Federal regulators are plotting a course that could see America’s sturdiest banks tied to a sinking lifeboat. This plan, designed to compel banks to use the Federal Reserve’s discount window, aims to normalize the act of reaching for this financial lifeline amidst turbulent seas.
It’s as if the Fed is asking the healthiest swimmers to don faulty life jackets first, in a bid to make them seem less alarming to those already struggling to stay afloat. Our guest commentator explains why this strategy, while intended to fortify the banking sector against future storms, would endanger all US banks.
What’s going on with US banks?
Over the last month, loans outstanding in the Federal Reserve bank bailout program increased by $17.24 billion. It was the second month we’ve seen borrowing from the Bank Term Funding Program (BTFP) surge. And the pace of borrowing is increasing.
Imagine a bedroom. It looks clean and safe, but there is a monster under the bed that nobody notices. As host Mike Maharrey explains in this episode of the Friday Gold Wrap, that’s basically the condition of the US banking system right now. It appears “sound,” but a closer look reveals a financial crisis is still bubbling under the surface. He also talks about the recent run-up in the price of gold.
Unrealized losses on securities held by US banks exploded by 22% in the third quarter.
Of course, unrealized losses don’t really matter — until they do.
This is yet more evidence that the financial crisis that kicked off last March continues to bubble under the surface.
The financial crisis that kicked off in March continues to bubble under the surface.
Total outstanding loans in the Federal Reserve’s bank bailout program jumped by just over $5 billion in November.
The mainstream remains optimistic about the trajectory of the economy. Price inflation has supposedly been beaten down. GDP growth was even better than expected, and most economists have tabled their recession predictions. But in his podcast, Peter Schiff explained that it’s all an illusion. The financial crisis has already started, and it continues to play out beneath the radar.
Nobody understands that this crisis has started. But believe me, it has. This was the way the 2008 financial crisis started. It didn’t just happen when Lehman Brothers went bankrupt.”
The mainstream continues to insist that the economy is fine. Inflation is beat. A soft landing is in play. But in his podcast, Peter Schiff said we’re in the early stages of a financial crisis. It should be obvious, but very few people see it coming.
Problems in the commercial real estate (CRE) sector continue to bubble under the surface. This is a major stress point for US banks and could precipitate the next phase of the financial crisis.
A combination of high interest rates and declining tenancy is putting the squeeze on commercial real estate owners. As a result, banks hold a growing portfolio of delinquent CRE loans.
The Federal Reserve continues to bail out US banks as the financial crisis that kicked off last March continues to smolder behind the walls.
Banks borrowed an additional $2.2 billion from the Federal Reserve’s bank bailout program in August. This was on top of the $3.7 billion they borrowed in July.
After the August CPI report showed price inflation heating up again thanks to rising gasoline prices, Peter Schiff appeared with Jesse Kelly on First TV to answer the question: where are we heading? Peter said this story is going to have a tragic ending.