After spending the last two weeks looking into the banking crisis, I have watched dozens of YouTube videos from experts, learned to read and interpret economic data, and absorbed messages from professors of economics. I even revisited videos from Noam Chomsky and his warnings of dual existential threats to humanity: nuclear war and climate change.
Having learned how close we were, and still are, to the banking crisis, what have I learned? Those in power perpetuate conditions that allow them to continue. The banking and financial system wields enormous power, and it is not going away despite media bombarding us with information that the end is near. These are all excuses.
Many have said the next crisis will be big, and it may seem like everything is doomed. However, if you step out into the sun and leave all the information behind, you will realize that these messages only affect those who are connected. The world will go on, and banking will continue.
There are arguments out there that the banking crisis was brought about by a mismatch of banks investing in long-term, low-yielding securities. These cannot compete with the high-yield short-term securities currently offered. Therefore, the balance sheets of these banks are not safe, and depositors are running for safety by transferring their assets, mainly cash, to money markets and brokerage accounts.
The data does show this, but how many of us know if a bank is in trouble? In a recent hearing in Congress, three regulators from three different institutions were asked what happened to the three banks that failed. One congressman said that he did not believe they could tell if a bank will fail. This was coming from a congressman who had access to reports and knew what happened. How can depositors know in advance in order to withdraw their deposits?
Perhaps there was something else? If you were an investigator, you would look for commonalities in the three banks. It is obvious that two of the banks dealt in cryptocurrencies. How many want to bet that the third bank, SVB, is liberal to cryptocurrencies? Let’s not be cryptic about it, SVB banks were among the first to provide banking services to Coinbase and other crypto projects.
Is it interesting that all three banks are somehow crypto-related? Do you believe that the central banks, with enormous power at their disposal and combined experience unparalleled in finance and economics, could somehow create a self-inflicted wound to the financial system? Yet, it happened, and they managed to save it. Unfortunately, they could not save three crypto banks.
If you are not in the industry, you would think nothing out of the norm. If you are somehow connected to the crypto industry, you would know that it is difficult to obtain banking services if you are in this space. It is possible that those in power are trying to do something, such as trying to squash the rise of cryptocurrencies. There will be many projects that will fail, but a few will succeed, and it will change the world. History is repeating itself, and if you pay attention, you will notice that something is not right with all of these coincidences.