Crisis breeds fascism
Bloomberg reported, “U.S. Bank Deposits and Lending Both Dropped Last Week Amid Turmoil.
“Deposits fell nearly $126 billion, while bank loans retreated. Decrease in overall lending was largest since June 2021.”
It was deliberate.
Democrats and RINOs never let a crisis go to waste because a crisis allows them to expand their powers. 9/11 is just one example. Bush and company used it to add a Cabinet-level department, make the unpatriotic PATRIOT Act law, and start two wars they later would abandon.
Washington does not wait for a crisis to come along. The deep state turned President Trump’s actually peaceful protest on the National Mall on January 6 into what they called an insurrection. DC now has the power to jail dissidents. They also beta-tested their facial recognition apparatus.
The border crisis allows Democrats to flood Republican states with illegal aliens by sending them to Wyoming and other states instead of sending them home.
I don’t know where to begin in enumerating the extensions of power under covid. It was overplayed by DC which jacked up the numbers by giving hospitals cash incentives to label deaths as being with (not necessarily from) covid. Next, they may make death with bunions a pandemic.
Of course, conflating an incident into a crisis goes back to William Randolph Hearst using the sinking of the USS Maine in 1898 to ignite America’s first world war — against Spain. We wound up with Cuba, the Philippines and other territories in no time.
This banking crisis is real but it was created by Bidenflation which led to soaring interest rates which led to the imperiling banks. You’ll wonder where the money went, when you make Joe Biden president.
Democrat-run Silicon Valley Bank and Signature Bank fell first but they are the tip of the iceberg.
Nouriel Roubini wrote, “Most U.S. banks are technically near insolvency, and hundreds are already fully insolvent.”
He is Professor Emeritus of Economics at New York University. His argument is banks bought too many low-interest bonds and made too many low-interest loans. These holdings lose value when interest rates rise creating what accountants call unrealized losses.
He wrote, “By the end of 2022, U.S. banks’ unrealized losses on securities had reached $620 billion, about 28% of their total capital ($2.2 trillion).
“Making matters worse, higher interest rates have reduced the market value of banks’ other assets as well. If you make a 10-year bank loan when long-term interest rates are 1%, and those rates then rise to 3.5%, the true value of that loan (what someone else in the market would pay you for it) will fall. Accounting for this implies that U.S. banks’ unrealized losses actually amount to $1.75 trillion, or 80% of their capital.”
People realize this and withdraw their money. This reduces bank capital. This worsens the crisis. As Professor Roubini said, “If depositors flee, the deposit franchise evaporates, and the unrealized losses on securities become realized. Bankruptcy then becomes unavoidable.”
The feds will intervene and scoop up the smaller banks and give them to the banks deemed Too Big To Fail. Those banks are infallible not because they are run by men of goodwill but because they buy politicians.
This creates a symbiotic relationship between business and government. This can be for the public good on a local level. On a national basis this is fascist because the government uses business to do the things it cannot do.
The best recent example is various federal agencies paying social media to censor news that would have ruined Biden’s campaign in 2020. Had the general public known about Hunter Biden’s laptop that revealed his father being bought off, we would be in the middle of Donald Trump’s second term.
Readers may say, well, we can withdraw our money and put in our mattresses. We can go to Dollar General and wire money to pay our credit cards — which handle our utility bills anyway. Who is going to know?
The government. Under a War on Drugs law, the government began the journey to a cashless society by requiring notification to the IRS of any cash transactions greater than $10,000.
The first thing to do in a crisis is to demand Congress and the president do nothing because every (bad word) crisis ends up robbing us of a right.