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In this week’s news, the FDIC reports over half a trillion dollars in unrealized losses within the US banking system, with 63 banks on the brink of insolvency. Taylor Kenney dives into the implications of this alarming development to discuss what it means for the future of your deposits and the economy.

TRANSCRIPT:

Hi everyone. Thank you for being here. Very serious news today out of the banking sector and what it means for us. Half a trillion, over half a trillion in unrealized losses hits US banking system, FDIC says 63 lenders are on the brink of insolvency.

Now, this is huge news. And we’re going to break down why they want to bury it, but we won’t let them.

The FDIC, the Federal Deposit Insurance Corporation, the people who are responsible for making sure that our deposits are safe every time we see that gold little plaque on our banks wall on the door as we enter, we know in theory, our deposits are safe. In reality, not so much. Released a quarterly banking profile that tells us a lot about the state of the banking system in the United States, a lot of which we’d already assumed.

This is one of those moments where I actually wish I was wrong, being in this line of work covering these topics. I’m sure a lot of you who’ve been following us for a while feel the exact same way. Trying to tell your friends and family what’s going on, trying to have your loved ones see the reality of what’s coming but they don’t want to hear it.

While we know that if the FDIC is telling us themselves what’s going on, how much worse is it, even from what they’re telling us? Because this is the last thing they want to do, is let us know that the system is in crisis, that 63 banks are on the verge of insolvency.

And let’s talk about unrealized losses, because this is something that I think is huge.

And a lot of people still ask me questions about how it’s going to impact them. So I want to make sure we cover that. Unrealized losses increased by $39 billion to $511 billion in the first quarter alone.

Half a trillion, over half a trillion in unrealized losses. Now, as a reminder, unrealized losses are the value of an asset that the bank bought.

Let’s say they’re U.S. treasuries or held to maturity securities such as mortgage backed securities, whatever they might be that they bought at a certain price. And the market value today is worth less.

Now, the reason they’re unrealized is because they’re paper losses essentially, the losses are only realized at the point that the bank sells them at a loss.

So if the bank never has to sell them, they can just keep pretending that everything’s fine and that these losses aren’t real and that they don’t matter. But newsflash, they do matter. And they’re very real.

And it says right here that this is going to create liquidity challenges for the industry, aka when a bank has to sell one of these unrealized losses and it becomes a realized loss, people are going to realize there’s no liquidity. And by people I mean depositors. When there’s not enough liquidity for withdrawals, that’s when a serious problem occurs.

That’s when faith in that bank absolutely crumbles. And that’s exactly what happened to Silicon Valley Bank. And now we have 63 other lenders on the brink of insolvency.

And let’s just get this out of the way, because you know as well as I do that that loved one or that friend or whoever it is that already doesn’t believe any of this is going to happen, is going to say to you, well, half a trillion in unrealized losses, banks on the brink of insolvency.

That’s what the FDIC is for. There’s no way that our deposits would actually ever not be made whole. Well, let’s see what the FDIC themselves say about their deposit insurance fund. It says here

that the reserve ratio or the fund balance. So how much they actually have in their account relative to total insured deposits is 1.17%. 1.17% of all insured deposits actually exists in their account.

I mean, how many banks, how many banks have to fail before that? 1.17% is exhausted, 63 is at 63. Banks on the brink of insolvency before that money is gone?

The way I see this going, there’s really only two options. Option one the government lets banks fail. Everything actually fails. And you know what happens then? This 1.17%. All depositors get $1.17 for every $100 they deposited.

Or maybe you’re one of the lucky ones. Maybe your bank failed first. But if you’re not and you’re unlucky and that fund is gone, you get nothing.

And option two, which the naysayers love to say, well, this would always happen first before…and they might be right, is that the fed and the Treasury will come in. They will save your deposits to save the 1%, but the 99% the rest of us will be dealing with hyperinflation, the likes of which we’ve never seen before.

So option one saves the dollar but kills the economy. And option two saves the the top the elites, but kills the dollar. Either way, we slice and dice it. We lose. And to be honest, I don’t want to make this doom and gloom, but I’m really not sure where we go from here.

I think the only thing we know with certainty is that the banking system is going downhill.

We’ve known this for a while, but it is happening more rapidly, especially with the persistent inflation and geopolitical risks. I mean, you look at BRICs nations, they are over their stockpiling gold and looking stronger and stronger by the day. And then you look at us and we have 63 banks on the brink of insolvency, and half a trillion in unrealized losses.

It is not looking good for the outlook. So the only thing that I think we can be sure of at this point is that the future is not bright for the dollar or for the banking sector, which is why, again, if you haven’t already, it’s time to think about protecting yourself outside of the system, outside of these banks.

Because who knows if your bank is one of these, or if it’s one of the ones that’s holding the majority of these unrealized losses. Either way, if I were you, I wouldn’t want to find out.

If you have questions about any of this, or you want to learn more about how you can protect yourself outside of dollar denominated assets, outside of the system.

That is what we’re here for. We work with physical, tangible gold and silver, and we have a mission of helping people. And if nothing else, make sure that you continue to stay informed and share this message with your loved ones. If you’re not already like and subscribe. Let me know your thoughts in the comments below. As always, I’m Taylor Kenney with ITM Trading, your trusted source for all things gold, silver and lifelong wealth protection.

Until next time.

SOURCES:

https://www.fdic.gov/news/speeches/fdic-quarterly-banking-profile-first-quarter-2024

https://www.businessinsider.com/63-problem-banks-517-billion-unrealized-losses-fdic-interest-rates-2024-6