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Lawlessness and the Real Causes of the Banking Crisis-John Titus

John Titus: Lawlessness and the Real Causes of the Banking Crisis

Palisades Gold Radio:  6-23-2023

Tom welcomes an interesting guest who dives deeply into various financial topics; John Titus. He discusses noticing the liquidity issues in the banking system and three weeks later Silicon Valley Bank failed.

The Fed's balance sheet until 2008 was less than a trillion dollars, which was largely for settling transactions. However, in 2008, the balance sheet exploded. In 2020, the Fed created reserves far larger in scale and they started buying assets from non-banks.

Starting March of 2020, the Fed balance sheet ballooned from 13.5 trillion to 18 trillion, which was the cause of the inflation. They increased the money supply for households and ordinary businesses, and this wasn't just reserve balances on account at the Fed.

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 Silicon Valley Bank had 13 billion dollars on account spread over ten accounts. When the Fed bought 4.5 trillion from non-banks, it bought them through firms like Blackrock.

 Senate testimony showed that much of this money was in retail bank accounts. Money started out in business accounts but ended up in households. John doesn't believe that apps were behind the flows out of SVB; this seems like a cover story to him.

This isn't just a regional banking crisis; these were large banks in the top hundred. These were rich people banks that were failing, so the Fed had to intervene.

 People aren't talking about the whales in the pond; this is part of the game of favoritism.

He says, "The Fed is picking the winners and losers, with opaque policy decisions and no record keeping.

They get whatever result they want; we live in a lawless nation run by criminals."

John discusses some metrics that can help you determine if your bank could fail. It is considered wise today to have some exposure to physical precious metals. Banks are being consolidated into a much tighter group, where the JP Morgans of the world acquire smaller banks.

 Canada has changed the rules around mortgages, allowing huge extensions. Debt is someone else's asset and someone is going to be burnt. These types of policies are leading to a loss of overall confidence in the system.

John believes we're going to see more bank failures and inevitably lower rates. The Fed is all about managing perception to the benefit its private owners.

 Gold brings options to other countries if they want to move away from the dollar. Everyone today needs resources and Eastern nations are looking to consolidate their own resource supplies.

They are sick of the U.S. exporting inflation abroad.

 It would not surprise him if they come out with a resource-based currency alternative.

 Time Stamp References:

0:00 - Introduction

1:20 - Best Evidence & FRED

3:44 - Bank Crisis Parallels

6:47 - Banks & Fed Accounts

 10:30 - Pandemic & Bank Crisis

12:04 - Fed Chart - Top 0.1%

15:02 - Account Sizes & FDIC Risk

17:17 - Apps & SVB Transfers

18:43 - "Regional" Banking Crisis

21:56 - Wealth Concentration

 24:28 - Credit Suisse

25:54 - Rule Making & FDIC

27:30 - Bank Red Flags

29:03 - Protecting Your Money

31:52 - CBDC & Bank Consolidation

 34:40 - Rate Hikes & Volatility

37:04 - Hikes & Debt Rollover

 39:53 - Canada & Mortgage Rates

41:55 - Fed Hikes or Pivot

44:49 - Eastern Gold Buying

47:43 - Power Balance

48:29 - Wrap Up

Talking Points From This Episode

 - The Fed's balance sheet exploded in 2008 and again in 2020, leading to inflation and an increase in the money supply for households and businesses.

- Banks are being consolidated into a much tighter group, with larger banks acquiring smaller ones.

- Other countries are looking to move away from the U.S. dollar and create their own resource-based currency alternatives.

https://www.youtube.com/watch?v=TLoye1ooUp8

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