Silicon Valley Bank (SVB) has been in the spotlight since its failure led the U.S. Federal Deposit Insurance Corporation (FDIC) to close the bank on Friday. the largest bank failure in the United States since 2008 and and various alleged catalysts have been pointed to. Some say venture capitalists caused the bank run, while others blame the Federal Reserve for raising interest rates. Economist and gold bug Peter Schiff said Friday that the U.S. banking system will be in more trouble in the future. He and several speculators believe that these institutions are holding mountains of long-term government bonds.
Market observers who predict a larger financial collapse in the U.S. are calling for SVB intervention
In the past week, two U.S. banks, Silvergate Bank and Silicon Valley Bank (SVB), have failed; SVB’s failure is the largest bank failure since Washington Mutual (Wamu) in 2008, which expanded its branches too quickly and lent to so-called unqualified buyers The bank’s large holdings of subprime mortgages were blamed for the failure.
Prior to the bankruptcy, Wamu held $188.3 billion in deposits, while SVB is estimated to have lost about $175.4 billion. However, at the end of December 2022, SVB had $175.4 billion in deposits, but customers tried to take out $42 billionon Thursday alone; it is safe to say that SVB’s demise was much faster than Wamu’s collapse at the end of 2008.
Days before the bankruptcy, SVBannounced a need to raise $2.25 billion to try to strengthen its balance sheet. It also sold its available-for-sale bond portfolio for $21 billion and took a $1.8 billion loss on the sale; SVB is well known for banking the money of high-tech startups and venture capitalists (VCs), and some market participants believe these clients caused the bank deal.
“This is a bank run caused by VC-induced hysteria,”saysRyan Falvey, a fintech investor at Restive Ventures, said in an interview with CNBC on Friday.” This will be remembered as one of the ultimate cases of the industry cutting off its nose to spite its face,” he added.
Other analysts and market participants have blamed the illogicalinverse yield curvethat long- and short-term Treasuries arefacing today. as well as the U.S. Federal Reserveraising interest rates. Suna Amhaz, founder and managing partner of Bolt Capital, said.
economist and gold bug Peter Schiff shares Amhaz’s view and expects a much larger financial collapse in the US. He writes: “The U.S. banking system is on the verge of a massive collapse of
