When financial systems become distressed marginal entities collapse first, naturally. Individual institutions may be marginal due to factors such as poor management, location and in the case of banks characteristics of bank assets. SVB was a marginal case but the forces which took it down are systemic, currently affecting the entire financial system. Banks often fail first due to inherent financial leverage but institutions across the entire system will become ever more distressed as distorted asset prices, a consequence of decades of central bank interest rates suppression, inevitably decline in the face of rising rates. And we are now at the point where central banks can't foment another speculative mania because nominal rates were driven to the ultimate ludicrous level of zero! We should now anticipate a secular resolution of decades of monetary distortion, meaning a very painful decade or two if history is any guide. Given that every currency in the world is now fiat we can anticipate an inflationary global secular collapse.
Tangible assets offer refuge, particularly liquid tangibles (e.g. precious metals). But most individuals and institutions must hold all the bad paper all the way down.
Hi, could you give a link to the FCA advice on not keeping > £10k in accounts? Thanks.
Here's a report on it https://www.fool.co.uk/2021/09/17/the-fca-wants-1-7m-brits-with-over-10k-in-savings-to-invest-instead-by-2025/ - they say it's about investing it rather than hoarding in cash but....
When financial systems become distressed marginal entities collapse first, naturally. Individual institutions may be marginal due to factors such as poor management, location and in the case of banks characteristics of bank assets. SVB was a marginal case but the forces which took it down are systemic, currently affecting the entire financial system. Banks often fail first due to inherent financial leverage but institutions across the entire system will become ever more distressed as distorted asset prices, a consequence of decades of central bank interest rates suppression, inevitably decline in the face of rising rates. And we are now at the point where central banks can't foment another speculative mania because nominal rates were driven to the ultimate ludicrous level of zero! We should now anticipate a secular resolution of decades of monetary distortion, meaning a very painful decade or two if history is any guide. Given that every currency in the world is now fiat we can anticipate an inflationary global secular collapse.
Tangible assets offer refuge, particularly liquid tangibles (e.g. precious metals). But most individuals and institutions must hold all the bad paper all the way down.