John Rubino – Central Banks Have Now Broken Something, And Investors Are Going To Flock To Real Assets Like Gold And Oil
John Rubino, Founder of the Dollar Collapse website and editor of his recently launched newsletter over at Substack, joins us to respond to all the market volatility around the banking sector, central banks tightening into a slowing economy, and the massive risks to pensions and the derivatives markets if more sectors unwind. All of these ongoing risks highlight why John believes that owning gold and silver or commodities like oil and uranium will be where investors will flock if conditions continue to deteriorate in paper assets.
We draw some comparisons from this recent bailing out of troubled banks to the bailouts of failed financial businesses in the 2008-2009 Great Financial Crisis, and point out how many issues were never fixed and that many lessons were not learned. Could systemic risks that are all so entangled on banking balance sheets get to spot where they become too big to bail?
.
Close To 190 Banks Could Face Silicon Valley Bank’s Fate, According To A New Study
Swapna Venugopal Ramaswamy – USA Today – March 19, 2023
“On the heels of Silicon Valley Bank’s collapse earlier this month, 186 more banks are at risk of failure even if only half of their depositors decide to withdraw their funds, a new study has found.”
“That is because the Federal Reserve’s aggressive interest rate hikes to tamp down inflation have eroded the value of bank assets such as government bonds and mortgage-backed securities.”
“The recent declines in bank asset values very significantly increased the fragility of the U.S. banking system to uninsured depositor runs,” economists wrote in a recent paper published on the Social Science Research Network.
“A run on these banks could pose potential risk to even insured depositors — those with $250,000 or less in the bank — as the FDIC’s deposit insurance fund starts incurring losses,” the economists wrote.
https://finance.yahoo.com/news/close-190-banks-could-face-163717073.html
In whiteboard situation……………..don’t matter which gold stock you own…………all will moon !!!!
To the moon is better than getting mooned by the miners everyday.
Agreed.
And Just Like That, The Tight Money Era Is Over… They broke everything …
John Rubino – 20 hr ago
“At the beginning of last week, everyone expected central banks to “tighten until something breaks”. By the end of the week it was clear that they’d already broken everything.”
“Two middling US banks imploded, European mega-bank Credit Suisse finally died a well-justified death, and ‘who’s next?’ speculation ran wild. And just like that, the era of tight money ended.”
“Now the world’s monetary authorities have broadened the definition of ‘systemic risk’ to cover pretty much anything. FDIC insurance has been extended to every bank account of any size. Credit Suisse is being bought for pennies on the dollar by rival Swiss giant UBS…”
https://rubino.substack.com/p/and-just-like-that-the-tight-money
It is not just the stock issue but now we have a liquidity issue. (Quantitative Tightening) It will be no laughing matter when the crash happens to assume the responsibility of trillions of dollars’ worth of loans secured by collateral which by the end of the day will prove to have dropped to a fraction of its previous worth. The destruction of values will be monumental. When the stock market was in its optimistic stage the participants forgot about the return of the pendulum. They were giddy with profits and failed to prepare for the mean and beyond. DT
And everything will be on the balance sheets of Central Bankers and serfdoms will be again alive and well.
The dollar broke well below its 50 day MA today as it put in its lowest close in 6 weeks.
https://stockcharts.com/h-sc/ui?s=%24USD&p=D&yr=1&mn=0&dy=0&id=p08180886284&a=1371739087
I went out and got a six pack of crispy tacos at Taco Bell before prices get worse.
+6
Uh-oh…. This is not a good look for First Majestic at all with needing to shut down the Jerritt Canyon gold mine that they paid a hefty price to Eric Sprott to purchase with the thought of turning it around. Unfortunately, even though it is in Nevada, which is a good jurisdiction, it has been a high-cost mine for them and it is looking more like what happened to Americas Gold & Silver when they bough the Relief Canyon Mine in Nevada from Pershing Gold and the costs were just more than projected.
(AG) First Majestic sold off about 15% in afterhours trading when they posted this news…. I was just thinking about getting positioned in AG for the first time in many years, but they are likely going to be in the penalty box for this, so I’ll pass…. This will likely drag SILJ down a big tomorrow as they have a hefty weighting to First Majestic in that ETF.
______________________________________________________________________________________________________
(AG) (FR) First Majestic Temporarily Suspends Mining Activities at Jerritt Canyon
20 Mar 2023
https://ceo.ca/@newsfile/first-majestic-temporarily-suspends-mining-activities
Premarket: Regional Banks are Good and Gold is Bad.
Hopefully miners have Better Sense.
https://tinyurl.com/52euebw7
NatGas Bottoming… .
PM Swing Top?
The bottom is in! DT😍
funny BDC…I came over to tell you I am …back…IN…lmao…there should be a boil double here….i may try some in/outs at expansion targets…A sucker for boil…glta
10 minute Boil…glta
Possible bottom test after 38.2% bounce.
(Or a Gartley Golden ‘C’.)
https://postimg.cc/TKCbqW2h
Bottom test coming.
agree BDC…i am just day trading it…one more lower low will be the panic required…hoped for massive volume and a whole new set of longs…..April low of lows…imho
This news flash just came in from the mainstream media, Rupert Murdoch at age 92 gets married for the fifth time only now it’s about love for both of them. Do you really think so, Give me a break! LOL! DT🤣
Does Rupert know he got married again?
Boil 10 min..https://tos.mx/RhSW0RF
5 figure losses in miners during a debt and banking crisis …. However the day before a Fed Meeting. You can see where the priority lies.
Nine Mile Metals is my worst of day. I checked a chart that said it was outside the lower Bollinger Band on no news or information. Maybe it was Rupert’s new marriage that DT mentioned.
Finally an intermediate low for NG. The Feb. high at 3.03 isn’t as important as the falling 10 week MA that caused it and that MA is now 2.58 as of yesterday so a bit lower today…
https://stockcharts.com/h-sc/ui?s=%24NATGAS&p=W&yr=5&mn=0&dy=0&id=p88355596994&a=1082379218
GDXJ’s low today happened at the 195 minute KAMA to the penny. The close was 1% higher.
https://stockcharts.com/h-sc/ui?s=GDXJ&p=195&yr=0&mn=4&dy=0&id=t1412077317c&a=1378119958&r=1679429918144&cmd=print
Hat tip to DT for posting the line “too big to bail” in a recent forum, and the reason I asked John about it towards the end of this interview.
It is quite possible if the derivatives markets do implode, in a cascading market decline, that more and more hazards would show up on the balance sheets of banks, and it all could swirl down the drain in a mess that could very well become “too big to bail.”
In that event…. I’m sure they’d wheel in a whiteboard with their totally great plan to help ease all the pain…. The Great Reset.