Are You Ready For A Financial Collapse?

For those preppers who think that some SHTF scenarios will not be total Mad Max / caveman events and that rudimentary barter systems will continue, now is one of the last times to purchase silver. Silver got up to just under $30, but has settled back to $21 / one dollar face-value junk coins.

When the dollar tanks, silver will explode in value. Those holding precious metals will be able to use them to continue on until society really gets crazy -- that's when ammunition and tools will be the order of the day. The wife and I have put back big chunks of wax (chunks of wax weigh around 20+ pounds / 10 kilo) and wicks for candle-making. You can put back lead for your bullet molds; primers and gunpowder are also necessary. If one hasn't bought water filters, now's the time. Upper end water filters have silver-impregnated surfaces to kill bacteria.

Buy real things. The dollar is done. All unbacked currencies are finished. Tick, tick, tick, ...

https://duckduckgo.com/?q=photos+fr...on&atb=v140-1&iar=images&iax=images&ia=images
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"Debt Saturation: Off the Cliff We Go"

-- by Charles Hugh Smith

https://charleshughsmith.blogspot.com/2022/04/debt-saturation-off-cliff-we-go.html

"When the system can't borrow more and distribute the insolvency, it implodes

"I started writing about debt saturation back in 2011. The basic idea is we can continue to borrow and spend as long as one of two conditions hold: 1) real (inflation-adjusted) income is rising, so there's more income to service additional debt, or 2) the cost of borrowing declines so the same income can support more debt.

"After 13 long years of declining interest rates and stagnant incomes for the bottom 90%, we've finally reached debt saturation: after dropping to near-zero, interest rates are now rising, pushing the cost of debt service higher, while wages are losing purchasing power (a.k.a. inflation), so there's less disposable income left to service debt.

"The game plan for the past 13 years was to fund 'growth' today by borrowing vast sums from future incomes: the $1.6 trillion in student loan debt, for example, was supposed to be paid by the soaring wages of all those student-loan-serfs, and all the sovereign debt was supposed to be paid by the soaring tax revenues from rapidly expanding economies.

"These fantasies have now run aground on the unforgiving shoals of reality. There's no way to expand debt if income is losing ground and the cost of borrowing is soaring.

"Saturation is an interesting phenomenon. You keep adding more and more to a system that seems to absorb 'more' with no ill effects, and then suddenly the whole mountainside gives way and rumbles off the cliff.

"There's no tricks left to keep expanding debt: rates are rising, not falling, and wages are losing ground to the soaring costs of rent, adjustable mortgages, healthcare, childcare, food, energy, junk fees, property taxes, etc. As for the phantom wealth of bubbles: as rates rise and the Federal Reserve trims its stimulus, all the bubbles will pop.

"When the system can't borrow more and distribute the insolvency, it implodes. And so off the cliff we go."

 

https://oilprice.com/Latest-Energy-...To-Plunge-British-Pound-To-Historic-Lows.html

"'Huge swathes of the British public aren't going to be able to afford their bills this winter. Average families with two working parents will be in fuel poverty,' Gemma Berwick, Senior Consultant at BFY Group said, as carried by The Telegraph. "

By Charles Kennedy for Oilprice.com

 

Without saying “ I told you so”, what is happening now ,globally and here in the UK,was bound to happen. Too many people,total resources exhaustion,climate change etc etc.

A lot of folks here are going to struggle ,and one of the reasons is that they think living in a hot house,half naked in the middle of Winter is a human right! Now it’s costing .

Years ago we set our former farm cottage up to be as grid independent as possible; the main one being our wood - fired heating. I have to do some real work ( which modern ‘man’ is not used to), but I don’t have to be a Gym Bunny,and my fuel is free! For many years we spent our time and money paying the mortgage off,so whatever happens now will mean we can ride the rough road that is fast approaching.

We have neighbours who are constantly on holidays abroad,changing vehicles and such. They tell my wife that it’s all credit card debt. We have no debt. The whole system is on the verge of collapse .

 

Debt free here also. No debt on home , property , vehicles or credit cards . As things financially fall apart for many , with rising fuel , rent and food prices they are getting into an ever increasing bind . The financial squeeze has just begun . To know why this financial squeeze is here and going to get worse go to my last two posts on the thread " teotwawki " .

 

American socialists panicking:

"The US may now be closer than ever to defaulting on its debts"

https://www.smh.com.au/world/north-...-defaulting-on-its-debts-20230109-p5cb6p.html

"With current federal government debt of just over $US30 trillion and a current ceiling of $US31.4 trillion the Biden administration will hit the ceiling by mid-year, if not before.

"Rising interest rates, the forgiving of student loans, the cost of military assistance to Ukraine and the potential for higher social welfare spending if the economy shifts towards recession could bring that moment forward.

"There has been brinkmanship over the debt ceiling in the past, generally brought on by Republicans who have seen it as leverage to force Democrat administrations into unpopular spending cuts rather than wear the political odium of making the cuts themselves. (The Trump administration increased government debt by far more – about $US7.8 trillion – in one term than the Biden administration’s $US3.5 trillion in its first two years).

"The most recent instance of the debt ceiling being used as leverage for cuts to spending was in 2021, when the Biden administration went within days of running out of funding.

"With the US Treasury already operating under “extraordinary” spending measures – suspending contributions to government pension plans, redeeming investments and deferring obligations – the government was on the brink of a default on its debts. Without a deal, the government would be unable to borrow or fund its agencies, pay its military or meet social welfare payments.

"The more telling precedent, however, was probably a similar stand-off in 2011 when the US got so close to a default that Standard & Poor’s downgraded its credit rating. Barack Obama was forced to agree to $US2.5 trillion of spending cuts over a decade to avert disaster. S&P hasn’t reinstated America’s AAA rating.

"The Democrats’ left wing will never agree to big cuts to social spending, regardless of the consequences.

"With the Biden administration adamant that it will resist what its spokesperson has described as “hostage taking” but McCarthy himself hostage to the minority of dissidents in his party that had blocked his elevation 14 times – he agreed to a provision that a single member of the House can force a vote to oust him, where previously the vote could only have been called by the party’s leadership – the potential for something catastrophic is probably greater than in previous debt ceiling confrontations.

"A failure to lift the ceiling and a default on US government debt would be catastrophic.

"Moody’s Analytics has estimated that a default would cause a 4 per cent cut to US GDP, an unemployment rate of 9 per cent (it’s currently about 3.5 per cent) and a $US15 trillion hit to household wealth.

"Those are the direct domestic impacts. With trillions of dollars of US government debt held by foreigners, mainly by Asian economies with surplus savings – Japan holds more than $US1 trillion and China just under $US1 trillion – a default would have global repercussions."
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Ready as I'll ever be for a financial collapse. Few years ago we set out to live in intentional poverty. Land and home and no debt. We get by quite well on a single small income now, but I've imagined a scenario much like the original post, Venezuelan style. We don't have money stockpiled, instead we have things. Old school tools and useable items. There's wild game, wood, established nut trees and berries. We set up our home to take advantage of passive solar and it's placed to miss a lot of the extreme weather, and an underground shelter for other weather extremes nearby. Will we be able to survive indefinitely this way? Nope. But we'd be facing collapse already living a life not requiring much money.

If the financial collapse comes we're more ready than most everyone I know in real life. If it doesn't come it just gives me time to get a small solar setup and gather more seeds.

 

We have assets and no debt so we’re slightly insulated from it but for others the UK is fast becoming a financial basket case. For so many other people with debt to service life is suddenly getting difficult really quickly. So many people see themselves as entitled to a certain standard of living and we have pandered to them…well newsflash, it’s no longer sustainable.

 

Got a question.

First, some background info on what vehicles we have: We bought a used car a couple of years ago and bought one with only a 2.0 liter engine to get better gas mileage. It is a "sport" model and has 6 forward speeds. The extra gears really allow high gas mileage if one keeps their foot off the firewall (I drive too fast when alone). Because our grandson in another state lives so far away, we wanted both a commuter car and something that one could fill-up and drive 500 miles before refilling which the 4 cylinder provides. The old SUV we have drinks gas, 6 cylinder (with inefficient engineering); but, it never gets driven very far. It's weight and 4x4 ability allows winter driving when Old Man Winter really kicks out the stops -- we drove it during Midwest snowstorms/icing conditions. We also have a 20 year old Mazda that continues to run; even has some zoom-zoom left in it (compression OK; valve oil seals going bad = smokes at startup, but not while driving). This is why we got another Mazda -- they last and are only traded-in by people who lease, not purchase, their cars. Our 4x4 is a Ford. We've gotten hit with some serious repair bills on that Ford, but it is 14 years old and keeps on truckin'. It will outrun the "sports" Mazda on a straight stretch. The Mazda's suspension makes driving a breeze even up on the massively twisty-curvy roads in the mountains. The Ford's suspension sucks.

What vehicles we have is VERY common in America. However, a lot of people commute using SUVs in perfectly fine weather over long distances. That behavior wastes a tremendous amount of gasoline. I see suburbanites buying BIG 4x4 trucks !!!! WTF! FARMERS don't buy trucks like that unless they often tow heavy trailers and horse trailers. When I worked the Forestry Service centuries ago, we only had maybe two or three 4x4.s in a motorpool of well over a dozen trucks. We traveled into the very worst of worse places up in the Cherokee National Forest in plain old two-wheelers. Need a 4x4? -- no, stay with the regular truck and just have some men jump in the back bed to hold down the rear wheels.

Now my question about England:

In the UK, is there a limit on the engine size of a passenger car? Or, are there higher taxes if the engine is large?

Years and years ago, I read something about the engine size being restricted to 1.5 liter or less, yet in photos from England I see cars that come with engines at least 2.0 or larger.

Oh by the way, Americans who've bought the SUVs for commuting cry crocodile tears as the gas prices go up.
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I bought my first car in Spain just before xmas, a Nissan X-Trail hybrid 4x4. Petrol engine up front, electric engine in the rear. Petrol engine charges the battery and when charged shuts off and your running electric mode so no need to plug it into a power socket for hours. Its a comfortable 5 seater and I'm getting around 55-60 mpg so I'm happy with that considering its a 1.5l turbo engine.

The 4x4 is handy because this time of the year up here in the hills we get a lot of rain/sleet/snow and the roads around here are not great at the best of times. I've still got the Iveco van here and the Mitsubishi Delica camper in the UK which I'd love to bring over but getting it registered and modified would cost more than its worth so really its my lads now.

I love this fella, well worth watching

 

"Firefighters Issue Warning: EV Fires Require 10x More Water to Put Out, Up to 10,000 Gallons of Water"

https://www.westernjournal.com/fire...es-require-10x-water-put-10000-gallons-water/

"According to News Nation firemen are warning that electric car fires are far more problematic than fires that engulf gas-powered vehicles.

"Lt. Tanner Morgan with the Grand Prairie Fire Department near Dallas told News Nation that fire departments are not exactly ready to deal with EVs.

“'We’re at that critical point where the consumer-driven world we live in is pushing these vehicles out and the fire department is playing catch up,' he said.

"Lt. Morgan went on to say that a gas-powered car typically takes less than 1,000 gallons of water to douse it when it catches on fire. But EVs are a bigger problem, he said. When an electric vehicle catches on fire, firemen are faced with a 'thermal runaway.'

"Morgan added that the lithium-ion batteries in an EV fuel a fire to a much higher degree than gasoline. And firefighters are having to learn that they need different tactics to fight an EV fire.

"Fremont Fire Department Battalion Chief Gary Ashley said, 'The protocol is to start using copious amounts of water, up to 3,000 gallons, so that’s what we started doing.'

"Unfortunately, 3,000 gallons wasn’t enough for a recent EV fire in Sacramento. News Nation reported that firefighters on that case didn’t start getting the fire under control until 4,500 gallons were sprayed onto the flames. Authorities said that even when firefighters sprayed water directly on the battery compartment, the fire kept reigniting.

"Even Tesla warned about the huge amount of water needed to douse an EV fire.

“'Tesla’s own emergency response guide for the Model S warns that battery fires can require between 3,000 to 8,000 gallons of water to fully extinguish the flames,' News Nations wrote. So, obviously, 10,000 gallons is not out of the question.

"Officials are also warning rural fire departments — in areas where fire hydrants are not available — could face very dangerous conditions with EV fires, especially when many fire trucks cannot hold that much water.

“'In rural areas, especially on interstates where there are no hydrants, this is going to create a logistical issue for emergency response agencies as they’re going to have to shuttle the water up that they need,' the National Volunteer Fire Council’s Tom Miller said."

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Excerpts from an article for firefighters on how to put out electric vehicle fires:

"Electric vehicle response: Fire attack and extrication basics"

https://www.firerescue1.com/electri...tack-and-extrication-basics-PwPBmx8uuMuMOR2G/

Quotations in color yellow-green:

When responding to an EV fire, crews will need to know what exactly is on fire.

If the vehicle is on fire and the high-voltage battery is not involved, it is a standard vehicle fire that should extinguish with a few hundred gallons of water. If the high-voltage battery is on fire, things become much more complicated.

There are many stories about fire departments being on scene for 6 to 8 hours using upwards of 40,000 gallons of water. The issue is that firefighters aren’t really equipped to put out the fire. For example, when an 18650 battery cell (about the size of an AA battery) fails, it releases approximately 6 liters of gas at 1,200 degrees F in tenths of a second. The failure is an exothermic chemical reaction that does not require oxygen from the atmosphere. The energy released from that individual cell is transferred to the neighboring cells, which causes them to fail. This reaction continues until one of two things happen. Either there are no more battery cells, or fire crews can cool the surrounding cells enough that they don’t fail.

So, in order to stop a thermal runaway event, firefighters have the impossible task of trying to cool battery cells inside a watertight, flameproof box. Note: DO NOT pry/cut/remove any part of the battery case to gain access to the fire! Assuming no exposures are present, the best solution is to allow the high-voltage battery to burn itself out. While this strategy is not ideal, it should only take an hour for the battery to burn itself out. The alternative will be to continually dump water on the vehicle for 6 to 8 hours.

EV extrication

Extrication is an area that is overlooked when considering EV response.

Depending on the severity of the crash, EVs can provide unique challenges to firefighters. The vehicle construction and weight distribution could change standard strategies for stabilization. Typically, the outer edges of the battery structure mate to, or are considered the rocker panel. If undamaged, this is typically a safe location for rescue struts or cribbing. Further, when faced with a vehicle on its side, DO NOT use any holes that may have been caused by the crash, or pierce, puncture, create any purchase point in the battery case for rescue struts. This could cause an electrocution and/or fire hazard.

Firefighters should lift an EV at the rocker panel. If the high-voltage battery is intact, an airbag lift could be acceptable on the bottom of the vehicle. Auto manufacturers have specific design criteria for customers that misuse jacks; however, be certain to complete any lifts over a large surface area.

While extricating a patient, it will be extremely important to have a hoseline charged and staffed with a firefighter in full PPE ready to fight fire, as there is a significant risk of a delayed fire.

While firefighters are performing the extrication, everyone involved needs to be aware of the battery. If it’s smoking, popping, sputtering, or if firefighters have eye, nose, throat irritation, there could be harmful/flammable gasses being released. Crews should pull back to don full SCBA.

Crews should also consider the health/safety of the patient(s). Using a vent fan may be appropriate to blow fresh air into the passenger compartment of the vehicle. Also, firefighters should remove trim to verify what they are cutting before the cut is made. DO NOT cut any high-voltage cabling (bright orange). Manufacturers are often routing high voltage cables in the center of the vehicle away from our typical cut points.

Notes for the tow operator

After the incident, notify your tow operator that they will be removing an EV. All hybrid and electric vehicles should be transported on a flatbed. If there’s damage, or suspected damage, there is a risk of a delayed fire. Ask the tow operator to store the vehicle outside at least 50 feet from a structure. Also request the tow operator contact the dealer/manufacturer. They may have different methods of rendering the vehicle safe.
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Firefighters please listen. Wear protection devices when putting-out lithium fires. These give off toxic fumes.

"Difficult to exhale, toxic fumes came out"

https://darik.news/nevada/difficult-to-exhale-toxic-fumes-came-out-2/791319.html

"Lithium ion batteries are made up of many cells, so not only do they burn at very high temperatures, the fire can last for several hours. They also pose other hazards, such as 400-volt electric shock, toxic fumes, and skin and respiratory tract irritation from lithium.

"He said the only way to put out an EV fire right now is to pour water on it continuously, sometimes for hours."
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When we moved here we were running a Toyota D4d pickup with a 3 litre auto. We found we didn’t really need it. We bought a year old Peugeot 308 station wagon and have run that ever since. It is a 1.4 common rail diesel engine with an annual road tax of £30 and really economical fuel/mileage…it’s not much to look at but it’s running fine and does what we want of it. We also run a small van for business.

 

Station wagons are great! They used to be THE vehicle for families. Kids, sports equipment, groceries, ... even lumber when you put the seats down.

I've heard that one of the factors that killed station wagon sales was that "soccer moms" didn't want to drive them because the station wagons made them feel as though people would perceive them as housewives. So, in came the vans and then the monster SUVs. In crashes, vans fold up like aluminum cans. The larger SUVs drink gasoline and these women can't drive them nor park them properly. What a total abomination!

Diesel engines give off soot and that simply precipitates. Due to the much greater compression, fuel is more efficiently burned by the diesel engine. Only the Wankel engine burns gasoline as efficiently as diesels burn kerosene/diesel, but the Wankel still uses a lot of gas. If global warming is happening, then we need to shoot sulfur up there high in the atmosphere to negate the CO2 effect. Currently, we are scrubbing sulfur out of industrial chimneys and refining sulfur out of diesel fuel. Some sulfur must go, else there can be acid rain damage in certain environments.

The only downside of diesel engines is that the glow plugs have to be hot to get the engine to fire-up / start. Some folk used to plug-in their Mercedes Benz cars' diesel engines -- this to heat the glow plugs.

Is the latter still true? Me, I don't know. Does the Peugeot diesel require the heating of the glow plugs before ignition? If so, does it have to be plugged-in to an electrical outlet, or can the car's own lead-acid battery heat the glow plugs? Some diesel ignition systems have a switch tied to the keylock mechanism that heats the glow plugs. Some light comes on when the plugs have heated-up telling the driver it's now ok to start the engine. Does the Peugeot work like that? Does its engine block have to be heated during particularly cold spells?

Diesel is the way to go. I've thought this for decades now. Kerosene is easier to distill and too, one can get diesel fuel from coal much easier. Per given volume, diesel has more energy than gasoline. Diesel engines have fewer parts. Diesel engines last longer. Me, I like the fact that kerosene burns so efficiently. I've been around kerosene since a little kid. My mom's parents had an oil heater for their home -- it was a big old monster sitting in their living room.

Gasoline engines give off lot's of carbon monoxide and a whole bunch of other toxins. Kerosene if spilt can cause a fire. Gasoline can cause an explosion. Gasoline fumes are a nightmare waiting to happen.
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My dad always said never buy a new car, buy one 12-18 months old when any inherent problems would have been sorted out and your saving typically 30+% on the retail price. My Nissan was a few months old and saved me around €7k on the new purchase price.

Always listen to your dad

 

The normal rattle of the diesel engine is primarily due its MUCH higher compression ratio than gasoline engines. That's what my dad told me when I was kid. They don't have spark plugs so as to exactly determine the moment of ignition. They have glow plugs that are there and always hot. I looked online and found the following which is a better explanation than mine:

"Diesels do work on spontaneous combustion. As the piston goes up, fuel is squirted into the combustion chamber. as the piston moves upwards and "squeezes" the fuel/air mixture it ignites. Some of it ignites prematurely as the piston is still on the move upwards, causing that characteristic diesel "clatter" at idle.

"The newer diesels use a high-pressure common-rail system that shoots a small amount of fuel into the chamber as the piston is moving up, shoots the rest in (at very high pressure) when the pistons towards the top of it's "up" cycle, giving a more complete burn and reducing the noise at idle."

Old Gzr: I didn't know about the "common-rail system" -- great idea, that.

The diesel's high compression, like 18:1 is much better than a gas engine at 10:1 (I'd have to go look-up these compression numbers, I don't know the exact numbers). This is the reason for the more complete burning of the diesel fuel. And like I said before, diesel fuel gives more bang for the buck than gasoline, energy-wise.

What I'd take with me in a bug-out situation would require an SUV. In a bug-out I'd load the SUV with guns, ammo (hundreds of rounds), food, camping gear, needed tools, night vision, fire-starters, candles, durable clothes, at least 15 gallon of clean water, wench & axes (chainsaw if room) to clear me a path (should anything get in my way), flares (to light-up an enemy) or to mark my own position when radioing forward to people I know as I got close to my own.

Behind the SUV would be one of our small cars carrying fuel. Once the SUV ran out of fuel. I would fill it up with what was in the small car. The second time the SUV ran out of fuel, I'd fill it a second time with the fuel in the small car and then abandon the small car if unable to fill it again. The small car can carry several 5-gallon gas cans. It is also good to have a second car as a six-o'clock. Someone open fire on one vehicle and that aggressor would catch a mountain of lead from two cars. We'd turn their car into a sieve in a matter of moments.
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Hi old geezer, the Peugeot 308SW is probably a lot smaller than the station wagons that America’s moms used to drive, as far as the glow plugs go there is a seven pin relay under the bonnet that turns the glow plugs on when you turn the ignition on and then turns them off again as soon as the engine turns over. If you turn it to on and wait for the little coil light on the dash to go off the engine fires up instantly first turn of the key whatever the weather. Old diesels had a lot less electrics to go wrong, these days there are all sorts of sensors and NOx re circulation devices (to burn it off, so reducing emissions) that can go wrong…that is before you start on all the plug in diagnostics, ABS, ESP and other gadgets. Lucky for me I’m a decent mechanic.

 

"Silicon Valley Bank is seized by US after historic failure"

https://www.baltimoresun.com/busine...0230310-ojzc2hqyqbcjlip2dnklzigpie-story.html

"NEW YORK — U.S. regulators rushed to seize the assets of Silicon Valley Bank on Friday after a run on the bank, marking the largest failure of a financial institution since Washington Mutual collapsed at the height of the financial crisis more than a decade ago.

"Silicon Valley Bank, the nation’s 16th largest bank failed after its depositors — mostly technology workers and venture capital-backed companies — hurried to withdraw money this week as anxiety over the bank’s health spread. It is the second biggest bank failure in U.S. history.

"The bank had deep ties to Silicon Valley industries and startups. Y Combinator, an incubator startup that has launched companies such as Airbnb, DoorDash and Dropbox, has referred hundreds of entrepreneurs to the bank.

“'This is an extinction-level event for startups,' Y Combinator CEO Garry Tan said. 'I literally have been hearing from hundreds of our founders asking for help on how they can get through this. They are asking, ‘Do I have to furlough my workers?’

"Tan estimated nearly one-third of Y Combinator’s startups won’t be able to make payroll at some point in the next month if they can’t access their money. He said he is asking regulators and lawmakers if the startups can be eligible for financial aid.

"Shortly before noon eastern, the Federal Deposit Insurance Corporation moved to shutter the bank. Notably, the FDIC did not wait until the close of business to seize the bank, as is typical in an orderly wind down of a financial institution. The FDIC could not immediately find a buyer for the bank’s assets, signaling how fast depositors had cashed out.

"Silicon Valley Bank had $209 billion in total assets at the time of failure, the FDIC said. It was unclear how much of its deposits were above the $250,000 insurance limit, but previous regulatory reports showed that much of Silicon Valley Bank’s deposits exceeded that limit. The FDIC that deposits below the $250,000 limit would be available Monday morning.

"The bank still appeared stable this year, but on Thursday it announced plans to raise up to $1.75 billion in order to strengthen its capital position. That sent investors scurrying and shares plunged 60%. They rocketed lower again Friday before the open of the Nasdaq, where it is traded."
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Update on the Silicon Valley Bank collapse --

SVB International Fallout: UK and EU Lenders Lose £30 Billion Overnight as ‘Panic’ Spreads

https://www.breitbart.com/europe/20...s-lose-30-billion-overnight-as-panic-spreads/

"The fallout from the run on the Silicon Valley Bank in California went international overnight, with British and European Union lenders seeing nearly £30 billion wiped off their portfolios and the Bank of England stepping in to take over the insolvency process for the British arm of SVB to protect the deposits of British firms tied to the bank.

"Since Friday, the Stoxx Europe 600 banks index, which also includes leading British lenders, saw a mass sell-off in the wake of the collapse of the Silicon Valley Bank, the largest American bank failure since the 2008 financial crisis. In total, the European-UK banking index saw a one-day decline of 3.8 per cent, with €33.5 billion (£29.6/$35.6 billion) being wiped off their balance sheets.

"Some of the United Kingdom’s largest banks saw their shares fall significantly, with HSBC declining by 4.6 per cent, Lloyds Banking Group falling by 3.3 per cent, and shares in NatWest going down by 2.5 per cent, The Times of London reports.

"The California Department of Financial Protection and Innovation had described SVB as being in 'sound financial condition' before the run on the bank, which saw customers withdraw some $42 billion, resulting in the bank having a negative cash balance of $958 million.

"While the Federal Deposit Insurance Corporation (FDIC) in the United States pledged that all insured deposits in the bank will be honoured, this may not be a huge comfort to many of the bank’s customers, given that reportedly only seven per cent of SVB deposits are insured.

"There has been some pushback, however, against the idea of bailing out the California-based bank, including from Congressman Matt Gaetz, who said: 'If there is an effort to use taxpayer money to bail out Silicon Valley Bank, the American people can count on the fact that I will be there leading the fight against such a bailout,' adding: 'The financial arm of Silicon Valley has just been severed before our very eyes.'

"Republicans pointed to the disastrous economic policies of the Biden administration and the ensuing ‘Bidenflation’ for triggering the bank’s failures, while other conservatives noted that the Silicon Valley Bank likely deployed the use of woke Environmental, Social, and Governance (ESG) scores in its operations, meaning that the bank may have prioritised left-wing causes instead of focusing on financial viability."
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Clowns imagining that they can run the circus:

"Hedge Fund CIO: In Times Like These, Markets Push Prices To The Point Of Maximum Policymaker Pain"

By Eric Peters, CIO of One River Asset Management

https://www.zerohedge.com/markets/h...ets-push-prices-point-maxmum-policymaker-pain

“'I have not considered or discussed anything having to do with blanket insurance or guarantees of all deposits,' answered Janet Yellen, when asked on Wednesday whether Treasury would circumvent Congress to insure all deposits.

"Naturally, this accelerated the bank run, as rational economic actors moved their money.

“'Certainly, we would be prepared to take additional actions if warranted,' said Yellen on Thursday, attempting to reverse Wednesday’s damage.

"And this made it more likely that additional action will become warranted. Because in times like these, markets sniff out weakness, and push prices to the point of maximum pain. Policymaker panic.

“'In such an environment, our ultimate goal is clear: we must – and we will – bring down inflation to our medium-term target in a timely manner,' declared Christine Lagarde, determined, schooled in the importance of conveying confidence during times of crisis.

“'In current conditions, a robust strategy calls for a data-dependent approach to making policy and a clear reaction function so that the public understands the sources of information that will be important to us,' continued the ECB President.

“'To that end, our future policy path will be determined by three factors; (1) our assessment of the inflation outlook in light of the incoming economic and financial data, (2) the dynamics of underlying inflation, and (3) the strength of monetary policy transmission,' explained Lagarde.

"It all sounded great to just about everyone, except investors, and especially traders.

"Because (1) a central bank’s inflation outlook in times of great economic uncertainty is profoundly unreliable, (2) the dynamics of underlying inflation are wildly unstable when inflation is this high, and (3) monetary policy transmission in a highly indebted hyper-financialized global economy can appear too weak one day and precipitate a bank run the next.

“'At the same time, I have made clear that there is no trade-off between price stability and financial stability. We have plenty of tools to provide liquidity support to the financial system if needed and to preserve the smooth transmission of monetary policy,' said Lagarde, presumably hoping that if she said it with great certainty, we would all forget the lessons of decades of trading and a century of financial history.

"You see, central banks do not have the power to determine how monetary policy is transmitted. Markets decide. And there is always a trade-off that central banks must make between price stability and financial stability. To deny this is to invite markets to press our policy makers to the point where they must choose one or the other."