Peter Schiff discusses the Jerome Powell, FOMC, interest rates, and the banking and financial crisis. One America News Network’s Real America with Dan Ball. Recorded 5/3/2023
#economy #banks #inflation
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LEARN MORE ABOUT: Bank Failures
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Another Major Bank Failure: Lessons from the Collapse
In recent years, the global banking industry has witnessed a series of major collapses, sending shockwaves throughout the global economy. Yet again, we find ourselves grappling with yet another major bank failure, serving as a harsh reminder of the inherent risks and vulnerabilities that plague the financial system. As the dust begins to settle, it is imperative that we analyze the causes and implications of this collapse, and consider the lessons that can be learned to prevent such a catastrophe in the future.
The collapse of a major bank is not only significant because of its immediate impact on investors, employees, and clients, but also due to its systemic implications. Banks play an integral role in the functioning of the global economy, facilitating the flow of funds, providing loans, and supporting economic growth. When a bank fails, it disrupts the smooth operation of financial markets, erodes trust among investors, and can trigger a domino effect, potentially leading to a financial crisis.
In understanding the causes of this recent bank failure, it becomes apparent that a combination of factors contributed to its downfall. One key factor is excessive risk-taking by the bank’s management. The pursuit of short-term profits and a failure to adequately assess and manage risks created an environment ripe with potential for disaster. Furthermore, poor governance, lax regulatory oversight, and a lack of transparency within the bank allowed these risky practices to go unchecked.
The collapse of this bank also sheds light on the interconnectedness of the financial system and the dangers of contagion. As the bank’s financial health deteriorated, it exposed other institutions that had significant exposures to its assets, leading to a breakdown in confidence and triggering a chain reaction of panic selling. The lack of proper risk assessment and diversification in investment portfolios exacerbated the vulnerability of these interconnected institutions, exacerbating the impact of the collapse.
The repercussions of this crisis reach far beyond the immediate stakeholders. Taxpayers often bear the burden of bank bailouts, as governments step in to prevent a complete collapse and mitigate the broader economic consequences. This strains public finances and diverts resources from critical areas such as healthcare, education, and infrastructure. The public’s trust in the banking sector is further eroded, hindering economic growth and perpetuating a cycle of skepticism and financial instability.
To prevent future bank failures of this magnitude, a holistic approach is required. Strengthening regulatory frameworks, ensuring accountability and transparency within banks, and emphasizing risk management and corporate governance practices are essential steps. Regulators must take a proactive stance, closely monitoring banks’ activities, and intervening early to prevent excessive risk-taking. Banks themselves must prioritize long-term stability and sustainability over short-term gains, implementing robust risk assessment frameworks and investing in competent risk management teams.
Furthermore, governments and central banks should promote the diversification of the financial sector, encouraging competition and fostering innovation. This reduces the concentration risk posed by large, systemically important banks and enhances the resilience of the overall financial system. Cooperation between regulatory bodies and international financial institutions should also be enhanced to effectively monitor and assess risks at a global level.
In conclusion, another major bank failure brings into focus the frailties of the banking system and the imperative for reform. Lessons from this collapse should be heeded, with an emphasis on stronger regulatory oversight, improved risk management practices, and greater transparency within the banking sector. Only through these concerted efforts can we hope to build a more resilient financial system, one that is capable of weathering the storms of economic volatility and safeguarding the well-being of individuals and economies alike.
Now cash only
What happened to SVB is really scary, and goes to show that no corporation, however big, is immune to collapse. I have always had a deep-seated mistrust for corporations. I have plans to pull out most of my money, but don't know what to do with $350k sitting idly. I'd like to go into the stock market, maybe. Any ideas?
shame on you Peter Schiff just saw the 60 minutes interview about your pathetic bank. Seems like you were shitting bricks for 10 minutes and they weren't gold bars either. oh boy gents withdraw your money as it will eventually dissapear.
It's an honor to have you as a follower. Thank you for your encouragement.
I'm wondering if people who went through the financial crisis in 2008 had an easier time than me right now. The stock market is making me really worried because I've lost over $27,000 in just this month and I'm not making as much money as I used to. This is making me concerned that I might not have enough money saved up for my retirement since I can't add to my savings.
I'm quite concerned about the state of the banks right now. If a bank the size of SVB were to fail, my concerns would be much greater. My friend, who oversees a quickly expanding startup, was negatively impacted by the bank run. I've withdrawn more than $840,000 from my bank. An implosion could have detrimental effects because the FDIC only offers coverage up to $250,000. Currently, I desire to make stock market investments. Does anyone have suggestions about how I might move forward?
St.peter walks on water again .. !!!
Keep raising rates, cut Government programs and Fraud. We need leadership, not Bullshit.
Buying gold now when it’s overpriced i say wait Im thinking it has more downside
Nice to ❤❤❤❤❤❤❤❤
Please collapse !! Please !! I want to watch all these old people with their pensions lose everything !!! Overgrown children with nothing to do and all the money in the world taking up our resources getting fat off the corrupt system . They are so dependent on the system and their checks in the mail . This is gonna be great !!
Well Said! What happened to Geithner and these clowns with their silly "Stress Tests" and other goofy "TBTF" nonsense?
Why does anyone listen to this guy? He's a moron.
You've got to hand it to the Fed – that are geniuses. They get a lot of unfair criticism. CPI just came out 0.4% mom and 4.9% yoy. So inflation really was transitory all along. It only took small increments of rate rises to bring CPI down. 10% inflation brought down by raising rates to only 4%. Now real interest rates are nearly positive.
Peter really has to reassess his belief that QE creates rising prices. That has now been totally disproved.
The three failed US banks had more assets combined than all the failed banks at the height of the 2008 crisis combined, there is just no way US can escape what is heading its way this time
Totally unaccountable for anything. Most have no idea how at risk their money is .
One thing you should know is that a crash and bullish market provides equal high-yield potential, it's all about information and strategy application, I've seen folks make huge 7 figure profit in crashing market and pull it off much easily in bull market unequivocally the crash/recession is getting somebody somewhere rich
Can the Fed simply get a list of all the regionals that have a high amount of investments in long-term securities ? Is this not disclosed ? If not , which is probably the case, then why the hell would that not be demanded in these times ?
Even better, make the banks guarantees the deposit that they’re taking from there clients
Global financial markets have been significantly impacted by SVB's demise, prompting investors to sell off bank equities hastily and reevaluate their interest rate expectations. I am a $350,000 investor who is at a crossroads and wondering if it is wise to hold onto securities that are losing value. I want guidance on the best approaches to maximizing my returns in this negative market.
The only reason banks exist is to change worthless arbitrary numbers into worthless slips of paper. Unfortunately those of us living from paycheck to paycheck cannot afford to buy precious metals because its value is based on what??? The government issued currency.
More bank's will fail, this is just the start..
Look at all the stores closing and layoffs..
Government needs to back deposits.. people who puts money in the bank is not buying stocks so money needs to be safe
"a lot more bank failures"…consider this…the more failures helps the CBDC scam where total gov't control over everything in you life……ps: gold will banned or at leased to who/how can you sell???????????????????
Why are the banks being allowed all this rope to hang thrmselves with only to save them at the end, at our expense? I've been used and abused. I'm so mad.
In God we TRUST. Communism will end.
What an idiot, gold was not 1400 since forever
You guys need to find something else to talk about just another no name bank with bad management all the big banks are making windfall profits this bank deal is nothing to worry about
Peter is brilliant. Now, if banks would have paid depositors a historical 4% on their savings, maybe the folks wouldn't have pulled out their cash that caused the bank run. It was self-inflicted and remains problematic. FOMC has to hike rates.
Peter Schiff is China lap dog
take out your money before its too late and buy gold…
Repealing the Glass-Steagall Act in the late 1990s was a disastrous decision that led in the catastrophic failure of huge banks during the 2007-2008 financial crisis. To avoid another disaster, both Dodd-Frank and this Act must be quickly revived. What happened with SVB is just the tip of the iceberg in terms of what will happen if nothing is done to address the current situation.
I have literally heard of none of these banks that have failed. I don’t know what everyone’s so scared about, they made bad investments because of bad management & no oversight.
When you have all the people that are supposed to be watching over the banks trying to find dirt on Donald Trump, they’re going to drop the ball on the rest of their job.
Is it not likely that the Fed''s intention is simply to inflate away government debt while pauperising savers and small businesses ?