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Maybe this is why Elizabeth Warren was so quick to protest the Capital One/Discover merger…

In an open letter out days ago Sen. Elizabeth Warren was quick to urge regulators to block the pending Capital One/Discover merger. In her letter, penned alongside other anti-corporate members of congress like AOC and Ro Khanna, she wrote that: “To protect consumers and financial stability, we urge you to block this merger and strengthen your proposed policy statement to prevent harmful deals in the future.” 

“This merger announcement comes less than a week after the Consumer Financial Protection Bureau (CFPB) issued a new report revealing the impact of credit card industry consolidation on consumers,” the lawmakers wrote. “According to the report, large banks charge higher interest rates than small credit card issuers, with ‘[n]early half of the largest credit card issuers’ — including Capital One — ‘offering cards with a maximum purchase APR over 30%,” her letter says. 

It continues: “Additionally, Capital One and Discover have concerning track records of mistreating customers and compliance failures. The lawmakers noted that in 2012, the CFPB ordered Capital One to refund $140 million to 2 million consumers with low credit scores and low credit limits who were misled into paying for costly add-on products. In 2023, Discover was required by the Federal Deposit Insurance Corporation (FDIC) to address ‘violations of, and consumer harm related to’ various consumer financial laws.”

And now, speaking of compliance failures, PYMNTS and FT have reported that JP Morgan was actually the first bank to try and make a deal for Discover. 

J.P. Morgan Chase considered acquiring Discover Financial before Capital One finalized a $35 billion deal for the company, the report says. The bank explored the acquisition for about a year to expand beyond traditional card networks but abandoned the plan due to challenges, including convincing Discover and facing regulatory hurdles.

“This would’ve been a truly company-changing deal,” a source told FT. 

Sources told FT that Dimon’s firm started looking at its bid for the company in the middle of 2021, but a year later has abandoned plans, as it was unable to convince Discover of the plan. 

Capital One’s acquisition of Discover, announced last month, aims to create a global payments network. This move could significantly impact the banking sector, especially in catering to Americans living paycheck to paycheck, a demographic that represents a large portion of the population across various income levels. The deal’s approval by regulators remains uncertain, with concerns about market concentration in the card issuing and payment networks sectors.

And call us curious, but we can’t help but wonder what Sen. Warren’s take would have been if her crypto loathing pal Jamie Dimon had been first to make a play at Discover…

Authored by Michael Snyder via The Economic Collapse blog,

By the time you are done reading this article, you may be tempted to tear your hair out.  A substantial portion of the U.S. population is deeply struggling in our current economic environment, but instead of focusing on helping Americans that are hurting, homeless and hungry, our leaders are going to great lengths to make things better for those that have no legal right to be in this country.  Our priorities are way out of whack, and U.S. voters are fed up.  Immigration has become the hottest political issue during this campaign season, but many of our politicians still don’t seem to understand why so many of us are so frustrated with what has been going on.

Let me give you some examples of what I am talking about.

It is being reported that more than half of all Americans over the age of 65 “are living on incomes of $30,000 or less a year”…

And, for some, the retirement crisis is already here. Just over half of Americans over the age of 65 are living on incomes of $30,000 or less a year, according to the Census Bureau’s Current Population Survey. The largest share — just under 23% — have incomes between $10,000 and $19,999.

Millions of elderly Americans are barely surviving at this point.

Meanwhile, the Biden administration has been flying hundreds of thousands of migrants that have no legal right to be here directly into the country…

It means that while record numbers of migrants were flowing over the southern border last year, the Biden White House was also directly transporting them into the country.

Use of a cell phone app has allowed for the near undetected arrival by air of 320,000 aliens with no legal rights to enter the United States.

It comes after a controversy over a 2022 transportation program in which the administration used taxpayers money to move migrants throughout the country on overnight flights.

You have got to be kidding me.

Let me give you another example.

Since 2020, the income needed “to comfortably afford a home in the US” has gone up by 80 percent…

According to Zillow, the income needed to comfortably afford a home in the US has leapt 80% since 2020, far exceeding what the BLS reports has been a 23% increase in median household income over the same period.

The real estate website found home buyers today need to make more than $106,000 a year, up $47,000 from 2020, a change driven largely by higher prices and borrowing costs.

“Housing costs have soared over the past four years as drastic hikes in home prices, mortgage rates and rent growth far outpaced wage gains,” said Orphe Divounguy, a senior economist at Zillow.

But instead of doing something about that, politicians in California actually want to provide interest-free home loans with no down payment required to newly arrived migrants…

Assembly Bill 1840 would change existing law to allow illegal immigrants to be eligible for the California Dream for All Fund, which provides interest-free loans for a down payment on a home for first-time buyers.

The bill was introduced by California Assemblyman Joaquin Arambula, a Democrat, who last month told GV Wire, a Fresno-based news outlet, that he “wanted to ensure that qualified first-time homebuyers include undocumented applicants.”

You have got to be kidding me.

Don’t stop reading now, because there is more.

On Thursday, we learned that the number of layoffs in the U.S. last month was the highest total that we have seen during February since 2009…

The pace of job cuts by U.S. employers accelerated in February, a sign the labor market is starting to deteriorate in the face of ongoing inflation and high interest rates.

That is according to a new report published Thursday by Challenger, Gray & Christmas, which found that companies planned 84,638 job cuts in February, a 3% increase from the previous month and a 9% jump from the same time last year.

It marked the highest layoff total for the month of February in data going back to 2009.

That is terrible news.

But instead of finding jobs for American workers, New York Governor Kathy Hochul wants to “prioritize” hiring newly arrived migrants for state jobs…

New York Governor Kathy Hochul is pushing a plan to prioritize hiring illegal aliens for state jobs by eliminating certain requirements like the civil service exam and high school diploma.

The aim is to expedite the process for illegal immigrants to secure state jobs once they have work permits.

You have got to be kidding me.

Last but not least, let’s talk about what is going on in Washington right now.

In preparation for the State of the Union address, a “large steel fence” was being put up around the U.S. Capitol…

Ahead of President Joe Biden’s State of the Union address this evening – what concerns do the political elites on Capitol Hill have that require security crews to erect a large steel fence around the immediate perimeter of the Capitol Complex?

In several posts on X, FOX News Senior Congressional Correspondent Chad Pergram said the steel, grated 12-foot fence around the Capitol Complex was erected on Wednesday night on the orders of the Secret Service.

Apparently our leaders in Washington have no problem with being protected by walls.

Unfortunately, our southern border has been left wide open and it is being estimated that approximately 10 million migrants have come pouring into this nation since Joe Biden entered the White House…

The number of illegal immigrants in the country has roughly doubled under President Biden. The United States had some 10.2 million illegal immigrants in 2020, and another 10 million have entered during Biden’s presidency. If the 20 million illegal immigrants were all in one state, it would be tied with New York for the fourth most populated state.

And here’s even worse news. If Biden wins a second term in office and there is no serious reform of U.S. immigration and asylum laws — both of which are very real possibilities — we can expect a continuing increase in the rate of immigrants crossing the border illegally.

You have got to be kidding me.

We already have tens of millions of people that are deeply suffering in this country.

To allow millions more to come marching in doesn’t make any sense at all.

We can’t even afford to take care of the people that we already have.  We are completely broke, and we have been adding another trillion dollars to the national debt about every 100 days.

We are literally committing national suicide, but most of our politicians don’t seem alarmed by this at all.

*  *  *

Michael’s new book entitled “Chaos” is available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.

Last night, Joe Biden gave an extremely dark, threatening, angry State of the Union address – in which he insisted that the American economy is doing better than ever, blamed inflation on ‘corporate greed,’ and warned that Donald Trump poses an existential threat to the republic.

But in between the angry rhetoric, he also laid out his 2024 election platform – for which additional details will be released on March 11, when the White House sends its proposed budget to Congress.

To that end, Goldman Sachs’ Alec Phillips and Tim Krupa have summarized the key points:

Taxes

While railing against billionaires (nothing new there), Biden repeated the claim that anyone making under $400,000 per year won’t see an increase in their taxes.  He also proposed a 21% corporate minimum tax, up from 15% on book income outlined in the Inflation Reduction Act (IRA), as well as raising the corporate tax rate from 21% to 28% (which would promptly be passed along to consumers in the form of more inflation). Goldman notes that “Congress is unlikely to consider any of these proposals this year, they would only come into play in a second Biden term, if Democrats also won House and Senate majorities.”

Biden once again tells the complete lie that “nobody earning less than $400,000/year will pay additional penny in federal taxes.”

FACT: Biden has *already* raised the tax burden on Americans making as little as $20,000 per year. pic.twitter.com/VrZ1m0rzG3

— RNC Research (@RNCResearch) March 8, 2024

Biden also called on Congress to restore the pandemic-era child tax credit.

Immigration

Instead of simply passing a slew of border security Executive Orders like the Trump ones he shredded on day one, Biden repeated the lie that Congress ‘needs to act’ before he can (translation: send money to Ukraine or the US border will continue to be a sieve).

As immigration comes into even greater focus heading into the election, we continue to expect the Administration to tighten policy (e.g., immigration has surged 20pp the last 7 months to first place with 28% in Gallup’s “most important problem” survey). As such, we estimate the foreign-born contribution to monthly labor force growth will moderate from 110k/month in 2023 to around 70-90k/month in 2024. -GS

SEE IT: Biden gets boo-ed while talking about his immigration bill. WATCH pic.twitter.com/O5FmkYx3xM

— Simon Ateba (@simonateba) March 8, 2024

Ukraine

Biden, with House Speaker Mike Johnson doing his best impression of a bobble-head, urged Congress to pass additional assistance for Ukraine based entirely on the premise that Russia ‘won’t stop’ there (and would what, trigger article 5 and WW3 no matter what?), despite the fact that Putin explicitly told Tucker Carlson he has no further ambitions, and in fact seeks a settlement.

‼️ Breaking: Putin wants a negotiated settlement to what’s happening in Ukraine.

In a surprising turn of events, Tucker Carlson could be the key to peace, potentially playing a crucial role in ending the current conflict🕊️ pic.twitter.com/IKN8ajlEUX

— Ed (@EdMagari) February 9, 2024

As Goldman estimates, “While there is still a clear chance that such a deal could come together, for now there is no clear path forward for Ukraine aid in Congress.”

China

Biden, forgetting about all the aggressive tariffs, suggested that Trump had been soft on China, and that he will stand up “against China’s unfair economic practices” and “for peace and stability across the Taiwan Strait.”

SOTU FACT CHECK:

Biden claims we’re in a strong position to take on China.

No president in our lifetime has been WEAKER on China than Biden. pic.twitter.com/Y73JsIzmM3

— Wesley Hunt (@WesleyHuntTX) March 8, 2024

Healthcare

Lastly, Biden proposed to expand drug price negotiations to 50 additional drugs each year (an increase from 20 outlined in the IRA), which Goldman said would likely require bipartisan support “even if Democrats controlled Congress and the White House,” as such policies would likely be ineligible for the budget “reconciliation” process which has been used in previous years to pass the IRA and other major fiscal party when Congressional margins are just too thin.

So there you have it. With no actual accomplishments to speak of, Biden can only attack Trump, lie, and make empty promises.

Authored by Catherine Yang via The Epoch Times (emphasis ours),

Special counsel Jack Smith has argued the case he is prosecuting against former President Donald Trump for allegedly mishandling classified information is “starkly different” from the case the Department of Justice declined to bring against President Joe Biden over retention of classified documents.

(Left) Special counsel Jack Smith in Washington on Aug. 1, 2023. (Drew Angerer/Getty Images); (Right) Former President Donald Trump. (David Dee Delgado/Getty Images)

Prosecutors, in responding to a motion President Trump filed to dismiss the case based on selective and vindictive prosecution, said on Thursday this is not the case of “two men ‘commit[ting] the same basic crime in substantially the same manner.”

They argue the similarities are only “superficial,” and that there are two main differences: that President Trump allegedly “engaged in extensive and repeated efforts to obstruct justice and thwart the return of documents” and the “evidence concerning the two men’s intent.”

Special counsel Robert Hur’s report found that there was evidence that President Biden “willfully” retained classified Afghanistan documents, but that evidence “fell short” of concluding guilt of willful retention beyond reasonable doubt.

Prosecutors argue the “strength of the evidence” is a crucial element showing these cases are not “similarly situated.”

“Trump may dispute the Hur Report’s conclusions but he should not be allowed to misrepresent them,” prosecutors wrote, arguing that the defense’s argument to dismiss the case fell short of legal standards.

They point to volume as another distinction: President Biden had 88 classified documents and President Trump had 337. Prosecutors also argued that while President Biden’s Delaware garage “was plainly an unsecured location … whatever risks are posed by storing documents in a private garage” were “dwarfed” by President Trump storing documents at an “active social club” with 150 staff members and hundreds of visitors.

Defense attorneys had also cited a New York Times report where President Biden was reported to have held the view that President Trump should be prosecuted, expressing concern about his retention of documents at Mar-a-lago.

Prosecutors argued that this case was not “foisted” upon the special counsel, who had not been appointed at the time of these comments.

“Trump appears to contend that it was President Biden who actually made the decision to seek the charges in this case; that Biden did so solely for unconstitutional reasons,” the filing reads. “He presents no evidence whatsoever to show that Biden’s comments about him had any bearing on the Special Counsel’s decision to seek charges, much less that the Special Counsel is a ’stalking horse.’”

8 Other Cases

President Trump has argued he is being subjected to selective and vindictive prosecution, warranting dismissal of the case, but prosecutors argue that the defense has not “identified anyone who has engaged in a remotely similar battery of criminal conduct and not been prosecuted as a result.”

In addition to President Biden, defense attorneys offered eight other examples.

Former Vice President Mike Pence had, after 2023 reports about President Biden retaining classified documents surfaced, retained legal counsel to search his home for classified documents. Some documents were found, and he sent them to the National Archives and Records Administration (NARA).

Prosecutors say this was different from President Trump’s situation, as Vice President Pence returned the documents out of his own initiative and had fewer than 15 classified documents.

Former President Bill Clinton had retained a historian to put together “The Clinton Tapes” project, and it was later reported that NARA did not have those tapes years after his presidency. A court had ruled it could not compel NARA to try to recover the records, and NARA had defined the tapes as personal records.

Prosecutors argue those were tape diaries and the situation was “far different” from President Trump’s.

Former Secretary of State Hillary Clinton had “used private email servers … to conduct official State Department business,” the DOJ found, and the FBI opened a criminal investigation.

Prosecutors argued this was a different situation where the secretary’s emails showed no “classified” markings and the deletion of more than 31,000 emails was done by an employee and not the secretary.

Former FBI Director James Comey had retained four memos “believing that they contained no classified information.” These memos were part of seven he authored addressing interactions he had with President Trump.

Prosecutors argued there was no obstructive behavior here.

Former CIA Director David Petraeus kept bound notebooks that contained classified and unclassified notes, which he allowed a biographer to review. The FBI later seized the notebooks and Mr. Petraeus took a guilty plea.

Prosecutors argued there was prosecution in Mr. Petraeus’s case, and so President Trump’s case is not selective.

Former national security adviser Sandy Berger removed five copies of a classified document and kept them at his personal office, later shredding three of the copies. When confronted by NARA, he returned the remaining two copies and took a guilty plea.

Former CIA director John Deutch kept a journal with classified information on an unclassified computer, and also took a guilty plea.

Prosecutors argued both Mr. Berger and Mr. Deutch’s behavior was “vastly less egregious than Trump’s” and they had been prosecuted.

Former White House coronavirus response coordinator Deborah Birx had possession of classified materials according to documents retrieved by NARA.

Prosecutors argued that there was no indication she knew she had classified information or “attempted to obstruct justice.”

In the latest indication that rank-and-file Republicans are ready to move on from an era of senseless and unconstitutional militarism, a whopping 84% of Texas GOP voters on Tuesday backed a resolution demanding that the Lone Star State reject any deployment of National Guard troops to a combat zone without a congressional declaration of war.    

The proposition, one of 13 non-binding questions put to Republican voters in Tuesday’s primary election, said, “The Texas Legislature should prohibit the deployment of the Texas National Guard to a foreign conflict unless Congress first formally declares war.“

The proposition’s presence on the Texas ballot is a testament to the growing momentum of the nationwide “Defend the Guard” movement, which is led by Bring Our Troops Home, a group of Global War on Terror veterans and like-minded civilians seeking an end to “endless wars.”

“To paraphrase that great frontiersman, Davy Crockett, the military-industrial complex can go to hell, and I’ll go to Texas,” said Dan McKnight, founder and chairman of Bring Our Troops Home and a veteran of an 18-month deployment to Afghanistan.  

With the help of allies like the libertarian 10th Amendment Center, Bring Our Troops Home is pushing state legislators to advance model legislation that would prevent governors from releasing National Guard soldiers into active federal duty in combat zones without proper congressional authorization.   

“‘Defend the Guard’ legislation does not nullify federal law. It only obligates the federal government to follow what is already federal law — Congress’ duty to declare war — as outlined in Article I, Section 8 of the U.S. Constitution.” — Defend The Guard

While no state has yet enacted such a law, the concept is gaining traction. Last week, the Idaho Senate passed the Defend the Guard Act in a lopsided 27-8 vote. The measure now advances to the Idaho House of Representatives for consideration.

“This is the third legislative body to pass Defend the Guard this year, following New Hampshire and Arizona,” wrote Bring Our Troops Home on the social media platform previously called Twitter. Our bill sponsor, [Ben Adams], a U.S. Marine who served two tours in Afghanistan, was present at our organization’s founding in 2019. It’s taken four years of labor to reach this point.” 

HUGE wins in Texas & Idaho for the Defend The Guard Act—a state level bill that will restore the Constitution and common sense to our foreign policy

Congrats to the @TroopsHomeUS Team! @DanMcKnight30

Florida needs to pass this NOW! https://t.co/s90UItbWI6 pic.twitter.com/tffAqM1FY9

— Anthony Sabatini (@AnthonySabatini) March 6, 2024

The Texas proposition’s overwhelming victory and the Idaho Senate’s passage of a Defend the Guard bill come weeks after three members of the Georgia National Guard were killed in a drone strike on their base in Jordan. According to a US Air Force airman the facility is a base for American drones used to conduct reconnaissance and targeting operations in Syria and Iraq. 

Aside from the steep toll that unconstitutional deployments take on service-members and their families, they also deprive states of National Guard resources during crises at home. As noted in a Defend the Guard deep-dive at Stark Realities:

“When Hurricane Katrina devastated New Orleans and the Gulf Coast of Louisiana and Mississippi in 2005, thousands of the states’ National Guard soldiers were deployed to Iraq. Mississippi’s 223rd Engineer Battalion returned to repair hurricane damage—but was ordered to leave its equipment in Iraq for use by other units.

In 2020, as Oregon endured some of its worst wildfires ever, half the state’s National Guard helicopters were in Afghanistan, including all its CH-47 Chinooks—dual-rotor choppers capable of carrying 26,000-pound payloads and ideal for use in firefighting. The Oregon Guard did what it could with Blackhawk helicopters that have one tenth the lifting power.”

The Defend the Guard movement is led by conservative and libertarian vets. “Every one of us raised our hands and swore an oath to the Constitution…and when it says Congress shall be the only body to declare war, we take that to heart,” said McKnight.  “And when Congress doesn’t do it, we understand bad things can happen: long, endless foreign misadventures.”

Authored by Brandon Smith via Alt-Market.us,

One of my favorite false narratives floating around corporate media platforms has been the argument that the American people “just don’t seem to understand how good the economy really is right now.” If only they would look at the stats, they would realize that we are in the middle of a financial renaissance, right? It must be that people have been brainwashed by negative press from conservative sources…

I have to laugh at this notion because it’s a very common one throughout history – it’s an assertion made by almost every single political regime right before a major collapse. These people always say the same things, and when you study economics as long as I have you can’t help but throw up your hands and marvel at their dedication to the propaganda.

One example that comes to mind immediately is the delusional optimism of the “roaring” 1920s and the lead up to the Great Depression. At the time around 60% of the U.S. population was living in poverty conditions (according to the metrics of the decade) earning less than $2000 a year. However, in the years after WWI ravaged Europe, America’s economic power was considered unrivaled.

The 1920s was an era of mass production and rampant consumerism but it was all fueled by easy access to debt, a condition which had not really existed before in America. It was this illusion of prosperity created by the unchecked application of credit that eventually led to the massive stock market bubble and the crash of 1929. This implosion, along with the Federal Reserve’s policy of raising interest rates into economic weakness, created a black hole in the U.S. financial system for over a decade.

There are two primary tools that various failing regimes will often use to distort the true conditions of the economy: Debt and inflation. In the case of America today, we are experiencing BOTH problems simultaneously and this has made certain economic indicators appear healthy when they are, in fact, highly unstable. The average American knows this is the case because they see the effects everyday. They see the damage to their wallets, to their buying power, in the jobs market and in their quality of life. This is why public faith in the economy has been stuck in the dregs since 2021.

The establishment can flash out-of-context stats in people’s faces, but they can’t force the populace to see a recovery that simply does not exist. Let’s go through a short list of the most faulty indicators and the real reasons why the fiscal picture is not a rosy as the media would like us to believe…

The “miracle” labor market recovery

In the case of the U.S. labor market, we have a clear example of distortion through inflation. The $8 trillion+ dropped on the economy in the first 18 months of the pandemic response sent the system over the edge into stagflation land. Helicopter money has a habit of doing two things very well: Blowing up a bubble in stock markets and blowing up a bubble in retail. Hence, the massive rush by Americans to go out and buy, followed by the sudden labor shortage and the race to hire (mostly for low wage part-time jobs).

The problem with this “miracle” is that inflation leads to price explosions, which we have already experienced. The average American is spending around 30% more for goods, services and housing compared to what they were spending in 2020. This is what happens when you have too much money chasing too few goods and limited production.

The jobs market looks great on paper, but the majority of jobs generated in the past few years are jobs that returned after the covid lockdowns ended. The rest are jobs created through monetary stimulus and the artificial retail rush. Part time low wage service sector jobs are not going to keep the country rolling for very long in a stagflation environment. The question is, what happens now that the stimulus punch bowl has been removed?

Just as we witnessed in the 1920s, Americans have turned to debt to make up for higher prices and stagnant wages by maxing out their credit cards. With the central bank keeping interest rates high, the credit safety net will soon falter. This condition also goes for businesses; the same businesses that will jump headlong into mass layoffs when they realize the party is over. It happened during the Great Depression and it will happen again today.

Cracks in the foundation

We saw cracks in the narrative of the financial structure in 2023 with the banking crisis, and without the Federal Reserve backstop policy many more small and medium banks would have dropped dead. The weakness of U.S. banks is offset by the relative strength of the U.S. dollar, which lures in foreign investors hoping to protect their wealth using dollar denominated assets.

But something is amiss. Gold and bitcoin have rocketed higher along with economically sensitive assets and the dollar. This is the opposite of what’s supposed to happen. Gold and BTC are supposed to be hedges against a weak dollar and a weak economy, right? If global faith in the dollar and in the U.S. economy is so high, why are investors diving into protective assets like gold?

Again, as noted above, inflation distorts everything.

Tens of trillions of extra dollars printed by the Fed are floating around and it’s no surprise that much of that cash is flooding into the economy which simply pushes higher right along with prices on the shelf. But, gold and bitcoin are telling us a more honest story about what’s really happening.

Right now, the U.S. government is adding around $600 billion per month to the national debt as the Fed holds rates higher to fight inflation. This debt is going to crush America’s financial standing for global investors who will eventually ask HOW the U.S. is going to handle that growing millstone? As I predicted years ago, the Fed has created a perfect Catch-22 scenario in which the U.S. must either return to rampant inflation, or, face a debt crisis. In either case, U.S. dollar-denominated assets will lose their appeal and their prices will plummet.

“Healthy” GDP is a complete farce

GDP is the most common out-of-context stat used by governments to convince the citizenry that all is well. It is yet another stat that is entirely manipulated by inflation. It is also manipulated by the way in which modern governments define “economic activity.”

GDP is primarily driven by spending. Meaning, the higher inflation goes, the higher prices go, and the higher GDP climbs (to a point). Eventually prices go too high, credit cards tap out and spending ceases. But, for a short time inflation makes GDP (as well as retail sales) look good.

Another factor that creates a bubble is the fact that government spending is actually included in the calculation of GDP. That’s right, every dollar of your tax money that the government wastes helps the establishment by propping up GDP numbers. This is why government spending increases will never stop – It’s too valuable for them to spend as a way to make the economy appear healthier than it is.

The REAL economy is eclipsing the fake economy

The bottom line is that Americans used to be able to ignore the warning signs because their bank accounts were not being directly affected. This is over. Now, every person in the country is dealing with a massive decline in buying power and higher prices across the board on everything – from food and fuel to housing and financial assets alike. Even the wealthy are seeing a compression to their profit and many are struggling to keep their businesses in the black.

The unfortunate truth is that the elections of 2024 will probably be the turning point at which the whole edifice comes tumbling down. Even if the public votes for change, the system is already broken and cannot be repaired without a complete overhaul.

We have consistently avoided taking our medicine and our disease has gotten worse and worse.

People have lost faith in the economy because they have not faced this kind of uncertainty since the 1930s. Even the stagflation crisis of the 1970s will likely pale in comparison to what is about to happen. On the bright side, at least a large number of Americans are aware of the threat, as opposed to the 1920s when the vast majority of people were utterly conned by the government, the banks and the media into thinking all was well. Knowing is the first step to preparing.

The second step is securing your own financial future – that’s where physical precious metals can play a role. Diversifying your savings with inflation-resistant, uninflatable assets whose intrinsic value doesn’t rely on a counterparty’s promise to pay adds resilience to your savings. That’s the main reason physical gold and silver have been the safe haven store-of-value assets of choice for centuries (among both the elite and the everyday citizen).

*  *  *

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With the imminent expiration of The Fed’s bank bailout facility (reminder they were 12-month collateralized term loans), and the ongoiong liquidity suck from The Fed’s reverse repo facility, the last two weeks’ excitement over at NYCB again is sure to have seen some depositors questioning their decisions (but we won’t know about that for a couple of weeks as The Fed needs time to ‘manage’ the data).

It turns out no… as The Fed claims that – on a seasonally-adjusted basis – total deposits rose by $16BN last week…

Source: Bloomberg

And while we question what a “seasonally-adjusted deposit” actually is, un-adjusted deposits rose by an even more impressive $86BN last week to the highest in six weeks…

Source: Bloomberg

But, things get a little more complicated when we remove foreign bank deposits, as while non-seasonally-adjusted deposits rose $61BN (large banks +$35BN, small banks +$26BN), seasonally-adjusted domestic bank deposits fell $5.6BN (large banks -$7.4BN, small banks +1.8BN)…

Source: Bloomberg

On an SA basis, it’s not been a good run for domestic banks (or it has been a good ‘run’)…

Source: Bloomberg

On the other side of the ledger, loan volumes re-accelerated last week, with large bank loan volumes rising $10.7BN and small bank loan volumes up $3.1BN…

Source: Bloomberg

US equity market cap remains dramatically decoupled from bank reserves at The Fed (which ticked up last week). The last time it was this decoupled did not end well for stocks…

Source: Bloomberg

And finally, as if you needed a reminder after this week’s NYCB debacle – despite the rebound off the lows again this week in regional bank shares, which must mean everything is awesome, right? – the regional bank crisis is still very much alive as evidenced by the red line below (without The Fed’s imminently expiring BTFP facility)…

Source: Bloomberg

…what else are big banks (green line) going to do with all that cash burning a hole in their pockets (although we do note a big cash drop at large banks – which includes NYCB).

As one veteran Fed watcher remarked “this is such a clusterfuck… deposits should be $500BN lower”

Source: Bloomberg

The bottom line is – this looks a lot like a ‘Small Bank’ crisis. The last time this happened, the crisis sparked a sudden $300BN ‘run’ in small bank deposits (this time it’s bigger!).

Is The Fed ‘hoping’ for a controlled bank-run this time – so as many small bank deposits are drained voluntarily, before they are drained all at once in a panic (and the Reverse Repo facility is empty, unable to provide any cushion)?