman a figurehead unable to grapple with his fundamental responsibilities. When policy becomes personnel, you get Bidenomics.

Pete McGinnis is director of communications at the Functional Government Initiative. Article cross-posted from RealClearPolicy.

The rate hike brings the Fed’s target rate within a range of 5% and 5.25%, with the Fed continuing its series of rate increases. Most economists anticipated a quarter point interest rate hike in an effort to bring inflation down, but many expect this will be the last rate increase in the series.

As of Wednesday morning, markets were predicting almost 100% odds that the Fed would hike rates by a quarter-point, according to CNBC. With the latest rate increase, the Fed funds rate is now at its highest level since 2007, prior to the 2008 financial crisis.

“What’s most important is how they convey the potential for a pause going forward,” Collin Martin, fixed income strategist at Charles Schwab, told CNBC. “How do they do that while also probably leaving the door open a little bit? That will be a balancing act between suggesting a pause is in the cards but still is dependent on incoming data should inflation turn higher going forward.”

There is a conflict in goals at the Fed because reducing inflation through interest rate hikes contributes to banking sector turmoil, Peter St. Onge, research fellow in economics at the Heritage Foundation previously told the Daily Caller News Foundation.

“Higher rates put more stress on banks,” he said. But lower rates enable inflation to persist and can signal distress.

“I think the general expectation is that the Fed will raise their interest rate target range by 0.25 percent but that they will signal a pause in rate hikes thereafter,” Dr. Thomas Hogan, senior research faculty at the American Institute for Economic Research and former chief economist for the Senate Committee on Banking, Housing and Urban Affairs, told the DCNF.

“Following the recent failures of Signature Bank and Silicon Valley Bank (SVB), many speculated that the Fed might cut rates,” he added. “Instead, they chose to continue their rate increases.”

The U.S. economy slowed more than expected to 1.1% in the first quarter of 2023, according to the Bureau of Economic Analysis (BEA). Low GDP, high inflation and rising interest rates added to concerns about the possibility of an upcoming recession, according to The Wall Street Journal.

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The failure of SVB is the second-largest bank failure in U.S. history, behind only the failure Washington Mutual in September 2008. So, are the failures of SVB and Signature only isolated problems without systemic contagion, or do they represent the proverbial canary in the coal mine, warning of greater systemic troubles ahead? Here is a summary of the causes behind the failures of both banks, the response by the federal banking regulators, and the potential consequences.

Impact of Federal Reserve Policies

The Fed’s policy of artificially low interest rates and massive purchases of U.S. government debt since 2008, especially since 2020, has encouraged banks and businesses to engage in speculative activities that have not been driven by true market forces. This macro-financial environment can lull banks into a false sense of acceptable market and interest-rate risk.

With interest rates near zero from March 2020 to March 2022, along with an extraordinary 41 percent increase in the M2 money supply during that time period, the Consumer Price Index (CPI) reached a 41-year high in 2022. This prompted the Fed to abruptly change course in March 2022 with rapid increases in its Fed Funds Rate from 0.25 percent to 4.75 percent in February 2023. Such a swift increase in interest rates over the past year would require banks to adjust their asset-liability management to protect against interest-rate duration mismatches between assets and liabilities, known in banking terms as “duration risk.”

In the case of SVB, it was guilty of gross mismanagement of its duration risk over the past year, as it reported an abnormally high 41 percent of its total assets in Held-to-Maturity (HTM) securities, amounting to $91 billion at the end of 2022. These HTM securities, while mostly long-term U.S. government securities with little or no credit risk, had substantial duration risk in a rising-interest-rate environment, as fixed-rate securities fall in price when interest rates rise. This is how SVB got hammered, as it was forced to sell its HTM securities at big losses to cover the run-on-cash withdrawals by its deposit customers in the days leading up to its closure.

Flawed Regulatory Ratios for Assessing Bank Capital

Thomas Hoenig, a former head of the Federal Reserve Bank of Kansas City and former vice chair of the Federal Deposit Insurance Corporation (FDIC), made insightful comments in a March 17 article in the Wall Street Journal. He said that the use of the government-derived “risk-weighted capital” in evaluating a bank’s capital position is a major problem because it does not describe real, tangible capital. In the case of SVB, Hoenig notes in a March 10 article that SVB’s regulatory risk-rated “Tier 1 Capital Ratio” was around 16 percent, a presumably safe capital position, but the more market-realistic “Tangible Capital-to-Asset Ratio” was only around 5 percent. Hoenig is concerned that the use of risk-weighted capital ratios, adopted by bank regulators around the world in 2014, will lead to more problems in the banking sector. Hoenig makes this point in his Wall Street Journal article.

“The other thing about risk weight,” Hoenig said, “is that it’s a political process. It’s not a market process. The market no longer determines capital in the banking, industry. It’s now politicians, lobbyists and the regulators who have to battle it out among themselves. Therefore, you get these nonmarket solutions like risk-weighted capital. And banks are incentivized to increasingly leverage their balance sheets.”

Questionable Bank Regulator Oversight

The deposit runs that occurred with both SVB and Signature Bank raise serious questions about the competence and/or possibly even the corrupt complicity of the regulators with oversight responsibility for the two banks. While the management of the two banks appropriately deserve blame for their failures, the relevant bank regulators also need to be held accountable for missing obvious regulatory red flags from such large banks well in advance of their failures.

In addition to the asset-liability duration mismatch at both banks, other red flags included abnormally high growth rates and concentrations in risky business sectors (green energy technology startups at SVB and crypto exposures at Signature) and extraordinarily high amounts of uninsured deposits.

Looking at data for the end of 2022, SVB had only 12.5 percent of its total deposits within the FDIC-insured limit of $250,000 per deposit account, which indicates that a whopping $151.5 billion of its total deposits of $173.1 billion were uninsured. A similar situation existed at Signature Bank, with only 10.3 percent of its total deposits of $88.6 billion under FDIC deposit insurance, indicating $79.5 billion in uninsured deposits. Thus, the combined uninsured deposits of both failed banks amounted to $231 billion, which should have alerted the banking regulators of duration risk and potential liquidity risk.

It is unclear at this point how these regulatory red flags were missed by the relevant regulators. The primary financial regulators for SVB and Signature Bank were their respective district Federal Reserve banks, i.e. the Federal Reserve Bank of San Francisco (SF Fed) for SVB and the Federal Reserve Bank of New York (NY Fed) for Signature. The FDIC was also involved in its traditional role as regulatory supervisor over the banks’ deposit insurance. The state banking regulators in California and New York also conduct bank examinations.

Because of the unexpected large-scale deposit run on Silicon Valley Bank that resulted in its failure, Federal Reserve Chair Jerome Powell announced on March 13 that the Fed’s vice chair for supervision, Michael Barr, would lead a six-week review of the Fed’s regulatory supervision surrounding SVB. The Fed has committed to releasing Barr’s report by May 1.

Concerning Reactions by Federal Banking Regulators

The response to the failures of SVB and Signature Bank, and more recently to the troubled First Republic Bank, is extremely concerning for several reasons.

• Bailout of Uninsured Deposits: The decision of federal regulators (the U.S. Treasury, the Federal Reserve, and the FDIC) to guarantee funds for all depositors of both failed banks makes a mockery of the FDIC’s $250,000 deposit-insurance limit and signals a new acceptance by the federal regulators to bail out all depositors in any bank failure. This effectively means that the FDIC will now be expected to cover all of the deposits in the U.S. banking system.

At the end of 2022, the FDIC’s Deposit Insurance Fund (“DIF”) was $128 billion in comparison to the $17.7 trillion in total bank deposits in the entire U.S. banking system. The total deposits of SVB alone ($173 billion on Dec. 31, 2022) are enough to wipe out the entire balance of the DIF. So, how will deposits in excess of the Deposit Insurance Fund be funded? On March 12, a joint statement by U.S. Treasury Department, the Federal Reserve, and the FDIC announced that any losses to the DIF would be recovered by a “special assessment on banks.” Such a special assessment means that the entire U.S. banking system will need to raise fees and/or charge higher interest rates on its customers in order to cover the cost of the newly mandated special assessment to cover the mismanagement of failed banks.

• Creation of a New Emergency Lending Program for Banks: On March 12, the Federal Reserve announced the creation of a new emergency lending program for banks, the “Bank Term Funding Program” or “BTFP.” This new program will allow banks to obtain cash from the Fed’s discount window with one-year term loans backed by collateral comprising U.S. government securities. In addition to providing yet more government support to the banking system, the BTFP also allows banks to pledge their collateral at par. This is another misguided Fed policy action, as it allows banks to offload securities with below-par market values onto the Fed at par value. This will not only encourage less prudent risk management by banks, but will also likely result in further expansion of the Fed’s already massive $8.6 trillion balance sheet.

Within the first three days of its start, banks had already borrowed $11.9 billion from the new BTFP. For the week ending March 17, banks had borrowed another $148.2 billion from the Fed’s 90-day discount window, the largest weekly amount since September 2008.

• Inability to Sell the Failed Banks: Typically, the FDIC will have a buyer lined up ahead of the closing of a failed bank, typically another bank in good standing, but, as of Monday, the assets of neither bank have been sold. The market rumors indicate that the FDIC has, in fact, received several expressions of interest from legitimate institutional buyers, but they have been rejected by the FDIC Board. It is unclear why the FDIC has been rejecting interest from apparently legitimate buyers. Some market observers have speculated that it is due to the political ideology of the current FDIC Board, as it opposes mergers or acquisitions that lead to larger banks.
• Evidence of Political Corruption: When the FDIC initially announced the closure of SVB on March 10, it stated that uninsured depositors would not be covered in accordance with standard FDIC practice. However, just two days later on March 12, the FDIC did a complete reversal, stating that all uninsured depositors would be covered. The federal regulators justified taking this abrupt action by calling it a “systemic risk exception,” despite neither SVB nor Signature Bank having been designated as systemically important banks by the Federal Reserve.

This has led to scrutiny over the profile of the uninsured depositors at both banks and is revealing some noteworthy political connections. For example, the Intercept reported that Democratic California Gov. Gavin Newsom has been a client of SVB for many years and is associated with at least five bank accounts at SVB, including the accounts of three winery companies he owns. As for Signature Bank, it could not be more ironic that former Rep. Barney Frank (D-MA), coauthor of the largest banking reform bill in history, the Dodd-Frank Act of 2010, has been serving on the board of directors of Signature since 2015 and has earned compensation of over $2.4 million. Multiple media reports indicate that both SVB and Signature have been heavy donors to the Democrat Party and that uninsured depositors at both banks include other high-profile names that have been big donors to Democrats. Thus, evidence of possible political corruption behind the uninsured depositor bailouts of both banks needs to be thoroughly investigated (but don’t hold your breath).

Consequential Impact on Moral Hazard

The unprecedented bailout of $231 billion in uninsured deposits at two large regional banks, plus a new Federal Reserve emergency bank lending program with weak collateral requirements, will lead to yet more moral hazard in an American financial system already accustomed to being bailed out by the federal government. It also throws out the much-heralded objective of the 2010 Dodd-Frank Act to eliminate “Too Big To Fail” government bailouts in the U.S. financial system.

Contagion Outlook

It remains to be seen whether the failures of SVB and Signature will result in any significant financial contagion into other banks and financial institutions. However, the two failures clearly affected New Republic Bank, which subsequently suffered $70 billion in deposit withdrawals. This triggered the collaboration of 11 of the largest U.S. commercial banks to transfer $30 billion in deposits to New Republic to save it from the same bank-run failure that SVB and Signature experienced. An important banking sector metric of concern is the explosive growth in unrealized losses in 2022. At the end of 2022, the U.S. banking sector held $620 billion in unrealized losses. This may indicate that more turmoil lies ahead for the U.S. banking sector. Stay tuned.

This article originally appeared on the American Spectator.

This article was originally published on FEE.org. Read the original article.

All of the depositors at Silicon Valley Bank and Signature Bank will be protected, and all of them will have access to their money right away.  They aren’t calling this a “bail out”, but that is essentially what it is.  But will it be enough to stop the bank runs that are already happening?

Late last week, huge lines at Silicon Valley Bank quickly made headlines all over the nation.

NEW: Massive line forms outside Silicon Valley Bank in California as customers panic.

Welcome to Biden’s America. It will only get worse.pic.twitter.com/MNCQuKIc9h

— Collin Rugg (@CollinRugg) March 10, 2023

The panic at Silicon Valley Bank quickly spread to other banks in California.  In particular, First Republic Bank was hit really hard…

Dozens of customers lined up outside of a First Republic Bank in southern California on Saturday eager to withdraw their funds in the wake of the collapse of Silicon Valley Bank.

There had been fears following SVB’s demise for First Republic’s future when analysts pointed out the similarities between the estimated value of their assets versus the actual value.

As news of what was unfolding in California spread like wildfire on social media, soon there were lines at various banks all over the nation.

Shades of 1930’s. This is my bank in Wellesley this morning. Boston Private Bank, recently acquired by Silicon Valley Bank. Ruh, roh. pic.twitter.com/MAD46ozShx

— Lawrence Lepard, "fix the money, fix the world" (@LawrenceLepard) March 10, 2023

But most of those that have been pulling money out of U.S. banks over the past few days never stood in any line.

And that is because we now live in an era where most banking is done on phones and computers…

Question: How did $42 billion get withdrawn Friday alone without thousands in line?

Answer: your phone!

This is not the Bailey Savings and Loan anymore.

This should scare the hell of bankers and regulators worldwide.

We have never seen anything quite like what we witnessed on Friday.

When it became clear that Silicon Valley Bank was collapsing, unsecured depositors engaged in a mad scramble to get their money out while they still could.

Silicon Valley Bank was the main bank for two of our companies, my personal savings, and my mortgage. This is how things unfolded for us:

Between 2013 and 2023, all good.

Thursday, 9 AM: in one chat with 200+ tech founders (most in the Bay Area), questions about SVB start to…

— Alexander Torrenegra (@torrenegra) March 11, 2023

And this wasn’t just happening in the United States.

Silicon Valley Bank had branches all over the planet, and so the panic that we were watching was truly global…

Startup founders in California’s Bay Area are panicking about access to money and paying employees. Fears of contagion have reached Canada, India and China. In the UK, SVB’s unit is set to be declared insolvent, has already ceased trading and is no longer taking new customers. On Saturday, the leaders of roughly 180 tech companies sent a letter calling on UK Chancellor Jeremy Hunt to intervene.

“The loss of deposits has the potential to cripple the sector and set the ecosystem back 20 years,” they said in the letter seen by Bloomberg. “Many businesses will be sent into involuntary liquidation overnight.”

This is just the beginning. SVB had branches in China, Denmark, Germany, India, Israel and Sweden, too. Founders are warning that the bank’s failure could wipe out startups around the world without government intervention. SVB’s joint venture in China, SPD Silicon Valley Bank Co., was seeking to calm local clients overnight by reminding them that operations have been independent and stable.

Of course not everyone that had money in SVB got burned.

For example, Peter Thiel and his minions got their money out in time…

Peter Thiel’s Founders Fund had no money with Silicon Valley Bank as of Thursday morning as the bank descended into chaos, according to a person familiar with the matter.

Founders Fund withdrew millions from SVB, said the person, who asked not to be identified discussing private information. It joined other venture funds that took dramatic steps to limit exposure to the now-failed financial institution. Founders Fund also advised its portfolio companies that there was no downside to moving their money away from SVB, even if the risk was low.

And a number of key SVB executives conveniently sold off shares in the bank just last month…

Bill, this may interest you:

Before the collapse, executives sold shares.

Gregory Becker, CEO, sold 11% on Feb 27, 2023.

Michael Zucker, Counsel, 19% on Feb 5.

Daniel Beck, CFO, 32% on Feb 27.

Michelle Draper, CMO, 25% on Feb 1.

Read more: https://t.co/GI3EDmPOGU pic.twitter.com/5kXUr34Wf6

— unusual_whales (@unusual_whales) March 11, 2023

But countless others did not pull the plug in time.

Apparently, that even included Harry and Meghan.

BREAKING: HARRY AND MEGHAN STAND TO LOSE MILLIONS IN COLLAPSE OF SVB BANK

Sources tell iSN the couple set up accounts following the advice of friends in Silicon Valley.

"This is a major blow," said our source, "They had all of Harry's money there." pic.twitter.com/d5qrfYa2Qo

— iSource News (@isource_news) March 11, 2023

Oh the humanity!

There was no way that the Federal Reserve was going to allow Harry and Meghan to lose millions.

So now they have stepped in with mountains of fresh cash.

But is the Fed prepared to do this for all of the other banks that will soon be in trouble too?

According to CNN, U.S. banks “were sitting on $620 billion in unrealized losses” as of the end of last year…

Silicon Valley Bank’s collapse last week sent tingles of panic down investors’ spines as it highlighted a larger problem across the banking sector: The widening gap between the value large lenders place on the bonds they hold and what they’re actually worth on the market.

SVB’s downfall was tied, in part, to the plunge in the value of bonds it acquired during boom times, when it had a lot of customer deposits coming in and needed somewhere to park the cash.

But SVB isn’t the only institution with that issue. US banks were sitting on $620 billion in unrealized losses (assets that have decreased in price but haven’t been sold yet) at the end of 2022, according to the FDIC.

This crisis is far from over.

As I have been arguing for years, our deeply flawed system simply cannot survive without artificial support.

What has transpired over the past several days is clear evidence of this fact.

The Federal Reserve has decided to ride to the rescue once again, and the financial community is cheering.

But will it be enough to stop the wave of panic that has now been unleashed? We shall see.

***It is finally here! Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.***

About the Author: My name is Michael and my brand new book entitled “End Times” is now available on Amazon.com.  In addition to my new book I have written six other books that are available on Amazon.com including “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”. (#CommissionsEarned)  When you purchase any of these books you help to support the work that I am doing, and one way that you can really help is by sending copies as gifts to family and friends.  Time is short, and I need help getting these warnings into the hands of as many people as possible.

I have published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.

I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is definitely a great help.  These are such troubled times, and people need hope.  John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.”  If you have not already done so, I strongly urge you to invite Jesus Christ to be your Lord and Savior today.

Article cross-posted from The Economic Collapse Blog.

Silicon Valley Bank (SVB) Financial Group, a bank which lends primarily to tech companies, told investors on Mar. 9 that it was forced to sell almost $2 billions in shares to raise additional capital to help offset bond sale losses.

The news quickly triggered massive losses across the banking sector and raised concerns that the Federal Reserve’s interest-rate hikes were preventing banks from raising capital.

Before last year, when interest rates were near zero, large banks were buying up U.S. Treasurys and bonds, but the rise in the federal fund rate has since weakened their value, while banks sit on increasing losses.

Since banks tend to hold large portfolios of bonds, their decline is normally not a problem unless they are forced to sell them.

U.S. government bonds surged after the California lender sold off shares to cover bond losses, leading to more worries over the banking sector’s debt holdings.

Bank Stock Values Plunge Across the Board

The news from the tech industry lender quickly caused a knock-on effect on Thursday, as banking stocks fell at their fastest pace since the first months of the pandemic, taking Wall Street’s major indexes down with them.

SVB shares tumbled more than 60 percent and lost another 20 percent in after-hours trading, in the worst decline in the sector, after CEO Greg Becker admitted the bank could be dealing with problems for the foreseeable future.

Meanwhile, America’s four largest banks lost more than $50 billion in market value at the end of trading on Mar. 9.

Shares of JPMorgan Chase fell 5.4 percent, while Bank of America took a 6.2 percent hit, Wells Fargo was down 6.2 percent, and Citigroup tumbled 4.1 percent.

Bank stocks in Europe and Asia sold off sharply the following day, as news surrounding SVB Financial spread to markets across the world.

The Euro Stoxx Banks Index witnessed its worst day since June 2022, led by Deutsche Bank, which saw an 8 percent loss, followed by Société Générale, HSBC, ING Groep, and Commerzbank, which all fell more than 5 percent.

“Lots of chatter today about the possibility of generalized U.S. banking system stress due to SVB troubles. Three summary things on this: While the U.S. banking system as a whole is solid, and it is, that does not mean that every bank is,” stated economist Mohamed A. El-Erian in a tweet.

“Due to the volatility in yields after the prior protracted period of leverage-enabling policy, the most vulnerable currently are those vulnerable to both interest rate and credit risk. Contagion risk and the systemic threat can be easily contained by careful balance sheet management and avoiding more policy mistakes,” he continued.

Meanwhile, U.S. and European bond yields fell to their lowest level in weeks, after investors bet that turmoil in the bank sector could reduce the ability of the Fed to keep hiking interest rates.

Silicon Valley Lender’s Bonds Lose Value to Rising Interest Rates

The interest-rate hikes over the past year have also caused value of its bonds to fall, particularly those that took many years to mature, forcing the bank to reinvest the proceeds from its sales into shorter-term assets.

SVB has suffered significant losses on its portfolio, which was heavily invested in U.S. Treasurys and mortgage-backed securities, which have all taken a beating.

The 40-year-old bank was forced into a fire sale of its securities on Thursday, dumping $21 billion worth of holdings at a $1.75 billion loss while raising $500 million from venture firm General Atlantic, according to a financial mid-quarter report on Mar. 8.

SVB additionally reported more than $90 billion in held-to-maturity securities.

Its recent losses have caused American startup firms, particularly venture-backed tech and life sciences companies, to feel the pinch, as the bank caters heavily to these new firms.

Higher interest rates, fears of a recession, and a tepid market for initial public offerings have made it harder for new startups to raise additional capital in the past year.

The lender’s 2022 third quarter report stated it was partnered with nearly half of all venture-backed tech and health care companies based in the United States.

“The failure of @SVB_Financial could destroy an important long-term driver of the economy as VC-backed companies rely on SVB for loans and holding their operating cash. If private capital can’t provide a solution, a highly dilutive gov’t preferred bailout should be considered,” warned Pershing Square CEO Bill Ackman in a tweet.

“After what the Feds did to @jpmorgan after it bailed out Bear Stearns, I don’t see another bank stepping in to help @SVB_Financial,” he added.

Investors were worried ahead of today’s employment report from the Department of Labor, which they hope will provide some hint on the Fed’s next policy moves.

SVB Reassures Investors That Things Are Fine

The collapse of SVB’s stock value comes shortly after a key lender for the cryptocurrency industry, Silvergate Capital, announced liquidation plans on Mar. 8, following the implosion of FTX, which used the bank to transfer customer funds.

However, the bank said in its letter to investors that it had minimal exposure to crypto, but analysts are still concerned that not all is well at SVB.

Becker reassured investors that their assets were safe and that the stock sale was only an attempt to increase financial flexibility, strength, and profitability at the bank, but the current market situation has caused pressure to its “balance of fund flows.”

The bank cited higher interest rates and “elevated cash burn from our clients” at a historically elevated level and less investments from venture capital, are the primary reasons for raising new capital.

Becker said the bank has “ample liquidity” to support its clients “with one exception: If everybody is telling each other that SVB is in trouble, that will be a challenge.”

He asked clients to “stay calm. That’s my ask. We’ve been there for 40 years, supporting you, supporting the portfolio companies, supporting venture capitalists.”

SVB’s mid-quarter update reported a low ratio of loans to deposits, at 43 percent, which leaves little protection in the wake of a share-price selloff over the coming days.

If startups panic and begin pulling funds from SVB due to concern about its financial health, this could exacerbate the mismatch in deposits and withdrawals, increasing pressure on the bank.

Still, one expert believes the problem goes deeper than just investors getting spooked by SVB and that it is more systemic.

“Why this sudden meltdown in bank stocks? Small banks face a double whammy: Less ”financial liquidity” (reserves) in the system, disproportionately affecting them, a tougher funding landscape, with plenty of safer and higher-yielding alternatives for depositors. This is the real issue, [in my honest opinion],” said Alfonso Peccatiello, founder and CEO of TheMacroCompass, in a tweet.

Article cross-posted from our premium news partners at The Epoch Times.

A closely watched measure of US consumer prices rose by more than forecast to a 40-year high in September, pressuring the Federal Reserve to raise interest rates even more aggressively to stamp out persistent inflation.

The core consumer price index, which excludes food and energy, increased 6.6% from a year ago, the highest level since 1982, Labor Department data showed Thursday. From a month earlier, the core CPI climbed 0.6% for a second month.

The overall CPI increased 0.4% last month, and was up 8.2% from a year earlier.

The Fed has been repeatedly hitting inflation with an over-sized sledgehammer, and it isn’t working.

Prices just continue to surge higher month after month.

In particular, the price of food is rising at a rate that is extremely alarming…

Prices at the grocery store continued to soar last month, adding even more pressure to shoppers’ wallets.

The food at home index, a proxy for grocery store prices, increased 0.7% in September from the month prior and a stunning 13% over the last year, according to new government data released Thursday.

Fed officials assured us that they had everything under control, but it was just a charade.

Thursday’s report makes it exceedingly clear that the Fed’s plan is failing in a major way…

“This inflation report today was an unmitigated disaster,” wrote Christopher S. Rupkey, chief economist at Fwdbonds, a financial markets research company. “It shows whatever Fed officials are doing, it is just not working.”

So will the Fed change course?

Of course not.

Instead, they are going to give us more of the same.

According to Fox Business, it is being anticipated that another 75 basis point rate hike is on the way in November…

The report will also have significant implications for the Federal Reserve, which has embarked on one of the fastest tightening paths in decades. Policymakers have already approved five straight rate hikes, including three back-to-back 75-basis-point increases, and have shown no signs of slowing down.

Following the hotter-than-expected September inflation report, the central bank is widely expected to approve a fourth straight 75-basis-point increase when policymakers next meet at the beginning of November.

As I warned many months ago, these rate hikes are not going to solve the inflation crisis.

But they will absolutely kill the housing market.

This week, mortgage rates surged close to 7 percent…

Average long-term U.S. mortgage rates reached their highest level in more than 20 years this week and are likely to climb even further as the Federal Reserve has all but promised more rate increases in its battle to tamp down persistent inflation.

Mortgage buyer Freddie Mac reported Thursday that the average key 30-year rate climbed to 6.92 percent from 6.66 percent last week. Some lenders are now even offering rates above 7 percent.

Last year at this time, the rate was 3.05 percent.

If the Federal Reserve keeps hiking rates, that will just push mortgage rates higher and higher.

And that will inevitably push home prices much lower.

In fact, home prices are already starting to come down all across the United States…

A home-price slump taking place across popular housing markets in the Sun Belt and other regions could result in some relative bargains for shrewd homebuyers, according to market data released Monday.

The median home listing price has plunged by more than 10% in Austin, Texas, since June, according to an analysis conducted by Realtor.com. That marked the steepest decline of any city in the US over that period.

If you are a potential homeowner that has been forced out of the market by rising mortgage rates, you could try to rent a place while you wait for home prices to fall.

But thanks to raging inflation, rents are absolutely skyrocketing in many of our largest cities…

The latest numbers were released in Realtor.com’s September report, and showed that median rent across the country as a whole rose 7.8 percent last month, and remained a whopping 25 percent higher than pre-pandemic rents.

The 10 cities with the highest median rent increases last month were Chicago at 23.9 percent, Boston with 19.9 percent, New York with 18.2 percent, Providence with 16.7 percent, Oklahoma City at 13.8 percent, Miami with 13.2 percent, Kansas City at 11.2 percent, San Jose with 10.7 percent, Cleveland with 9.8 percent, and Hartford with 9.6 percent.

I still remember the days when I could rent a nice apartment for 300 dollars a month.

Sadly, those days are long gone.  In fact, one couple in New York recently decided to move out of the city entirely when the rent on their one-bedroom apartment went from $5,000 a month to $7,000 a month…

Last May, Charlotte, 31, and her husband packed up their one-bedroom apartment on Christopher Street after learning the rent would likely skyrocket from $5,000 per month to $7,000. The couple loved living in the West Village, but homeownership was out of reach, even with her job in finance and him being in tech.

They were both working from home, so they could live anywhere. It was time, they decided, to leave New York.

Can you imagine paying $7,000 a month for a one bedroom apartment?

That is nuts!

Unfortunately, our whole system is going crazy at this point.

The great economic meltdown that I warned my readers about for so long has begun, and the months ahead are going to be very painful.

Fed officials will do all they can to fix the giant mess that they have created, but it isn’t going to work.

They have lost control, and everyone can see it.

***It is finally here! Michael’s new book entitled “7 Year Apocalypse” is now available in paperback and for the Kindle on Amazon.***

About the Author: My name is Michael and my brand new book entitled “7 Year Apocalypse” is now available on Amazon.com.  In addition to my new book I have written five other books that are available on Amazon.com including  “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, “Get Prepared Now”, and “Living A Life That Really Matters”. (#CommissionsEarned)  When you purchase any of these books you help to support the work that I am doing, and one way that you can really help is by sending digital copies as gifts through Amazon to family and friends.  Time is short, and I need help getting these warnings into the hands of as many people as possible.

I have published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.

I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  These are such troubled times, and people need hope.  John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.”  If you have not already done so, I strongly urge you to ask Jesus to be your Lord and Savior today.

Article cross-posted from The Economic Collapse Blog.