The banking crisis is just starting. The implosion of the fraud-riddled FTX and the counterparty collateral damage that occurred was an early warning sign. But it is a glimpse of the malinvestment, accompanied by fraud and corruption, enabled by the nearly $9 trillion printed by the Fed since 2008. SVB and Signature were indicators that the force behind the nascent bank crisis has put the ball and play and is safe at first. While the Central Banks can try to stamp out lit fuses as they appear, it will prove to be a failed game of whack-a-mole. The Fed knew Lehman was going to collapse but it had no idea that Goldman and AIG would impale themselves on credit default swaps until the explosion occurred.
At some point there will “a hit heard around the world” and precious metals investors – gold, silver and mining stocks – will be win the pennant. Jason Burack – Wall St for Main St – and I discuss derivatives along with the meaning behind the massive accumulation of physical gold by non-western Central Banks:
I publish the Short Seller’s Journal and Mining Stock Journal. You can learn more about either newsletter here – Mining Stock Journal – and here – Short Seller’s Journal. I do all of my own research and I do not accept compensation or gratuities from the mining companies I cover and recommend. I continue to be highly bearish on the housing market. I also have firm conviction that the S&P 500 has another 50% downside before the bear market ends.