Is the banking crisis over? Watching the mainstream media, you would think so but looking at the facts paints a totally different picture. I saw an article from Weiss ratings which I subscribe to. Ihave found their research to be second to none. In it, they mentioned that 4243 banks and credit unions in the USA are vulnerable to failure. That means they could go bankrupt. Included in the list are 1210 institutions that have a red flag warning which means they are in danger of imminent failure. Are they fear mongering?  I don’t believe that Weiss fear mongers but calls them as they see them. Since 2008, of the 539 banks that have failed since then, Weiss gave advance warning on 535 of them. I went to the website and saw that they have a list of 567 troubled banks. Actually, four on the list have already failed and no longer exist so I guess the list should be 563.

I remember back in 2008 Weiss warned that Lehman and Bear Stearns were in danger of insolvency and those firms threatened lawsuits because of those findings. Of course, they had to drop the suits when they collapsed as Weiss had predicted.

This should come as no surprise to any of us as the deposits keep flowing out, loan deals are cratering, and M&A deals are virtually non-existent. To understand the gravity of this there are around 4800 credit unions and at the end of 2022 there were about 4135 banks in the USA. This means that 47.3% of banks and credit unions are at risk and 13.5% are in imminent danger according to Weiss.

While many will worry about their deposits (and rightly so) it appears that the Fed is more than happy to prop up the smaller banks with billions at this time so they can survive long enough to be taken over by the big banks. It appears to me that it is more dangerous to be a shareholder of these banks because if they do go bust it appears at this time (could change any second) that your deposit will just magically appear elsewhere, but the shareholders will have a 100% loss.

While many may think the big banks are safer- and they may be in the VERY short term keep in mind the big banks are more like gambling casinos than banks. Just the top 5 banks have derivative exposure of $182 TRILLION. It is likely that a 2% loss would wipe out all of their equity. You can go to US bank locations to see if your bank is loaded up with derivatives. This could be a ticking time bomb. Warren Buffett call derivatives “financial weapons of mass destruction”. Another thing I have noticed is that the small banks seem to take our privacy much more seriously as the large banks constantly ask about withdrawals and work far more closely with the government to watch all that we are doing financially.

I would be happy to share your bank’s rating with you if you would like to know. I have access to the ratings through my subscription with Weiss.

Having said all of this it appears to me that the stress we are seeing here is just another reason to want to OWN assets rather than counting on others promises to repay. Anyone who has been considering buying gold and silver has been given a gift in the last week or so as the prices have pulled back from current highs. Anyone who is interested in commodity-producing companies is also staring at possibly a nice entry point here also.

I believe that the idea that the Fed may raise rates more and that the economy is collapsing is leading to the idea that this will be bad for hard assets. I disagree since even if rates rise it will just likely lead to a further deterioration in the economy and the ability for debtors to actually repay the massive debts that they have built up over the years. When the reality hits the masses that most of the promises made cannot be kept that is when most people will ONLY want something that has intrinsic value and not a piece of paper or computer blip.

The central banks (those running the show) already know this is coming and have been buying gold in record amounts for years. In the first quarter of 2023 central banks bought 176% more gold than they did in the first quarter of 2022. This should be a MAJOR sign to all of us. Too bad most people fall for the paper games being played by the banks to make gold look “risky” to the average person even though they are buying in record amounts and they list it as a “riskless” asset on their books.

I also believe that silver is setting up for a massive blast-off. It will likely not happen until it comes to light that all of the fake paper contracts that have traders believing there is FAR more supply than actually exists is exposed. According to the the paper derivatives are 363.86 to each ounce of silver- giving the illusion of FAR greater supply than exists. Gold has 122.6 paper derivatives to each ounce of gold. They sell fictitious gold and silver into the “market” and manipulate the price of a hard asset with paper- the exact opposite of how this system is supposed to work. Since when does a derivative (an asset that has NO VALUE other than what it is investing in) determine the price of the asset that gives it its value? Only in a totally corrupt and fake “market”. This will eventually be exposed and when the level of fraud is exposed people will likely be stunned.

Those who recognize this is coming (central banks, major banks, billionaires and anyone who is paying attention) and PREPARE will likely fare far better than those who are counting on the status quo and other people’s promises.

This is obviously no time to bury your head in the sand but a time for some major contemplation of how to protect yourself from what appears to be headed our way.

Be Prepared!

Any opinions are those of Mike Savage and not necessarily of those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice. The information in this report does not purport to be a complete description of securities, markets or developments referred to in this material. The information has been obtained from sources deemed to be reliable but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.

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