DOWN THE RABBIT HOLE: Let’s talk banks and what is going on

So, let’s talk about the banks and what is going on in the world of fiat banking. 

We do know that Wells Fargo had a big booboo a few weeks ago. 

That was caused by an alleged “technical issue,” which caused some Wells Fargo customers to see missing deposits in their accounts. 

It had to do mainly with customers using direct deposits and any fees caused by the issue was paid by the bank. 

Never heard what the technical glitch was all about. 

Then, on the hills of that fiasco came an even bigger one. 

The bailout when Silicon Valley Bank (SVB) went belly up. 

However, the White House said it was not a bailout when it stepped in to help. 

Senator Robert Kennedy from Louisiana said yeah, it was. 

As he said, “even though the White House is saying Silicon Valley Bank and Signature Bank were not bailouts, they were,” and he added something along the lines of “you can put perfume on a pig, but it is still a pig.” 

Biden had said money was not being provided by the American people, but instead by all the other banks in America.   

So, Kennedy said, “Well, Mr. President you know as well as I do there is no money fairy. There isn’t anything free.” 

Bottom line, these “other banks” are just going to pass on the costs of the bailout to its depositors. 

Biden also set up a $25 billion fund according to Kennedy that other banks that are in trouble can borrow from, this fund he says came from the banks. Guess where those costs are coming from? 

Like BlackRock, Vanguard and State Street are the top shareholders in SVB? 

Did you know these companies are also the top shareholders in Citibank, Chase, Prosperity, Wells Fargo, HSBC, and Signature (who also got a bailout around the same time), yea, you probably didn’t know it was that widespread who owns these banks did you? 

Oh, and CNBC reported that hours before the bank failed the bank paid its employees their annual bonuses.  

Silicon Valley Bank executives sold its shares just weeks before it crashed too, and investors tried to pull out $42 billion on Thursday before the bank collapsed on Friday.  

Another piece of information to put you on notice, the Chinese Communist Party had money in SVB that will be reimbursed, according to Janet Yellen, the US Secretary of the Treasury. 

And Reuters reported on March 13 that “SVB Financial Group and two top executives were sued on Monday by shareholders who accused them of concealing how rising interest rates would leave its Silicon Valley Bank unit, which failed last week, ‘particularly susceptible’ to a bank run.” 

And to make matters really scary, Oklahoma Senator James Lankford asked Yellen if the FDIC would help the smaller community banks if a bailout was needed and her answer paraphrased was “NO.” 

That leaves big money depositors stuck putting their big money in banks that have no interest in the American people because their money will not be made whole at the smaller banks if there is a crash. 

Back to Silicon Valley Bank, that bank was previously one of the largest banks serving the tech startup industry. 

It was also the 16th largest bank in the United States. 

What happened earlier this month was that after the bank was forced to sell bonds at a loss, its stock price plummeted and depositors panicked and that led to the bank run. 

Overall, this SVB crash was the second-largest bank failure in U.S. history. 

And we didn’t hear much about the Signature Bank fail, did we?  

Happened around same time as the SVB crash when on Sunday, March 12, Signature Bank, New York, NY was closed by the New York State Department of Financial Services, which then appointed the Federal Deposit Insurance Corporation as Receiver. 

Other things to watch for, the Federal Reserve has announced a July launch of their new Fed Now Service announced in October 2021.  

The too big to fail banks and all the large processors are onboard as is the US Treasury. The first week of April the Federal Reserve will begin the Fed Now Pilot Program.  

WHAT’S THAT?  

It allows early adopters to become certified participants to help the Fed confirm readiness.   

Fed Now is an instant paying processing system that is hoping to be the base of all digital transactions and acting as an “umbrella company” as one person explained “to manage all financial payment. This has been shown to be the gateway to all central banking digital currency.  

DID YOU KNOW THIS? 

According to an article from Feb. 13, on the Federalist Society website titled, “The Fed’s Operating Losses Become Taxpayer Losses,” it said 2023 is shaping up to be a big loser for money people.  

I think we’ve figured that out. 

The article read, “The year 2023 is shaping up to be a financially challenging one for the Federal Reserve System. The Fed is on track to post its first annual operating loss since 1915. 

“The annual loss will be large, perhaps $80 billion or more, and this cash loss does not count the massive unrealized mark-to-market losses on the Fed’s fixed-rate securities portfolio.  

“An operating loss of $80 billion would, if properly accounted for, leave the Fed with negative capital of $38 billion at year-end 2023. 

“If interest rates stay at their current level or higher, the Fed’s operating losses will impact the federal budget for several years, requiring new tax revenues to offset the continuing loss of billions of dollars in Fed’s former remittances to the U.S. Treasury. 

“The Federal Reserve has already confirmed a substantial operating loss for the fourth quarter of 2022. Audited figures must wait for the Fed’s annual financial statements, but a preliminary Fed report for 2022 shows a fourth quarter operating loss of over $18 billion.  

“The losses continued in January 2023, bringing the total loss since September to $27 billion, as shown in the Fed’s February 2 H.4.1 Report.  

“Since it raised the cost of its deposits again by raising rates on February 1, the Fed is losing at an even faster rate.  

“If short-term interest rates increase further going forward, the operating loss will correspondingly increase.  

“Again, these are cash losses, and do not include the Fed’s unrealized, mark-to-market loss, which it reported as $1.1 trillion as of Sept. 30, 2022.” 

NOTHING TO WORRY ABOUT HERE, HUH? 

And finally, pay attention to Executive Order 14067, titled “Ensuring Responsible Development of Digital Assets.” Biden signed it on March 9, 2022, and it went into effect in December 2022.  

It was the 83rd executive order signed by Biden, and it is basically about Central Bank Digital Currency. 

Digital currency and not the kind where you are just using your debit card, so keep up – it’s coming unless we figure something out. Ready, set, go! 

Rita Cook is a freelance writer for The Ellis County Press. She can be reached at rcook13@earthlink.net.