Investors are struggling to shake their concerns following a string of high-profile banking failures. It’s clear that confidence in the US banking system is reaching new lows as the American people withdraw their money at record rates.
Watch this week’s The Gold Spot to hear Scottsdale Bullion & Coin Precious Metals Advisors Joe Elkjer & Todd Graf explain the deep-rooted banking crisis, why no banks are safe, and where investors are hedging their bets.
Regional Bank Rejections
Every dollar deposited in a bank is a vote of confidence for the institution’s credibility. With banking deposits down over half a trillion dollars since Silicone Valley Bank’s collapse, it’s abundantly clear that people have serious reservations about the trustworthiness of the banking sector.
Regional banks are taking the brunt of the damage as the recent failures at PacWest and First Republic underscore. One of the main reasons these smaller banks are struggling is due to low deposits as investors seek out safer places to put their money.
A (Temporary) Shift to Larger Banks
Many investors are simply transitioning their deposits to larger banks such as JP Morgan and Bank of America where the illusion of security hasn’t been completely shattered. However, the cracks are showing as the biggest names in banking suffer from a rapid onslaught of withdrawals.
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The systemic issues dooming the banking sector are present everywhere. The regional banks fall first simply because their smaller financial footprints make them more vulnerable. The abject failure of the US banking system is going to affect all banks sooner or later. Smart money is seeking out safer places to store their savings now.
Gold and Silver Offer a Solution
“Gold and silver give you… peace of mind, privacy, protection.”– Precious Metals Advisors Joe Elkjer
The cracks in the foundation of the entire US banking system are too prominent to ignore. Depositors clearly think that keeping their money in these institutions is too risky right now. When looking for peace of mind, privacy, and protection, investors have placed their trust (once again) in physical gold and silver. In fact, the sharp rise in demand for precious metals has strained available gold and silver supplies.
These valuable precious metals hold inherent worth and tend to increase in value as the economy sinks. That’s a compelling investment option when the economy faces rampant inflation, an ongoing banking crisis, and growing de-dollarization.
Hedge Against Economic Turbulence
There’s no shortage of threats facing the dollar right now which means investors need to seriously consider where their wealth is placed. The stock market is too volatile for many investors, the government is devaluing its own bonds, and the banking sector has proven its incompetence.
For centuries, physical gold and silver have proven their merit as hedges against economic turbulence. In times of crisis, it’s always worthwhile to see what the biggest players are doing. With central banks buying gold at record highs, the message is clear: Precious metals can protect your wealth.
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