Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

grarpamp grarpamp at gmail.com
Mon Mar 13 21:43:55 PDT 2023


"Signature Bank was illegally shutdown by the US Government
as part of its War On Crypto. -- Barney Frank"

CBDC's shilled as panacea.



As Banking Collapses Erode Trust, Bitcoin Fixes Moral Hazard

https://bitcoinmagazine.com/culture/bitcoin-fixes-failures-in-banks

As the underlying issues in our economy are exposed by recent banking
failures, Bitcoin stands as a trustless, alternative money...

    Michael Bury nails it... pic.twitter.com/aZPp6hsnzj
    — Radar🚨 (@RadarHits) March 13, 2023

As unrealized losses piled up, Silicon Valley Bank (SVB) gradually,
then suddenly became insolvent, followed by the collapse of Signature
Bank and people beginning to wake up to issues pervading our financial
system. Modern day bank runs, though digital, can force banks to sell
reserve assets at a loss, inevitably leading to insolvency.

    Banks are failing because they bought Treasuries. Full stop. The
"safest asset in the world" is the riskiest asset in the world.
pic.twitter.com/MdmmsH4bKa
    — Balaji (@balajis) March 13, 2023

As Balaji Srinivasan has pointed out, what was once considered the
gold standard for risk-free reserve assets is now on the precipice of
a potential new banking crisis. Is this the end of the U.S. treasury
as we know it?

If nothing else, the events over the weekend — from SVB’s failure to
issues with other financial institutions to alarming intervention by
the government — demonstrate just how fragile the system has become,
underscoring its dependence upon money printing even as it is being
undone by the low-yield, low-interest-rate environment that was caused
by the printing in the first place. The dichotomy is stark, but there
are lessons to be learned.
YOU CAN’T TAPER A PONZI: WHY THE LEGACY BANKING SYSTEM IS RIPE FOR FAILURE

The way the banking system works is, essentially, banks take your
deposits and lend them out at higher interest rates than they pay you.
They often keep reserves in U.S. treasury bonds, among other things,
and everything seems to work until it doesn’t.

    Kiss your rate hikes goodbye pic.twitter.com/FbutSa87lR
    — The_Real_Fly (@The_Real_Fly) March 12, 2023

With the Federal Reserve’s tightening cycle, raising interest rates
meant decreasing the price of bonds, devaluing banks' staple reserve
asset. When depositors come to redeem their deposits, banks are forced
to sell their assets at a loss, eventually becoming unable to stem the
bleeding.

Regional banks will bear the brunt of this hit, as demonstrated by the
recent collapse of SVB. Federal regulators are desperately trying to
prop up confidence in the system by backing 100% of depositors’ money,
but at what cost?

    From a source in close contact w JPM:

    “JPMorgan has been working all weekend in commercial customer
service and have opened 300 commercial accounts totalling over
$6.0billion.”
    — Lisa Hough (@lisa_hough_) March 12, 2023

Depositors are surely already fleeing to the big boys, which will
result in a more concentrated and fragile system than before. I think
everyone knows deep down that they won’t be able to save every bank
customer. Just how much money printing will the public tolerate in the
name of financial stability?

    The SVB crisis isn't bearish for banking

    Tomorrow, ~$170B will be returned to depositors

    Billions more will flow out of other unhealthy banks

    Those depositors will immediately look for new banks to park those funds in

    Healthy banks are licking their chops at this opportunity
    — Genevieve Roch-Decter, CFA (@GRDecter) March 13, 2023

In terms of equity holders, why would anybody want to hold stock in a
small bank at this point? If banks fail and the Feds choose to make
depositors whole while everybody else suffers, all of the risk is
transferred onto everyone but the depositors, incentivizing stock sell
offs and eating away at struggling banks’ risk-absorbing capital. This
move could force smaller banks into much worse positions than they
were before.
SYSTEMIC TRUST VS. SYSTEMIC TRUSTLESSNESS

The scenario playing out before us is a stark illustration of what
happens when trust starts to break down in a system fundamentally
based on the idea of trusting, rather than verifying. In modern times,
people think they need to hold their money in banks, but they have to
trust the banks to maintain effective risk-management strategies in
order to secure their deposits.

Bitcoin is fundamentally different. You can eliminate reserve
requirements, duration and interest rate risks, counterparty risks and
the like. There is no trust in Bitcoin. There is only code. It is
backed one to one with itself, and as long as you hold your own keys
properly, you don’t need to worry about a bank run.

As companies struggle to make payroll this week, I think this might
just be a spark that lights a fire behind Bitcoin. Trustless money
might just be the thing that helps to stem the tide of catastrophe in
a system where trust appears to be crumbling.


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