U.S. Is Facing A Pending Banking Collapse Because Of Biden's Failed Economic Policies

2 major banks failed within three days last week

File photo/Joe Biden (2023)

2/15/23

©️Val Ojeda, Writer

Half the Americans in the United States don't even have $400.00 for a rainy day fund just in case of an emergency. Now with the people, who do and have more are at risk of losing their deposits because of a pending banking collapse.

The United States suffered the second-largest bank failure on Friday 3/10 of last week and the third came in on Sunday night, March 12th. 

Today, bank stocks dropped by 30%. Biden, the Treasury, and the Fed are trying to cover this up. For fear of creating a panic, the actual damage has yet to be reported.

Biden created this by overspending and financing the war in Ukraine. This biggest hit to the economy hit us exactly two years later. Americans never repaid COVID relief funds. The stimulus payments did not reignite the economy, and unemployment payments emptied the Treasury. The economy was not being stimulated by spending. He continued to over print paper dollars, devaluing them. He raised the interest rates. Bonds froze. Banks had to recover by using capital to cover losses. When investors saw this activity, they ran for the hills.

For example, SVB Bank Had 197 billion in capital assets. 147 billion in deposits. Because of Biden's economy and the freeze on interest rates, they couldn't sell or transfer bonds. To cover day-to-day operations because they weren't making their 10% profit, to borrow from their capital to stay afloat. In one day, customers withdrew 42 billion dollars. One third of the bank's deposits need to be invested. That's when the FDIC took control and nationalized the bank. 

This is happening now with more banks coming down the pipeline. 

This happened in 2009 with Heritage Bank in suburban Chicago. The bank could not guarantee deposits because of its practice of at risk loans that the insurance could not cover. 

The FDIC, Federal Deposit Insurance Corporation, created in 1933 after the great depression to protect Americans deposits up to $250,000 raided and took control of Heritage Bank. 

Over a hundred FDIC representatives, auditors and federal agents, including the FBI, launched a top secret raid late at night, so the media couldn't report on the takeover to protect the banks' deposits. After taking control, the assets were sold to MB financials for pennies on the dollar. 

That's what sneaky Biden is doing, but he cannot do it forever because the Treasury has no money to continue to do it. The FDIC gets its money not from taxes, but from banking insurance premiums. That funding is guaranteed up to 10 billion a year. With one bank, SVB, the FDIC had to cover 147 billion in deposits, meaning the taxpayer now has to foot the bill!

The Biden administration practices "moral hazard” ; they got their first taste with TARP in 2009 that cost taxpayers a trillion dollars to bail out banking executives.

In 2023, the United States doesn't have the money to cover any losses. We are bankrupt. To cover the banks, this time it would come out of social security and defense. Then the cuts to federal aid and college loans. Cuts would then be made to welfare and Medicaid/Medicare. 

Somehow, it got lost over the weekend  that along with the collapse of SVB, an institution known as Signature Bank also laid an egg. And it wasn't golden, either. While it's no laughing matter, at least one person might be having a mild chuckle at this:

Word that the New York state regulators had closed down the bank came on Sunday, just two days after the California-based Silicon Valley Bank collapsed. The activity has generated fears that jittery depositors could try to withdraw their savings from lenders around the country, potentially destabilizing the banking system. But back in 2021, Signature Bank didn’t want one billionaire’s business.

“We witnessed the President of the United States encouraging the rioters and refraining from calling in the National Guard to protect the Congress in its performance of duty,” Signature Bank said in a statement at the time. “At this point in time, to ensure the peaceful transition of power, we believe the appropriate action would be the resignation of the President of the United States, which is in the best interests of our nation and the American people.”

CNBC reported that Signature Bank was deeply invested in volatile cryptocurrency and had $110.4 billion in total assets and $88.6 billion in total deposits as of the end of 2022. After Sunday’s move by state regulators, the Federal Deposit Insurance Corporation took control of the bank.

Schadenfreude is a hell of a drug, but it'll fade since no doubt, the junta will bail them out, mostly at our and our children's children's children's expense. It is inevitable, like the sun rising in the east, that the usual gang of idiot Leftists will blame America, capitalism, racism and of course Donald Trump on this and every other economic calamity under the sun. I feel insulted that Calypso Louie or even the Bro-Fo haven't opened their mouths to cast the blame on, you know who. Yet.

That said, the most noble, moral, upstanding individuals can create systems and processes, and over the course of thousands of years, cultures that lay the foundation for societies to grow and thrive. But even the best systems are always at the mercy of human nature, regardless of the safeguards that are put in place. And as history has shown us time and time again, we are always at the mercy of our foibles and frailties.

The blame game is underway. Banks are failing, they say, because it’s all Trump’s fault. Banks are failing because it’s all Biden’s fault. But here’s the truth: Banks are failing because, among other things such as the bank’s own bad risk management, politicians are greedy. Their greed and profligacy could wipe out a swath of tech innovation in the frenzy following the implosion of Silicon Valley Bank (SVB).

Donald Trump spent like he was playing with house money. But he unleashed the economy that more than made up for it  until COVID. Then Joe Biden came to office and said hold my beer.

You can’t do much about the balance sheets of a first-tier bank that finances Silicon Valley start-ups, but you surely can do something about politicians who hastened that bank’s free fall into receivership.

I'll take issue with Victoria Taft in blaming Trump for the profligacy of the budget, which is the sole purview of a Congress that has not actually had a budget for years. The Chinese COVID bailouts are something else entirely and you can argue he was a victim of circumstance, or not. Continuing . . .

The Fauci-induced Black Swan event known as COVID-19 left us on our heels. Then Biden made things worse by leaving billions in materiel and America’s prestige and sacrifice on the flats of Bagram Air Base. And then he did the same thing to the American taxpayers. He forsook billions, maybe trillions, in lost productivity and prosperity by smothering our domestic energy business. That dunder-headed move immediately enriched and empowered Vladimir Putin and his oil oligarchs. Vlad was swimming in money. Putin adjudged that Biden was so dumb that he may as well pick off the rest of Ukraine to get the old USSR back together. But then Putin picked up the phone and called Beijing, and now Xi and Vlad are best buds. Nixon is rolling over in his grave. And Joe Biden is now Volodymyr Zelenskyy’s bagman. We’re spending billions to hold up the most corrupt nation in the world. Ask Victoria Nuland and the Bidens how corrupt it is. 

They’d know.

Or ask Treasury Secretary and former Fed Chair Janet Yellen. In the days leading up to the SVB failure, she was Oprah in Kyiv, giving away more of our money. And you get a new dacha! And you get a new dacha!

Biden spent trillions for his global warming legislation to enrich all of his political cronies and NGOs who would do his party’s bidding for government money. The name of that bill mocked the American people to their faces. They called it the “inflation reduction act.” They were laughing at us.

These politicians knew the trillions in new expenditures would be like a millstone around the necks of the individuals who pay the bills around here. These greedy politicians (Democrats in this case) knew it would in fact trigger more inflation. And it did.

What came next? The Fed’s Jerome Powell had to rejigger interest rates to make money more expensive to tamp down demand. That, naturally, made everything more expensive for everyone. People who drive and wanted to buy a house and start their American Dream were back-burnered. The expensive money crowded out capital for other uses. And that more expensive money raised the cost of government, which put a greater burden on the little guy. It raised the cost of debt service on the U.S. debt. Within a few short years, by 2029, debt service will eclipse the amount we spend on our military. . .

Podcast co-host and investor David Sacks said a lot of people in Silicon Valley didn’t stop spending and their bank didn’t stop loaning. You are right on track if you think that sounds a bit like the old “liar loans” of the 2008 Wall Street investment bank catastrophe.

Funny she should mention 2008. Mercifully, it's been a long time since the name Rep. Barney Frank was in the news, and while disgusted to read it again, I was not at all surprised.

The 82-year-old Democrat is on the board of directors at Signature Bank, a New York lender that was shut down by state regulators over the weekend, becoming the industry’s third major casualty since Silicon Valley Bank was abruptly shuttered on Friday and the crypto-focused Silvergate Capital shut down a week earlier.

In an interview with Bloomberg late Sunday, Frank partly blamed cryptocurrencies, which hadn’t existed when he and fellow lawmakers in Washington were grappling with the collapse of Lehman Brothers in 2008.

“Digital currency was the new element entered into our system,” Frank told Bloomberg. “A new and destabilizing -- potentially destabilizing — element is introduced into the financial system. What we get are three failures.”

Frank didn’t address the fact that crypto had become a key growth vehicle for Signature Bank under the direction of himself and others — despite widespread concerns about the risks of the notoriously volatile sector. . .

Frank, a staunch Democrat and chair of the House Financial Services Committee during the 2008 crisis, was brought into Signature because of his deep understanding of the importance of financial regulation, according to the company’s website.

“Mr. Frank’s extensive experience as a Congressman, and particularly as Chair of the House Financial Services Committee, led the Board to conclude that he should be a member of the Board,” a statement about Frank’s appointment to the board reads.

Here's a little refresher on Frank from his lengthy and colorful rap sheet at Discover the Networks:

In 2004 Frank and 75 other House Democrats (including such notables as Nancy Pelosi, Maxine Waters, and Charles Rangel) took exception to George W. Bush’s public expression of concern about the risky loans that Fannie Mae and Freddie Mac were making. The Representatives sent the President a letter warning that “an exclusive focus on safety and soundness is likely to come, in practice, at the expense of affordable housing.”

In June 2005, Frank said the following about his and the House Financial Services Committee’s efforts to promote home-ownership for low-income people:

“Obviously, speculation is never a good thing. But those who argue now that housing prices are now at the point of a bubble seem to me to be missing a very important point. Unlike previous examples we have had, where substantial excessive inflation of prices later caused some problems, we are talking here about an entity, home ownership. Homes, where there is not the degree of leverage that we’ve seen elsewhere. This is not the dot-com situation, where you had problems when people invested in a business plan where there was no reality. People building fiber optic cable for which there was no need. Homes that are occupied may see ebb and flow of price at a certain percentage level, but you’re not going to see the collapse that you see when people talk about a bubble. So those of us on our committee will continue to push for home ownership.”

In 2008 Frank was asked how the U.S. government ought to address the nation’s financial crisis. He replied:

“I think at this point there needs to be a focus on an immediate increase in spending, and I think this is a time when deficit fear has to take a second seat. I do think this is a time for a very important kind of dose of Keynesianism. Yes, I believe later on, there should be tax increases. Speaking personally, I think there are a lot of very rich people out there whom we can tax at a point down the road and recover some of this money.”

Frank endorsed the massive government bailouts of the banking industry (under the $700 billion Troubled Asset Relief Program, or TARP) in 2008 and 2009, saying: “This is equivalent to what FDR had to do to save capitalism from its own excesses.” In February 2009, Frank pledged that he would not accept campaign donations from any banks that had received TARP money, or from political action committees (PACs) tied to such institutions. But in fact, he went on to take more than $40,000 in contributions from such banks and their PACs in 2009 and 2010.

And all of that is just the tip of the iceberg. By the way, look up Franklin Raines and Jamie Gorelick while you're at it. Barney Frank is not merely a know-nothing grifter. He's a rabid, ideologically-driven know-nothing grifter. And it's maniacs like him who have been in charge of our lives from within government at every level and more and more, in the less and less private sector.

Instead of being put in charge of the nation's finances and then given seats on the boards of banks, maybe Barney should run things he knows about and understands like bankrupt businesses. As Milton Friedman might say, if Barney Frank were put in charge of GLAAD, within 5 years, homosexual child molestation would cease to exist.

It is axiomatic that the more control these people have over our lives, the more catastrophes and calamities will explode, and most crucially, the more the blame will be placed on the things they railed against in the first place: America, the free market, limited government, individualism, western civilization and the Judeo-Christian ethic.

While I don't think he has a shot in hell, I'm liking a lot of things that this Vivek Ramaswamy guy is saying:

The normal rules of the road are clear: The first $250,000 are insured by the Federal Deposit Insurance Corporation. After that, the customer is liable for loss. But Silicon Valley wanted a different set of rules for itself.

So Sunday, venture capitalists and startup executives who stood to lose their SVB deposits worked overtime to push the narrative that there would be a bank run Monday if the bank’s uninsured depositors weren’t bailed out by the government Sunday. Narrowly, the gambit worked: Treasury Secretary Janet Yellen announced Sunday night that tech companies that deposited funds at SVB, even those that parked far too much money there without diversifying, would be made whole.

That’s crony capitalism changing the rules after the fact to help a select few. What’s more? Ninety-eight percent of political donations from these bailed-out firms went to Democrats. When President Biden talks about bailing out “small-business owners,” most people don’t have in mind elite venture-funded firms in Silicon Valley. . .

It’s a bailout, pure and simple. For years, SVB and its cronies lobbied for looser risk limits by arguing its failure wouldn’t create “systemic risk” and wouldn’t need special intervention by the US government. Yet now the same cronies claim SVB was “systemically important.”

A friendly reminder that everyday customers will have to shoulder the burden of this bailout through higher charges as they top up FDIC.

By selectively changing the rules after the fact for SVB, the US government incentivizes greater risk-taking by banks and depositors in the future.

There are real concerns about a potential bank run in America, but the right way to address those concerns isn’t to bail out tech startups who banked with SVB.

It’s by taking basic steps, like the Federal Reserve doing one of the few things it is actually supposed to do serving as the lender of last resort to American banks.

The deeper problem is that the Federal Reserve has been trying to play God for too long. Except with a fat finger.

Ramaswamy is connected to the Paul and Daisy Soros Fellowship. Doesn't negate the gravamen of his discourse, but still.

All of this is of course true. But the cultural rot, lack of morals and ethics, and a will to power has turned us upside down and inside out. Everything is so corrupt now that I don't think anything short of a complete collapse is going to put a stop to the madness. And then a whole other kind of madness will rule the day.

Something needs to be done to recover our economy. Biden has nothing but amateur's running the Fed and the Treasury who keep raising the interest rates because why…..to reduce unemployment. The view of a job as an asset to an everyday American. It does not make sense. 

If you have money in the bank, pull it out now. If you have investments, sell now. You will thank me for my advice later.

Since Biden took office food banks have increased 25% a year and they are running out of food. What's going to happen when another great depression hits? The soup lines? 

Vote Trump for 2024 because he has a plan to fix the financial crisis!

©️Val Ojeda is a Republican Author, Media Personality, Strategist and Consultant. Ojeda manages federal political campaigns also serving as President Trump's Hispanic Coalition Leader. Ojeda is also a businessman, entrepreneur and the founder of FAMA a 501c3 Chamber of Commerce. Ojeda served as law enforcement Veteran Officer/Detective.