Internal or external auditors occasionally comb through individual loans in a bank’s portfolio and make judgments as to whether those loans are worth what the bank says they are worth due to lower appraised values and other issues either particular to an individual property or the market as a whole. Bankers then, begrudgingly, set aside earnings for potential loan losses.

In the case of the real estate loans at New York Community Bank, loan examiners must have told senior management to increase the bank’s loan loss provision by 790 percent to $552 million. This balance sheet expense drove the fourth-quarter loss and caused the bank to cut its dividend.

“The bank reported a near $2 billion increase in criticized multifamily loans—debt with a probability of default,” wrote Suzannah Cavanagh for the Real Deal. “Of its $37 billion multifamily loan book, which comprises 44 percent of its total portfolio, 8 percent was marked criticized in the quarter.” The bank also reported a $42 million net charge-off—debt unlikely to be paid back—for an office loan on which the borrower stopped paying interest.

The bank’s chief financial officer John Pinto pooh-poohed the loan carnage, saying, “We had higher levels of substandard [loans] throughout the Financial Crisis, throughout the pandemic. The rise in substandard loans does not lead directly to specific losses.”

Hope Springs Eternal

Like the 2008 financial crisis, what happens in the US isn’t staying in the US. Tokyo-based Aozora Bank said losses in its US office’s loan portfolio will likely lead to a net loss for the year ending in March, the Wall Street Journal reports. Also, the private Swiss bank Julius Baer took a roughly $700 million provision on loans made to Austrian property landlord Signa Group. The bank said shutting down the unit was what made the loans, and the chief executive has resigned.

Jay Powell made no mention of the New York Community Bank’s news in his prepared remarks, and reporters didn’t ask him about the bank’s troubles during the Q and A. There were no questions concerning the Bank Term Funding Program that will be sunsetted March 11 despite having risen to record highs. According to the Wall Street Journal’s Andrew Ackerman, the popularity of the program was not because of new stresses on banks. But reportedly, “some banks had recently figured out a way to game the program by pocketing the difference between what they pay to borrow the funds and what they can earn from parking the funds at the central bank as overnight deposits.” On January 31, banks had borrowed more than $165 billion from the facility.

It’s doubtful there are no new stresses on banks. New York Community Bank is not an anomaly.

To that point, real estate investor Barry Sternlicht told a conference crowd…

We have a problem in real estate. In every sector of real estate, not just office, because of the 500 basis point increase in rates that was vertical. The office market has an existential crisis right now . . . it’s a $3 trillion dollar asset class that’s probably worth $1.8 trillion [now]. There’s $1.2 trillion of losses spread somewhere, and nobody knows exactly where it all is.

Sternlicht mentioned a project in New York that was purchased for $200 million that he thought was now worth just $30 million, encumbered by a $100 million loan.

Harold Bordwin, a principal at Keen-Summit Capital Partners LLC in New York, which specializes in renegotiating distressed properties, told Bloomberg, “Banks’ balance sheets aren’t accounting for the fact that there’s lots of real estate on there that’s not going to pay off at maturity.”

Bordwin went on to say, “Banks—community banks, regional banks—have been really slow to mark things to market because they didn’t have to, they were holding them to maturity. They are playing games with what is the real value of these assets” (emphasis added).

The plan for the Bank Term Funding Program was hatched in haste over a weekend in March of last year in the wake of the Silicon Valley Bank and Signature Bank failures (Signature’s assets were purchased by New York Community Bank). To hide their embarrassment over banks using the facility for risk-free interest rate arbitrage, they say they are shutting the program down because there is no stress in the banking system.

There is stress aplenty in the banking world. As Murray Rothbard wrote in The Mystery of Banking, “Fractional reserve bank credit expansion is always shaky, for the more extensive its inflationary creation of new money, the more likely it will be to suffer contraction and subsequent deflation.”

While bankers and regulators have their heads in the sand, the contraction has already begun.

About the Author

Douglas French is President Emeritus of the Mises Institute, author of Early Speculative Bubbles & Increases in the Money Supply, and author of Walk Away: The Rise and Fall of the Home-Ownership Myth. He received his master’s degree in economics from UNLV, studying under both Professor Murray Rothbard and Professor Hans-Hermann Hoppe. His website is DouglasInVegas.com.

In The Last American Vagabond video above, you can watch Agustín Carstens, general manager for the Bank of International Settlements (BIS), spell out exactly why globalists are promoting central bank digital currencies, or CBDCs, so heavily.

“[With] cash we don’t know, for example, who’s using a $100 bill today,” he says. “We don’t know who is using a 1,000-peso bill today. A key difference with the CBDC is that Central Bank will have absolute control on the rules and regulations that will determine the use of that expression of Central Bank liability and also we will have the technology to enforce that.”¹

The video features an interview with finance guru Catherine Austin Fitts — publisher of The Solari Report² — who has warned that CBDCs are part of a plan to end all currencies. If that happens, a slavery system, steeped in the ideologies of transhumanism and technocracy, will be ushered in.

“We’re watching events that are within a framework, which is very engineered and planned,” Fitts says. “At the root of what’s going on today is there is a group of people who are trying to totally centralize control of all financial transactions on the planet — 100% — using digital technology.”³

Taxation Without Representation

“It’s a very rare moment when a central bank is telling you the truth,” Fitts notes, but Carstens’ statements did just that, detailing how central banks can enforce rules centrally “because it’s no longer your money, it’s our money — and we can set the rules on how you can use ‘our’ money,” she says.⁴

CBDCs will rapidly usher in an era of taxation without representation, leading to the end of liberty. By granting complete control of individuals’ financial transactions to central bankers, CBDCs allow the government to maintain complete control.

Without financial transaction freedom — the ability to transact with whoever you want, for any purpose — there will be no freedom, Fitts says. This is a key reason why we need to preserve cash. Right now, there’s a war going on between decentralizers, who are trying to preserve financial transaction freedom, and centralizers, who are fighting among themselves over who will be in control of the system.

“And, of course, every effort is being made by the corporate media to turn the rest of us who are trying to fight for transaction freedom to divide and conquer. And so it can be very confusing to watch this if you don’t see the gist of the main game,” Fitts explains.⁵

Central Bankers Hiding Behind Health Infrastructure

Part of what’s going on behind the scenes is what Fitts refers to as the Going Direct Reset — the “wholesale plan”⁶ of The Great Reset, which has been packaged for “retail” sale to the masses. The Going Direct Reset is detailed by John Titus on the Solari Report,⁷ but it involves the massive amounts of money — $3.5 trillion over a few weeks — injected into the economy in 2020.

That money was largely used in a way to build out only certain sectors — like space, the smart grid and health infrastructure — while starving others. This is another facet of gaining control and also involves the rollout of digital passports under the guide of keeping the population healthy and safe. Fitts explains:⁸

“Essentially, build out the infrastructure of control. Get everybody on an electrical grid … and we see this dance between finance and health care. If the central bankers had to do all the centralizing control with money they would end up with everybody coming at them with pitchforks, and so they hide behind health.

We see this use of the health infrastructure basically to build the train tracks of control. So, for the central banks, for example, to do CBDC they need a digital ID. Well, you get that because you’re trying to make everybody safe, right? … So we’ve had this dance during the Going Direct Reset of using health to justify more central control.”

Was the SVB Banking Collapse Deliberate?

During the pandemic, you had the Fed pumping a massive amount of money into the economy, while one-third to half of U.S. small businesses were shut down in the name of public health.⁹ This wreaked havoc with people’s loan portfolios, but what caused Silicon Valley Bank (SVB), the 16th largest in the U.S.,¹⁰ to collapse?

“At Silicon Valley Bank (SVB),” Fitts says, “you have the biotech and life sciences and the tech IPO pipeline that literally sort of explodes in the bubble, and then when the bubble’s over it kind of shuts down.”

That was one aspect. Meanwhile, Fitts says, 49% of the small businesses in San Francisco shut down, “so if you’re SVB loaning to just small businesses in the Silicon Valley area … that could be as much as half your loan portfolio.”¹¹ However, ultimately Fitts believes the collapse was a deliberate takedown — not the result of a traditional bank run:¹²

“We had a takedown at SVB. There’s a game going on and … what it turned into was an effort by a variety of players to panic everyone into believing … that this was going to turn into a wider contagion run.

Now if you do look at the numbers on the banking system, if interest rates continue to stay high for a long period of time and a lot of banks have to run a negative arbitrage, that’s a problem … so you’re going to have banks that get into trouble and end up going out of business in that situation … but it’s not necessarily true that interest rates are going to stay up … we don’t know.”

Creating Financial Panic Drives Business to the Criminals

The panic created over instability in the banking system may also be part of the plan. By creating a banking run, many will take their money out of small banks and put it with the central banks that are at the root of the problem:¹³

“To get complete control, you’ve got to kill the small guys. You’ve got to kill the small farms. You’ve got to kill the small businesses and you’ve got to kill the small banks.

So, we use the health care game to shut down the small businesses and the farms — not because they’re less productive but because the guys running the game could pick up huge market share and make a fortune stealing their businesses and picking up their asses cheap …

You pump money into your pals and then you shut down your enemies, and then your pals can go pick your enemies up for cheap … so we shut down the small farms and small business … and now we’re ready to shut down the small banks.

Now, if you’re the top guys and you want to play this game, who better to shut down the small banks than panic on all the small bank depositors and scaring them and getting them to walk their deposits across the street to the criminals? … What they’re trying to do is get all their neighbors’ cattle to stampede into their corral.”

If the globalists take over, which is all but guaranteed if they control the financial system with CBDCs, they can institute worldwide slavery. But unlike in the past, technology now exists to keep track of people’s every move and control their ability to live in the modern world if they don’t obey. Fitts says:¹⁴

“The greatest most profitable business in the history of the world is slavery, more than mining, more than anything else. Slavery. That’s what this is about. Digital technology solves all the bad problems they had with slavery the last time. All those problems you can now solve with digital technology.

You can perfect your collateral — if I can implant a chip in you … then I can collateralize you. I can perfect my collateral as a banker and now we’re off to the races. I can build a slavery system and with robotics, AI and automation, I can manage it.”

How to Find a Good Local Bank

Fitts stresses that leaving the banking system isn’t the answer — finding a good local bank, and stashing your cash in a variety of places, is. While you’re there, let bankers know about the dangers of CBDCs. The Solari Report even has a template letter¹⁵ you can use to inform your bankers about the downsides of CBDCs. It reads, in part:

“It strikes me that creating a different, yet centrally controlled fiat currency that can be created from thin air and manipulated by unelected central bankers does not promote U.S. financial stability or provide citizens with consumer and investor protections — except in the sense that totalitarian governments can be financially stable through the power of taxation without representation and the ability to micromanage and regulate the spending of families and small enterprise.”

The bank or credit union you choose should not have a record of criminal behavior. Next, just as it’s a good idea to get to know the small farmers growing your food, it’s a good idea to get to know the people running your local bank.

The “No. 1 criteria is are they well managed? Are they well governed? Who owns, who manages, who’s on the board?” Fitts says. “What is the quality of the people and their experience and expertise?”¹⁶ The second criteria to look for is a steady deposit base.

“You want to look at the deposit base, you want to look at the loan base, you want to look at the investment portfolio,” according to Fitts. “And then you want to make sure that in the investment portfolio, or in their accounts, they have enough short-term investments and cash … it’s like a train. People get on and off, and you want them to have enough liquidity so they can handle the ups and downs.”

Fitts encourages everyone to get to know their community bankers and credit union executives. “If you’re concerned about your bank, go talk to your bank. If they’re doing a good job, they will answer your questions with confidence.”

How to Stop CBDCs

One of the top ways to stop CBDCs, in addition to ditching large, multinational banks in favor of trustworthy local banks or credit unions, is to use cash as much as possible, and not frequent shops that don’t accept it.¹⁷

You want to have your cash spread out, starting with keeping cash on hand in your home, ideally in a fireproof safe. Then you can expand to a safe deposit box at a bank, a small, local bank or investing in silver and gold coins. Meanwhile, talk to the people in your local community about why you’re using cash.

“Start using cash, and as you use cash talk to the small businesses that you frequent — small restaurants, small farms — and talk to them about how we can work together as customer and business to improve our endurance and resiliency and well-being,” Fitts says.¹⁸

Helping to build out your local food sources is also part of the solution, since having access to healthy food is critical to maintaining health and autonomy. “Anything you can do to build out the local food markets so that we can’t get cornered and be dependent on our enemy for food, it’s going to make a big difference to freedom,” she explains.¹⁹

There’s still time to defeat the globalists and maintain life as we know it. So, rather than feeling defeated, recognize that the opportunity exists to win this battle, one action and one individual at a time:²⁰

“Understanding this can be completely overwhelming and depressing, but the thing I want to encourage everybody to understand is facing it … is the doorway that you walk through. And the grief you experience to get to the other side and realize there are real solutions. Because in the official narrative there are no real solutions, but if you face reality, there are real solutions.”

• ¹ Odysee, Catherine Austin Fitts Interview March 31, 2023, 0:53
• ² The Solari Report
• ³ Odysee, Catherine Austin Fitts Interview March 31, 2023, 3:46
• ⁴ Odysee, Catherine Austin Fitts Interview March 31, 2023, 4:24
• ⁵ Odysee, Catherine Austin Fitts Interview March 31, 2023, 6:06
• ⁶ Odysee, Catherine Austin Fitts Interview March 31, 2023, 9:42
• ⁷ Solari Report, Summary — Going Direct Reset
• ⁸ Odysee, Catherine Austin Fitts Interview March 31, 2023, 7:50
• ⁹ Odysee, Catherine Austin Fitts Interview March 31, 2023, 11:59
• ¹⁰ Yahoo Finance March 10, 2023
• ¹¹ Odysee, Catherine Austin Fitts Interview March 31, 2023, 12:18
• ¹² Odysee, Catherine Austin Fitts Interview March 31, 2023, 43:22
• ¹³ Odysee, Catherine Austin Fitts Interview March 31, 2023, 45:08
• ¹⁴ Odysee, Catherine Austin Fitts Interview March 31, 2023, 32:10
• ¹⁵ The Solari Report, Template Letter to Bank December 14, 2022
• ¹⁶ Odysee, Catherine Austin Fitts Interview March 31, 2023, 35:34
• ¹⁷ The Solari Report Jauary 15, 2023
• ¹⁸ Odysee, Catherine Austin Fitts Interview March 31, 2023, 1:01
• ¹⁹ Odysee, Catherine Austin Fitts Interview March 31, 2023, 1:02
• ²⁰ Odysee, Catherine Austin Fitts Interview March 31, 2023, 55:59

Things have obviously changed since the cataclysmic stolen 2020 election. I quickly took on one, then two, then three precious metals sponsors out of nearly 30 that I had vetted because they were the only three that were demonstrably “America First,” not working with the CCP and not donating to Democrats..

The reason that I preface the article below from International Man is because I want readers to know that I do not share these articles for the sake of fearmongering. There are massive and completely legitimate concerns about our financial future as a nation. I was not a “Chicken Little” telling people to get out of the stock market and into physical precious metals until recently. Now, I’m a full-blown believer in “smart money,” and while I’m not a financial advisor, as a journalist I can appreciate the need for Americans to move their retirement accounts to self-directed IRAs backed by physical precious metals.

We are in for a very bumpy ride. Buckle up. Here’s International Man and Doug Casey explaining what to expect…

From Goldsmiths to Central Banks: Doug Casey on the Degradation of the Banking System

International Man: Historically, classical banking functioned as a way to safeguard people’s money—banks charged a fee to depositors for holding money and administering transfers.

Today, banks generate enormous profits from making loans to borrowers—by lending out far more than they hold on reserve. How has the relationship between the depositor and the bank changed over time?

Doug Casey: The banking industry has become totally fraudulent. It has totally left its roots. As I explained a couple of weeks ago, the banking business is really two separate and unrelated businesses.

One is savings accounts (a.k.a. time deposits), where you deposit your money, gold, with the bank for a fixed period of time. You’re paid a fixed amount of interest. The bank lends it out for the same amount of time for a higher rate of interest. Historically, sound bankers only made short-term, self-liquidating loans backed by assets exceeding the amount of the loan—but there’s still a degree of risk.

The other function of the bank is to store your capital securely. For that, you use a checking account (a.k.a. a demand deposit). The bank doesn’t pay you but charges you a fee for keeping your money safe in a guarded and insured vault and giving you the right to transfer or withdraw it instantly.

These are actually two completely different businesses. But today, accounts of all types have been completely merged. The public—and almost all bankers—don’t know and really don’t care about any of this.

Banking has totally transformed—in 1913 with the founding of the Federal Reserve, then in the 30’s with the devaluation of the dollar and a slew of new regulations, then in 1971 when the dollar was turned into a complete fiat currency—from a relatively small business, where in effect a merchant was providing a service to safeguard and deploy money, to a dominant institution that controls the economy. It’s part of the financialization of everything. The Federal Reserve is now essential to financing government deficits today, much more than taxes or the borrowing of savings.

The Federal Reserve buys government debt with dollars it creates and deposits them in government accounts at commercial banks. The commercial banks then lend the new dollars out many times over through the fractional reserve system. It seems to work until too many borrowers become too indebted. Or too many depositors lose confidence in the system as they did recently with Silicon Valley Bank.

Unfortunately, most people don’t have a clue how this works or what the mechanics of it are, but it’s the main reason why we live in a world which is head over heels in debt.

“Saving” means producing more than you consume and setting aside the difference. It allows a higher standard of living in the future.

“Debt” facilitates an artificially high standard of living now and a lower standard of living in the future. That’s because you’re either consuming capital that others have saved or you’re mortgaging your future.

The bottom line is that the whole financial system—based upon the way currency is created today by the government and the way the banks work, is totally and irredeemably corrupt. I don’t believe it can be reformed. It’s inevitably going to collapse in some way.

International Man: A fractional reserve banking system could only work if there is a so-called “lender of last resort” to create new currency units out of thin air to bail everyone out when things go south.

This is what the Federal Reserve and other central banks do. It resembles a Ponzi Scheme backstopped by a massive counterfeiting operation. What’s your take?

Doug Casey: The Fed has become part of the cosmic financial firmament. People react to any who question its legitimacy as they might to a Flat Earther. Regardless of that, I think it’s important to say that fractional reserve banking is a fraud. It’s a criminal activity.

The solution is not to have a lender of last resort to hold everything together, hoping to keep the system intact. The solution is to recognize that anything short of a 100% reserve banking system is a fraud and should be treated accordingly. When a banker mixes savings accounts and checking accounts or creates loans without corresponding deposits, he should be prosecuted as a common law fraudster. But now, these things are integral parts of the financial system. It’s going to be very, very hard to unwind.

Of course, the Federal Reserve itself should be abolished because it’s the actual engine of inflation, but that’s not going to happen either because the government relies upon the Federal Reserve to finance most of its spending today.

With the world as deeply indebted as it is today, pulling the plug would cause widespread bankruptcies and unemployment as embedded distortions in the system are liquidated. But the plug should be pulled because it’s important that the world returns to a sound basis, which is about producing real goods and services as opposed to shuffling money around to the benefit of the paper economy.

Put it this way: If a 100-story skyscraper is poorly built and resting on quicksand, it’s better to have a controlled demolition than wait for it to fall unexpectedly at a random time. This is going to end extremely badly, likely during the current financial crisis.

International Man: The recent collapse of Silicon Valley Bank was the 2nd largest bank failure in US history.

The US government and media bent over backward to try to convince the public there wasn’t a bailout—but there was. All depositors are supposed to be made whole—despite most being above the FDIC’s $250,000 limit. What kind of precedent does this set, and what are the implications?

Doug Casey: Banks have become creatures of the State. They’re no longer businesses, among many others, that just facilitate commerce.

The only way to solve this problem is to get the government out of the money system, which is something most people can’t comprehend—and go back to actual specie money, which is to say gold.

The whole system has to be revamped and refurbished. This is going to wind up with either a deflationary collapse or a runaway inflation of the currency if the government creates more dollars in order to keep the Ponzi scheme going.

The SVB bailout was particularly shameful because it was about protecting the ultrarich around the tech industry—over 90% of SVB’s deposits were over the $250,000 limit. Of course, if the Fed hadn’t bailed out SVB, it would have caused a deflationary collapse. But that would be better than what’s likely coming…

We’ve been on the razor’s edge of a disaster for many years. The massive creation of currency to paper over problems has created bubbles everywhere. In 2000 with stocks; in 2008, with real estate, and a hyperbubble in the bond market. Now the crisis is in the banking system itself. There’s actually no easy way out of this. There’s no soft landing.

What we’re looking at is a gigantic depression, defined as a significant drop in most people’s standard of living. That’s the way it’s going to end, and it’s likely to end soon.

Of course, the government’s going to try to do to paper this over—they’ve tried “quantitative easing,” which they continue by creating huge amounts of digital currency. They’ve tried reducing interest rates to keep things going, which made things much, much worse. Now they’re going to try Central Bank Digital Currencies, which will be the ultimate disaster. My suggestion is to prepare for a class 5 hurricane in the financial markets, not just this year but over the rest of this decade.

International Man: Are there any practical alternatives to the unstable banking system today?

Doug Casey: I urge people to buy lots of gold and silver, especially in smaller coins. If possible, keep a fair portion of it outside of your native country because your main risks today—as serious as the financial and economic risks are— are political.

You have to insulate yourself politically. Diversify not just into gold and silver but into foreign jurisdictions— where the local government doesn’t see you as its personal possession but rather the possession of some other government.

International Man: The banking system is one giant government-caused distortion in the market. Do you see any smart speculations as these distortions inevitably unwind?

Doug Casey: It’s regrettable that, as the government passes more laws and regulations, creates more currency, and juggles interest rates, the markets will become more chaotic.

People will be forced to second guess the markets just to keep what they have. Most people won’t succeed at this. So it’s important that, even at this late date, you improve your understanding of economics and intelligent speculation, to insulate yourself from these things to some degree.

Most of the real wealth in the world is still going to be here after the current financial system collapses. It’s just going to change ownership. You’re more likely to survive and to prosper by gaining as much knowledge as you can and building as much real capital as you can.

Editor’s Note: Most people have no idea what really happens when the banking system collapses, let alone how to prepare…

As we get closer to a widespread banking collapse, choosing where to put your money is crucial to ensuring it doesn’t get caught in the crosshairs.

Owning gold is essential. Gold has held its value for thousands of years. It has preserved wealth through every kind of crisis imaginable. Gold will preserve wealth during the next crisis, too.

That’s precisely why legendary speculator Doug Casey and his team just released a new video on this topic, including what the mainstream media won’t tell you about gold. Click here to watch it now.