This Isn’t 2008
Posted March 13, 2023
This isn’t 2008.
In 2008, bank portfolios were filled to the gills with bad credit.
That’s not what happened this time.
Now, it’s an entirely different problem: bank portfolios are stuffed with bonds.
That’s right. Bonds.
Any other time this wouldn’t be a problem. But this isn’t any other time.
As you’ll recall, the Fed recently slammed interest rates to nil, causing a surge in deposits and loans for banks.
The banks, flush with cash, bought fixed-rate long-duration bonds.
Sure, there are riskier things they could’ve done with that money. But buying long-duration bonds without a hedge? Pretty bad idea… especially when you know rates will have to rise. Especially when rates DO rise the fastest they’ve ever risen ever.
Because, as the SEC has pointed out, when interest rates go up… the price of fixed-rate bonds plummet.
That explains why bank balance sheets have more holes than swiss cheese.
So in the event of a bank run, the bank is screwed.
Make no mistake. Your bank is holding those bonds, too.
Now, the scary part…
In his final warning, Jim Rickards reveals why the rich have long been pulling their money out of banks in anticipation of EXACTLY this.
Given the recent news, he urges all readers to get out of cash before March 15, 2023.
(Yes. That’s in two days.)
If there’s one thing you watch today, make it this:
Click here to see Jim’s last warning.
Tomorrow, we’ll talk about how to protect yourself from bank runs.