Banks are once again up to their old tricks - Is your money safe?

[Kakmakr]

                             Silicon Valley Bank collapse may not be the last. Blackrock CEO warns of 'slow rolling crisis'

Source : https://www.usatoday.com/story/money/2023/03/15/larry-fink-blackrock-warning-silicon-valley-bank/11479410002/

The funny thing is, back in 2008 the Banks were bailed out by the governments ...and now they are blaming the governments for their failure. I quote ==> " Aggressive fiscal and monetary policy since the 2008 financial crisis has contributed to high levels of inflation not seen since the 1980s. “To fight this inflation, the Federal Reserve in the past year has raised rates nearly 500 basis points. This is one price we’re already paying for years of easy money – and was the first domino to drop,” Fink said.

Yes, we all knew bailouts will only help for a few years and then the dominos of the Fiat system will start to drop. I hope people are seeing the signs and securing their wealth in decentralized (non-government controlled) technologies, like Bitcoin.  

Let's discuss....

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[EarnOnVictor]

I guess you are mixing some points here, banks tend to benefit more during inflation as the central banks would be forced to increase interest rates which means more money for banks. The FED has been aggressive in hiking the Federal Funds Rate since late 2021, which is a measure to save US businesses including banks in order to attract investors through the attractiveness of stocks and equity markets.

What happened to Silicon Valley is a different thing entirely, it only exposes some of the US banks and the level of the weakness of the banking sector. I believe it won't be business as usual for them onward.

Mind you, decentralized investment can only thrive if too many people are not involved, or else the government will clamp down on it. Imagine a huge percentage of the world's investors turning to decentralized assets, it's certain that the world's economy will collapse.

[hd49728]

Withdraw your money from banks to your home, store it in a security vault.

People are fearful and panic so that they withdraw money from bank then buy gold and silver. It is classic reaction when people lose their faith in fiat currency and banks. They will find alternatives such as precious metals like gold, silver and in modern world, since 2009, they have another option that is Bitcoin.

It does not require too much space like gold or silver bars to store. With Bitcoin, you can store it very simply and less heavily than with gold or silver bars. You can bring your bitcoin, its backup around to everywhere.

Robert T. Kiyosaki tweeted as below

SILICON Valley Bank -SILVERGATE Bank-SIGNATURE Bank. They went WOKE and went BROKE. Crash and Crisis just starting. Pensions, IRAs, 401ks went WOKE going broke. Buy more G,S, BC.  TAKE CARE.

[pixie85]

Withdraw your money from banks to your home, store it in a security vault.

That's taking it into extremes. We don't need to go all the way with this. Make sure most of your money is secured somewhere like in a bank deposit box, since those aren't counted into bank's liabilities and as far as I know cannot be taken away in case of bankruptcy.

I have some money on my account. It's less than 10% of all that I have, but I do it because it's convenient. If I had all my money at home in a vault, every time there's a bill to pay I'd have to drive to a nearest post office to pay it. The current system doesn't give you many options. You can say you won't use the bank but you'll either have to use another service like paypal or pay additional fees at the post office and waste your time and money getting there.

[AverageGlabella]

Your money will never be safe if it is above the amount your government guarantees. A lot of banks do not offer this protection because they do riskier investments and Silicon Valley bank was one of the banks that provided riskier banks and that is why they have not been around as long as some other banks but it is why they are getting bailed out already. I know they have been around for multiple decades but they are not a secure bank when they offer risky loans to start up companies but every bank is risky and they are getting more risky with the living costs rising.

[Artemis3]

If you check the history of banks and specially modern banks, you know its all designed for this. Since the legalization of fractional reserve (which until the 19th century was illegal), institutions were made to give the ponzi scheme better footing.

If the scheme fails in your branch, because people learned about it, a higher institution should exist where they can ask loans to keep the scheme going on. The Central Bank is meant to aid those banks, so in theory a bankrun should not affect a whole country. But said Central Bank also practices fractional reserve so, those guys formed the IMF and World Bank just in case with the capacity to aid those central banks.

It was never about deposits. People should be aware of the danger of giving money to a bank, it is a loan, they only promise to pay it back when you want to withdraw.

Just like any other scheme, when the people learn the truth and want out, it collapses. Imagine if your usual multi-level ponzi schemer had State backing, that's what banks are.

The idea that a bank would just custody your money (for a fee), was pretty much abolished more than a century ago. Now they even pay you because they need the reserve which brings them a potential 10x increase in phantom money, aka credit expansion etc.

Whats worse? Yes, exchanges are doing this as well... And "stable" tokens. Ponzi backed on ponzi backed on ponzi.

[Nwada001]

After the FTX incident, most people who are not throughly Bitcoin believers and don't know the full purpose of decentralization run back to the banking system as the safest. Now that the SBV has collapsed, people are calculating whether to choose Bitcoin as the safest way to save or not. One incident instilled different kinds of fear in the lives of the masses, especially those who actually didn't know what they wanted exactly. 
 
No matter how we rephrase the situation the fact will still remain the same, we will still need the banking system in one way or the other, that's if the world economy must stand then Banks needs to keep on functioning. 
 
Bitcoin is the safest for we Bitcoiners, just as @Earnonvictor have said if we all run to Bitcoin what do you think will happen to the world economy? 
 
We are all responsible for our security be it crypto savings or Bank savings, even having a safe deposit box in our home will also attract thefts to our home knowing that we are now saving in our home. 
 
To me Decentralized system and crypto in general to some point is the best option but am also not completely against the banking sectors. 

[Macadonian]

The idea that a bank would just custody your money (for a fee), was pretty much abolished more than a century ago. Now they even pay you because they need the reserve which brings them a potential 10x increase in phantom money, aka credit expansion etc.

Whats worse? Yes, exchanges are doing this as well... And "stable" tokens. Ponzi backed on ponzi backed on ponzi.

Yes and if you gave this idea to some one with out mentioning the word bank they would call it a ponzi scheme. Eventually every bank will fail because when a big part of their customers leaves to another bank trying to compete and offering better rates then they will not have the reserve and will fail. The government can then decide to bail them out or let them die. Both are not great for the economy and then the cycle continues with the bank which offered better rates which they cannot sustain and eventually their business fails and a lot of people get hurt again.

[Don Pedro Dinero]

Withdraw your money from banks to your home, store it in a security vault.

This is impracticable for those who have large sums of money.

Is your money safe?

In the bank, it depends on the amounts, if you only have €1,000 (or dollars), nothing will happen. In case of bankruptcy or bailout or problems, people who have large amounts could lose a good part, but these people already know this and it is normal for them to diversify, although someone always ends up falling, as we have seen in the case of SVB.

The point is that your money is safe because it is not in the bank. It's an entry in the bank's accounts that doesn't physically exist and that the bank has already lent out, that amount multiplied several times over, so it's all about trust and people not rushing in en masse to take out large sums of cash.

As people use less and less cash, the latter is increasingly unlikely, and trust is already taken care of by governments and central banks to keep the ponzi system going.

The curious thing is that within the swindle that it is, let's think that since 1971 the world has reached a great level of economic development, which was when Nixon abolished the convertibility of the dollar for gold.

[crunck]

VSB crash as well as market crash projects, luna, FTX crash doesn't mean crypto or bitcoin will crash. Likewise, the collapse of the SVB does not mean that the world banking system or monetary system will collapse. I still see rich people, billionaires... people with billions of dollars still trust the bank, while you and I only have a few thousand dollars and are afraid of the bank. Bitcoin or decentralized systems are great in many cases, but we also need banks.

[Artemis3]

The idea that a bank would just custody your money (for a fee), was pretty much abolished more than a century ago. Now they even pay you because they need the reserve which brings them a potential 10x increase in phantom money, aka credit expansion etc.

Whats worse? Yes, exchanges are doing this as well... And "stable" tokens. Ponzi backed on ponzi backed on ponzi.

Yes and if you gave this idea to some one with out mentioning the word bank they would call it a ponzi scheme. Eventually every bank will fail because when a big part of their customers leaves to another bank trying to compete and offering better rates then they will not have the reserve and will fail. The government can then decide to bail them out or let them die. Both are not great for the economy and then the cycle continues with the bank which offered better rates which they cannot sustain and eventually their business fails and a lot of people get hurt again.

Actually if it happens slow enough (Bitcoin adoption, that is) it does give them time to shrink. So at the very least, there are too many banks and naturally many will have to go since the era has changed, its not the rule of fiat anymore.

But if it happens product of some panic event, yeah many can go bankrupt at the same time overwhelming the capacity of the higher institutions to aid. Of course they will want the all mighty State to help, so you may end paying with your taxes (again) to keep the scheme running for a bit longer...

[un_rank]

The main factor that has been running the banking system for decades now is trust. The trust customers have in the system that their money is safe and they can get it anytime they wish to withdraw which extends to trust in the fiscal policies that they come up with to give economies a boost, and boost the value of the money as well. That trust has been on thin ice from before the turn of this century and the more it wanes, the closer the banking system is to collapsing.

This brings up the topic of alternatives, where else can we safely store our money where inflation and bad policies cannot get to it. Bitcoin? Precious metals? Real estate? Some other investment?
My answer is a combination of all. We need to hold some percentage of fiat, and cannot throw our remaining assets into one box. Keeping a bit in Bitcoin and other bits in other investments we trust would give a healthy balance of diversification.

- Jay -

[bittraffic]

Now that they see something snapped in the banking system, the FED may drop raising rates next week.

It's gonna be a total disaster when every person realizes his family might not eat anything next week because his money is gone. But the bank depositors I think are the only ones the government is bailing out and not the banks AFAIK. $250k from FDIC.
People have to know they still get thier money or else its anarchy on the streets.

[Aanuoluwatofunmi]

Keeping money with banks now is one of the biggest risk one can take especially when the amount is much left with the centralized financial institutions, now that there have been discovery of a secured decentralized digital network that cab help keep our assets safe and free from every form of government interference and yet some people were still holding their entire finances with banks or centralized exchanges means they need an eye opener to give them a practical example from the past experience others have with banks ceasing their money till date without releasing it.

[panganib999]

After the FTX incident, most people who are not throughly Bitcoin believers and don't know the full purpose of decentralization run back to the banking system as the safest. Now that the SBV has collapsed, people are calculating whether to choose Bitcoin as the safest way to save or not. One incident instilled different kinds of fear in the lives of the masses, especially those who actually didn't know what they wanted exactly. 
 
No matter how we rephrase the situation the fact will still remain the same, we will still need the banking system in one way or the other, that's if the world economy must stand then Banks needs to keep on functioning. 
 
Bitcoin is the safest for we Bitcoiners, just as @Earnonvictor have said if we all run to Bitcoin what do you think will happen to the world economy? 
 
We are all responsible for our security be it crypto savings or Bank savings, even having a safe deposit box in our home will also attract thefts to our home knowing that we are now saving in our home. 
 
To me Decentralized system and crypto in general to some point is the best option but am also not completely against the banking sectors. 

Exactly, this divide and cognitive dissonance has been fucking with so many people's heads nowadays, specially those who dipped their toes both in banking and cryptocurrencies like a lot of us in this forum, including myself. Although for me, the case with SVB failing, though a testament to how feeble the foundations of the banking system are, is an isolated case that isn't really indicative that the whole banking system is going to fail sooner or later, although it could cascade series of bank runs and collapses in the industry which could then lead to the collapse of the banking system. In any case, the economic crisis has been held on for too long it's finally seeping through the cracks of the barricades. Good thing crypto's still a thing otherwise a lot of us here are fucked royally like the collapse in 2008.

[Ojima-ojo]

After the covid-19 lockdown, the Fed gave out a chuck of the bailout to both state and financial institutions from the federal reserve and what most states and other institutions that receive the bail out failed to understand is that those bailouts are not free money but a loan sponsored by the Central banks to aid and ease the impact of the lockdown, with one-year interest-free duration.

So the interest and principal repayment of that loan is really eating the banks deep,  and most of them are collapsing into other banks and selling off their assets and shares just to avoid running bankruptcy.

Some states are having a backlog of unpaid salaries due to the unavailability of funds due to loan repayments.

[Falconer]

Keeping money with banks now is one of the biggest risk one can take especially when the amount is much left with the centralized financial institutions, now that there have been discovery of a secured decentralized digital network that cab help keep our assets safe and free from every form of government interference and yet some people were still holding their entire finances with banks or centralized exchanges means they need an eye opener to give them a practical example from the past experience others have with banks ceasing their money till date without releasing it.

Even if you've said something true, you can't really expect everyone to have cryptocurrency as a store of value. They can invest with crypto, use it as a means of payment, while crypto has more risks than just saying its advantages.

One can still expect a bank to freeze their account when something happens to an account in its name, but you can't expect your crypto to be safe forever without a high level of care about security measures. So changing the mindset of someone who already believes strongly in centralized banking towards crypto independence is difficult, even if some would consider it but it is highly unlikely to expect 50% of bank users to convert to crypto.

[South Park]

Now that they see something snapped in the banking system, the FED may drop raising rates next week.

It's gonna be a total disaster when every person realizes his family might not eat anything next week because his money is gone. But the bank depositors I think are the only ones the government is bailing out and not the banks AFAIK. $250k from FDIC.
People have to know they still get thier money or else its anarchy on the streets.

At the end the government is still handing the money to the banks, if they really wanted to benefit the bank depositors they could give them the option to just send them a check, a wire transfer, cash or even bitcoin, but they are giving the money to the bank which will allow them to do all their dirty tricks all over again, so it is obvious governments are still helping the banking industry and they will keep doing so until the collapse becomes inevitable.

[thecodebear]

Just saw that the FDIC is only willing to sell Signature bank to someone who won't allow the bank to have any future dealings with crypto. Damn. So it seems like govt takeover of that bank was maybe more so just to forcibly shutdown its crypto services rather than cuz it was failing. That's some crazy stuff. Govt taking extreme anti-crypto actions. Trying to force the banking industry out of engaging in the crypto industry.

Crypto industry is gonna have to build all its own services with govt trying to indirectly stop the blooming industry. Gonna be a few billionaires made from whoever can build out the future of crypto services. Talking about real services here, not scammy GambleFi/"DeFi" token-apps.

Great time for skilled developers to dive deep into blockchain and build out decentralized services for Bitcoin and Crypto cuz the govt is clearly gonna try to stop the established financial sector from being part of the industry.

[blockman]

Even if countless times that news like this will be reported to many publishing companies and made with articles, there will be people that will still trust them and worry not about their money. It's because they've been used to it and there's the thought that they can also recover because of the logical thinking for having this reason of too big to fail. What's with these every cycle, is we're seeing news about banking failures or the feds with new updates about such. And it shouldn't just be us, individuals, who should be wary about what's happening on these financial institutions but also them, the actual companies to learn what's up with them and if they should expand their investments and assets and start adopting bitcoin just as the other institutions have already made.