Rule Nothing Out
Over the last few weeks we have seen some worrying signs in the banking world as there is some turbulence around. Since the beginning of march the share prices have been tumbling as the uncertainty and confidence is waning.
Deutsche Bank has been in the spotlight today with the news that the cost of the insurance in place covering their debt has risen sharply. The EU cannot afford for the Deutsche Bank to default on their payments as this is not Credit Suisse which is not in the same league as this bank. Deutsche bank has roughly $1.5 trillion in assets compared to Credit Suisse that had $700 Billion.
The problem is if this stays in the news for too long then consumer confidence will be lost and this could end up turning into a bank run where customers withdraw their money. This is still early days however so this could go either way depending on the news and if they can being the confidence back or not.
Major bank runs happened in the 1930's when customers in the US withdrew their funds when the British moved away from the Gold Standard. This was a promissory note that your money would be worth x amount of gold to the value of the note. Customers thought the same was going to happen in the US so they withdrew their funds and purchased gold collapsing the bank.
What would people purchase today if this happened as Gold would still be a viable option along with Bitcoin and other cryptocurrencies. You can see why
institutions are so scared of crypto as once they have gone they may not return as there are alternative choices being developed.
Bank failures over the last 22 years have been fairly common except what we are seeing now are some heavy hitters coming under pressure. Washington Mutual Bank having $427 billion in 2008 was not small and those Dollars were worth more back then with purchasing value.
I do think many kind of expected turmoil at some point in the future as we have heard the term "the great reset" so many times over the last few years as you cannot just keep increasing your debt as it will never end well.
You can start to understand why BRICS is gaining popularity as why would you not what change from what is happening. The US Dollar is built on debt where as BRICS is using commodities like Gold, Copper, Uranium as their reserves. I am not saying the US Economy is a sinking ship, but it is definitely not one showing signs of health. The sad part is they have such a weak leader in Biden and can only blame themselves. How this will end we have no idea, but change is guaranteed to happen and it is happening very quickly as there are reports of another 20 countries waiting on BRICS membership. I will talk about this in my next post.
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In my opinion the safest way to save your money is to invest in gold because ever since I grew up I have always seen the price of gold go up, in crypto currency there also chance of lose if market gone crash or bear cycle starts or many other reasons but in gold investment you don't need to worry about it. One advantage of investing in crypto is that the value of your property increases immediately but in gold it is more chances that your investment remains stable or goes up but not as much as you can gain profit in crypto. As we know, the higher the risk, the higher the profit, the lower the risk, the lower the profit.
Deutsche Bank was in trouble again in 2008 but it's one of the largest bank in Europe and largest in Germany so i believe the German government will eventually step in
I do think that this will be the case again here as the Government cannot let it collapse. Still interesting to see these places wobbling.
I say let them fall. Most of my money is in a local credit union. I don't trust the big banks with anything these days. I've got my cash and precious metals at home and crypto as well. I think I will be okay.
The more banks failed, the more will be better for bitcoin and gold, both these asset class are the only choices for the investors to save their money. Looking forward to seeing it, how these things works. Gold is currently flying.
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