Comments by Brian Shilhavy
Editor, Health Impact News
The Wall Street Journal sent shockwaves through the financial world Saturday night when it reported that the FDIC seized nearly $14 billion in foreign deposits at Silicon Valley Bank in the Cayman Islands last March, mostly from companies in ‘Chinese investment, which had been waiting to access it. to their bottoms.
It’s not happening.
Two months after the bankruptcy of Silicon Valley Bank, the lender’s depositors in the Cayman Islands have been left out.
American depositors at the California-based bank were protected when the Federal Deposit Insurance Corp. took control of SVB on March 10 and secured all its funds. SVB’s U.S. branches, as well as its loans and deposits, were acquired by First Citizens Bancshares in late March.
It’s been a very different story for customers at SVB’s Cayman Islands branch, which was left out of the First Citizens deal and placed under FDIC oversight. The offshore tax haven branch was created to primarily support the bank’s activities in Asia, according to SVB. Its depositors, which include several Chinese investment firms, have been unable to access their funds and have been in limbo since SVB’s collapse.
The FDIC’s notice surprised customers who had thought an earlier statement by US regulators that all SVB depositors would be made whole also applied to them. (Source.)
As Pam Martens reported this morning, this will certainly lead to a bank run on all foreign unsecured deposits, which are more than a trillion dollars in just two banks: JPMorgan Chase and Citigroup’s Citibank.
[T]there were outbursts of commotion on Saturday evening around 5:30pm when the Wall Street Journal broke the shocking news that depositors at the Silicon Valley branch in the Cayman Islands had their deposits seized by the Federal Deposit Insurance Corporation (FDIC), which they are unlikely to ever see again.
As Wall Street On Parade has previously reported, by statute, the FDIC cannot insure the deposits of US banks on foreign soil.
In addition to what are sure to be political fallout, depositors left out of the Cayman Islands branch included “investment companies in China and other parts of Asia.” These depositors can’t be too happy to see their deposits confiscated while everyone else is protected, whether they had deposit insurance or not.
What the Wall Street Journal has done with this report is open a Pandora’s box about the large sums of foreign deposits held in the foreign branches of JPMorgan Chase and Citigroup’s Citibank, neither of which are covered by the insurance of the FDIC. It also raises the question of why the banking regulators of these two Wall Street megabanks have allowed this dangerous situation to occur.
According to the year-end call report filed by Citibank, it had an impressive $622.6 billion in foreign branch deposits. (See page 34 of the call report.) According to the year-end call report filed by JPMorgan Chase Bank NA, it had $426 billion in deposits at foreign offices. (See page 34 of the linked report.) Together, these two banks held just over $1 trillion in deposits on foreign soil, which were not backed by any US deposit insurance. (Source.)
As MishTalk.com’s Mike Shedlock reported, the FDIC has now sent a clear message to foreign depositors: You can’t trust US banks.
The clear message from the FDIC is don’t bank in the US. If you do, you better be in one of the too-big-to-fail giants.
If you’re a foreign depositor at any small or medium-sized bank, the FDIC says you better get your money out now.
Let the foreign deposit begin. (Source.)
If that news wasn’t bad enough, we also have the alleged political posturing going on right now over whether or not Congress will raise the US debt limit, or default on some government obligations, such as the Treasury of the USA.
Asia (Japan and China) has a large majority of foreign-held US Treasuries ( source ), and probably many of the same investment firms that just lost all their deposits at Silicon Valley Bank.
Last Friday, US Treasury Secretary Janet Yellen declared that the US must “default on something” if Congress fails to reach a new debt ceiling, and that includes US Treasuries.
“If Congress doesn’t do it, it’s really going to affect our credit rating. We have to default on some obligation, whether it’s Treasuries or payments to Social Security beneficiaries,” Yellen said Friday in an interview with Bloomberg Television. “This is something America hasn’t done since 1789. And we shouldn’t start now. So we haven’t discussed what to do.” (Source.)
Economists are almost unanimously saying that the showdown in Congress is obvious and that there is no possible way the US government will allow a default on its debt.
Orman believes the consequences are too severe for US congressmen to follow through on threats to let the US default on its debt. Everyone from foreign governments (who hold trillions in US Treasuries) to insurers would be affected.
Suze Orman spoke with Sheila Blair, former chairman of the Federal Deposit Insurance Corporation (FDIC), who shares Orman’s view. They believe that despite the drama in Congress right now, the chance of the US government defaulting on its debt is slim to none. (Source.)
But should we trust the corporate media? You know, the same ones who said our government wouldn’t intentionally lock everyone down during COVID-19 if the threat wasn’t real and the experimental COVID shots were totally safe and effective?
The fact is, American politicians do not run America. Billionaires and corporate bankers do, and they have systematically worked against the people by enriching their accounts with trillions of dollars that Donald Trump gave them for COVID in 2020 while driving millions of small businesses into bankruptcy, while killing and maiming millions of people Americans with Trump’s clot.
And here in 2023, Biden’s FDIC just wiped out $14 billion in foreign deposits at Silicon Valley Bank.
So why wouldn’t these same people who control Wall Street and America’s banking system collapse the economy by defaulting on their debt, and then let Republican and Democrat lawmakers in DC take the blame?
Isn’t that what the Great Reset of the Davos crowd is all about?
In fact, some politicians may have already gotten the memo, as some of them have already stated that it will take a “stock market collapse” to break the current impasse in Congress on raising the debt ceiling, perhaps preparing the public for just such an event.
A key Democrat is warning this week that only a stock market collapse will break the partisan deadlock over raising the debt ceiling and preventing a government default this summer.
Rep. Jim Himes (D-Conn.), a former Goldman Sachs executive and senior member of the Financial Services Committee, said Republicans’ opposition to raising the debt limit without steep spending cuts is so entrenched than just a market crash that shakes the economy. — like the crash that accompanied the 2008 financial crisis — will jolt Republican leaders into accepting a bipartisan compromise. (Source.)
The U.S. bond market is the bedrock of the global financial system, with the dollar as the reserve currency and Treasury debt long considered the world’s safest and most liquid financial asset, a status that Yellen say it would be eroded in the event of default.
Yellen delayed her trip to Japan to personally call U.S. business executives and appear on several major television shows to warn U.S. lawmakers that not raising the $31.4 trillion borrowing limit would be a “catastrophe ” for global financial markets and the economy. (Source.)
Even if this is all just posturing and the debt ceiling is removed or extended, this weekend’s Wall Street Journal article will almost certainly increase the outflow of foreign funds on deposit in northern banks – Americans, now that they have found out that everything they had on deposit at Silicon Valley Bank is gone.
See also:
Understand the times we are currently living in
The God of All Comfort
Who are the children of Abraham?
God will not be fooled: a person reaps what he sows
An invitation to technologists to join the winning side
Synagogue of Satan: Why It’s Time to Leave the Corporate Christian Church
How to determine if you are a disciple of Jesus Christ or not
Epigenetics exposes Darwinian biology as religion: Your DNA does NOT determine your health!
What happens when a holy and just God gets angry? Lessons from history and the prophet Jeremiah
Insider exposes Freemasonry as the world’s oldest secret religion and Luciferian plans for the new world order
Posted on May 15, 2023
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