Registered User
Join Date: Dec 2007
Posts: 4,033
|
"Tip o' the Iceberg!"
I ask: "Is this banking 'crisis' (my words) just the 'tip o’ the iceberg' or is it 'much ado about nothing'”? Frankly, I see banking interests as quite interrelated. A "House of Cards," possibly? Just this morning I find out that Saudi Arabia will not further back Credit Suisse. Credit Suisse, that’s a huge banking enterprise! Oh, I realize we’re being reassured: “Your money’s safe.” From my perspective, I don’t believe everything I hear, from touts at the race track to government officials. After all, people have “vested interests” that can range from money to power to every stop in-between.
Philosophically, I tend to adhere to Hobbesian philosophy. In a nutshell, people are basically “selfish.” Many will do or say whatever it takes to enhance themselves. They’ll use what social scientists call “glittering generalities,” e.g., freedom, democracy, patriotism, prosperity, brotherhood, loyalty, etc. High-sounding phraseology that engender deep-seated values. As my Latin teacher would say, “Facta, non verba!” "Deeds, not words."
As we look at this current bank insolvency, i.e., SVB, one could possibly label it as an initial shock in a financial "earthquake." But as many know, there can be a series of "aftershocks." It’s still too early to know if those "aftershocks," financial, in nature, will occur.
Moreover, I don’t want to sound like an alarmist, but I would encourage people to be alert. For example, I remember reading that at the outset of the Great Depression there were some who were calling the economic downturn, caused by the stock market crash, Black Tuesday, to be a “temporary” dip. Not so fast.
Further, when the Fed kept "tightening the screws," there had to be some creaking in the "brick and mortar" banking enterprises. That piece of wood analogously was beginning to split. In that event, the overextended “weak hands” would feel its impact, first, i.e., SVB. Yet I have believe there are others out there "teetering."
As cited in an earlier post, the Fed is meeting next week. What will they do? What can they do? If they do nothing, will that allow inflation to get out of hand? If they do something, will that put in jeopardy those marginal banking interests and thus push them over the top, or should I say "the bottom."
Finally, we’re told that FDIC will cover all deposits in individual accounts up to 250k. But what, in the worst-case scenario, there is a crescendo of bank failures? Furthermore. I’ve lived long enough to know that nothing, I mean nothing is "etched in stone.”
In concluding, I’m not trying to foment a rebellion, this isn’t what the Romans called facio coniurationem.” I’m just trying, objectively, to put forth possible, plausible scenarios. I hope they do not come to pass, but to say they can’t or won’t is, in my opinion, foolhardy. In that light, I firmly believe (it is my own opinion) that one should have some gold in their portfolio. Frankly, some may label my possible prognostication as heresy, that the value of the dollar is in jeopardy. Personally, I’ll take my chances with a gram of gold as part of my "insurance policy," a store of value, just in case…
Yes, the question remains: “Is this just a temporary, short-lived event, soon to be forgotten, or the start of something, just the "tip o’ the iceberg"?
__________________
Walt (Teach)
"Walt, make a 'mental bet' and lose your mind." R.N.S.
"The important thing is what I think of myself."
"David and Lisa" (1962)
|