“We’re starting to see the real cost of printing money out of thin air with no solid backing and rewarding incompetence in the banking industry.”– John Karow, Precious Metals Advisor
Despite the Biden administration’s incessant reassurance that everything is a-okay, investors clearly see the economic dumpster fire through the fog of misdirection. The Silicon Valley Bank drama was merely a dress rehearsal for an entire banking system shakeup.
Watch this week’s The Gold Spot to hear Scottsdale Bullion & Coin Founder Eric Sepanek and Precious Metals Advisor John Karow explain what caused this disaster, how the contagion is spreading abroad, and why gold and silver demand is absolutely booming.
What Happened Exactly?
For many investors, it feels as though the entire banking industry was obliterated overnight. In reality, the faulty groundwork behind this collapse has been laid for over a decade. The Federal Reserve has been operating under the grossly misguided assumption that printing more money is a risk-free solution to all the country’s woes.
Spending reached astronomical levels during the pandemic and the Biden admin has kept its finger on the print button ever since. This directly resulted in record levels of inflation which the Fed sought to temper with aggressive rate hikes. In turn, sizable bank investments in bonds were diluted, causing many to default as depositors withdrew funds en masse.
What Happens Next?
The precise variables that resulted in the failure of SVB underly thousands of other banking institutions in the US and beyond. As a result, investors can expect to see much of the same moving forward. Growing distrust in the banking system will yield greater withdrawals which force banks to realize massive bond losses due to poor Fed management.
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Our so-called financial experts are repeating the same mistakes repeatedly as an exercise in insanity. The real costs of printing money without any real backing and incentivizing poor banking practices are being revealed. It’s a harsh reminder that there’s no such thing as free money, and the American people are paying that price.
“Free money isn’t free money. There’s always a cost”– Eric Sepanek, Scottsdale Bullion & Coin Founder
The Banking Collapse Spreads Globally
The contagion is spreading as the systemic issues toppling US banks are causing global institutions to buckle. Credit Suisse, one of the largest Swiss banks, was just injected with a $50 billion loan from Switzerland’s central bank. The credit line is buying time until long-term solutions are implemented.
Instead of moving in lockstep, the global financial elites are completely disjointed despite the immediacy and severity of the problem. While the European Central Bank increased interest rates by 50 basis points, the Fed is mulling over whether future rate hikes are the right move. There’s absolutely no coordination between world leaders on this matter.
The echoes of 2008 are reverberating across international markets as many fear a worldwide economic collapse. It’s tough to shake the thought as our financial “experts” are operating with the competence and composure of a headless chicken. Interest rates further amp up inflation, and bailouts only reinforce bad banking practices. There’s no good decision moving forward.
The Fed is at Fault
Whenever markets seem to settle to their lowest, a new floor falls out from under the economy, plunging everything deeper into uncertainty and chaos. The Fed is reaping the results of decades of feckless policies and lackluster attempts.
It’s painfully clear that our financial leaders have no plan. All of their band-aid solutions are reactive and ineffective. There’s no proactive strategy to minimize the incoming blow which the American people will have to take head-on and suffer the consequences.
Gold & Silver Demand Skyrockets
The economic situation is deteriorating at such a rapid and uncontrollable rate that even investors who have been sitting on the sidelines this whole time are finally acting. Gold and silver demand has been raging this entire week as investors seek out protection and stability – two fundamental investment goals which traditional markets can’t deliver right now.
Like the beginning of the pandemic, this astronomical surge in gold and silver buying is straining supplies. Availability is becoming the primary issue, highlighting the necessity for interested investors to put in orders quickly. This growing demand is resulting in higher gold and silver prices now. As of this writing on Friday morning, gold spot prices have jumped +2.08% today and silver spot prices are up +2.07% on the day.
Don’t Wait to Buy Gold, Buy Gold and Wait
A banking system on the verge of complete failure is an obvious sign of a deeply troubled economy. Investors of all experience levels recognize the necessity for safe-haven investments such as gold and silver to hedge against the collapsing economy. If you’re interested in discovering if gold and silver investment is right for your goals, request your FREE COPY of our popular Precious Metals Investment Guide.