EXPOSED: The Shocking Truth Behind the Banking Crisis and the Fed's Actions - Connecting the Dots!

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by Capitalist Exploits
Tuesday, Apr 04, 2023 - 17:53

Chris MacIntosh | Insider #269 Newsletter


There’s a lot going on in the world right now. So much so that I honestly don’t know where to start or stop. It’s not like the events are simply newsworthy. Many are significant at a multi-generation level, which is why I find it all the more fascinating that while so much is taking place, the Western media is largely focussed on why mayonnaise is racist or how men pretending to be women are encouraged to get a pap smear… by the Canadian Cancer Society. Seriously, I’m not making this shit up. If you’re a sucker for pain, you can check it out.

So what is it that matters?

Let’s start with the banking crisis. I’m going to skip the beginning of this crisis and move directly to why the crisis exists and then the Fed’s actions and join some dots to see where this leads us.

unrealized gains

The bond buying binge that took place during the Covid scam had bankers thinking they need safety. They were right. They did, but as we’ve been saying for years now, safety no longer lies in sovereign debt markets. Quite the opposite, actually.

Here’s the thing. Most of these losses sitting on banks’ balance sheets, especially those in HTM (hold to maturity) bonds aren’t yet realised. The moment you have to realise them, you’re insolvent. Oops!

By the way, hold to maturity is like marriage to a maniacal abusive partner while living in a country where divorce is illegal. You’re stuck with it, beatings and all.

As is the case with most abusive marriages (I’m assuming here, don’t cancel me), the banks didn’t realise this until too late. Now, basically. You see, all was rainbows and unicorns so long as the short-end of the yield curve stayed at the zero-bound… or at least below that of the long-end. Along came the Fed (who suggested these banks buy treasuries in 2020 and 2021) and promptly began to raise rates. Sorry about that, folks.

The other thing to consider is this. The US banks aren’t materially different from banks elsewhere in the world, because ever since 2008, interest rates globally were manipulated lower. And so banks globally have been buying mispriced assets (bonds).

In fact, any institution which is required to buy “conservative” assets holds a bunch of this garbage. That includes, critically, pension funds and insurance companies. I say “critically” because both are going to get hammered over the course of this decade and will be key to the unravelling of the nanny, socialist state.

It’s kinda funny that just as Klaus Schwab and the global “elites” attempt to take the current Western socialist credit based fiat system and spread it globally, in doing so they accelerate its collapse. When this all becomes far too evident is when we risk international war… because when your economic prowess is in collapse mode, what else is left in your arsenal, other than a giant military?

jay pow

All of the above really is about fractional reserve banking, and if there is one thing that sums up fractional reserve banking it is this: it is a confidence game. 

The Fed, by effectively transferring more risk onto their balance sheet (backstopping banks and essentially replacing FDIC), just effectively “insured” roughly $18 trillion (deposits in US banks). If you think they are MORE secure today than they were before this, it’s quite possible you were dropped on your head as a child.

The ultimate sovereign debt crisis just scooped up and collectivised all the US banks into their vortex.

What else?

Well, consider this. So the Fed has come in and backstopped depositors in the US’s “strategic banks.” Remember that the Fed is owned by the big banks. It’s not a government organisation. It is a private company.

It is important to understand that not ALL bank depositors are backstopped. Only those banks that may represent a “strategic threat.” In other words, their buddies.

This is a poorly and thinly veiled heist. Tomorrow we'll continue with domestic implications so stay tuned!

Chris MacIntosh
Capitalist Exploits | Glenorchy Capital Macro fund | Subscribe to Insider | Rebel Capitalist Pro

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