The Banking Crisis: “Fasten Your Seat Belts!"

[Teach]

In my opinion, the current banking crisis ain’t goin' away. There are just too banks out there that are highly-leveraged. Currently, these banks are, analogously-speaking, "flying under the radar screen.” Yet you can only play “whack-a-mole” for so long. Some banks are holding on by "the hairs of their chinny-chin-chins.” Another 25 basis-point rate-hike in May. Are you kidding me? As I’ve cited, over and over again, say what they will, the Fed is caught somewhere between “a rock and a hard place.”

As I continue, do I dare suggest that somewhere, certainly during this calendar year, the Fed might actually cut rates. Blaspheme, you say. What happened to their control-inflation priority?

Further, there are times, in the financial world, where matters are “becalmed”; it was like those early mariners who were caught in the “Horse Latitudes.” Matters go on day-after-day-after-day, basically unchanged. But these, I believe, are turbulent times. I get the feeling that the financial community, e.g., Fed, Treasury, etc, are currently "walking on eggshells.” All it would take…

In this same vein, I know that Europe has a paucity of banks, usually just a handful in each of the countries. Could that happen here in America? The cry could become, “The weaker banks are too small to save." The operative word may then become “consolidation." In that light, is “crypto” in our future? These uncertain times could become just the excuse to consolidate. A sea-change. Your “mom & pop” corner-bank, no more. Big bank branches everywhere. We will have reduced banking to just a few. The powerful. The connected.

In closing, I freely admit that this is just a supposition. A conjecture on my part that has, indeed, been opined by others. Just when you thought it was ok to go back in the water... As Harding said in the 1920 presidential campaign, “A Return to Normalcy.” Not so fast. I believe there is significant change ahead. The exact timing, I cannot say,

In closing, are CBDCs coming into our lives? It’s one thing to try to introduce that financial concept when there are hundreds and hundreds of banks, it’s a whole ‘other story when there are only a handful. Hark! Do I hear off in the distance the word, consolidation.

Finally, I say, "fasten your seat belts”; we’re in for a bumpy ride. We’ve left the “clear air.” There are signs of turbulence ahead.