Down the pan…

The indications are that another financial crisis is in the offing. As mentioned in previous posts, it has been said by some commentators that the Covid crisis was leveraged in a bid to avert a crisis that was building up in 2019. If that was the case, then all the powers that be have managed to do is to kick the can down the road.

The amount of government money that has been thrown around across the globe in the last few years in a bid to keep some sections of the economy going has inevitably had repercussions for the financial sector. It has also had some serious repercussions for the financial health of governments across the globe. Repercussions that are now starting to make themselves felt.

How much do governments and central banks have left in their arsenals to deal with another financial crisis? The truth is, we’ll only find out the answer to that question once the brown stuff hits the fan. The only certainty is that it’s us, the ordinary people who’ll be paying the price for this. That won’t just be with yet more austerity but quite possibly with ‘bail ins’ where people’s savings and deposits are effectively ‘requisitioned’ by the banks and other financial institutions. It will be interesting to see how people react to this…

It’s early days in this latest phase of a crisis that in all truth, has been with us since 2008. As it’s early days, there’s a range of opinion as to why we are where we are. I’ve picked out three readings, each with their own perspective on the situation. Feel free to comment with your own views.

Suffice to say, this is yet another ingredient in the clusterf**k stew we’ve been obliged to eat up over the last few years. How it will play out is anyone’s guess. It’s going to be a bumpy ride, that much is certain…

How Covid lockdowns primed the current financial crisis – Christian Parenti | The Grayzone | 15.3.23

On Friday March 10th, 2023, Silicon Valley Bank (SVB) died of Covid. Alright, it’s a little more complicated than that, but Covid lockdowns followed by massive government stimulus were a critical – and massively under-acknowledged – factor in propelling the bank’s demise.

At the heart of the crisis is the gigantic pile of low-interest debt that was issued during the height of the pandemic. While private-sector pandemic-era debt like corporate bonds also soared, US government debt like Treasury bonds piled up.

The SVB Collapse: How financial crisis boosts the rise of CBDCs – Kit Knightly | OffGuardian | 15.3.23

Last Friday saw the total failure of the Silicon Valley Bank, the 16th biggest bank in the United States. The biggest bank failure since the 2008 financial crisis

By Sunday, the Silvergate Bank and Signature Bank had joined SVB in full collapse. All three are now safely under Federal Deposit Insurance Corporation (FDIC) control.

The FDIC has taken the unusual step of fully guaranteeing all deposits kept with the SVB – meaning the federal government will give taxpayer money out to compensate every SVB customer.

Silicon Valley Bank: From Hot to Not – Bobby Casey | Truth Talk | 13.3.23

“Survival of the fittest” is a bit misleading. Because for humans, “fitness” has more to do with adaptability of behavior more so than agility of your physicality. If we don’t adapt, we will fail. And humans are evolving at a rapid clip.

My parents’ generation wasn’t doing this at this rate. Once the internet hit the scene, we hit a speed of advancement the likes of which my parents would have never imagined, much less adapted to.

We can’t save people from themselves. We especially cannot do this from a centrally planned approach.

One month ago, Forbes called Silicon Valley Bank (SVB) one of “America’s Best Banks”.

One month is all it took to go from riches to rags.

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