John Titus: Lawlessness and the Real Causes of the Banking Crisis

Tom welcomes an interesting guest who dives deeply into various financial topics; John Titus. He discusses noticing the liquidity issues in the banking system and three weeks later Silicon Valley Bank failed. The Fed's balance sheet until 2008 was less than a trillion dollars, which was largely for settling transactions. However, in 2008, the balance sheet exploded. In 2020, the Fed created reserves far larger in scale and they started buying assets from non-banks. Starting March of 2020, the Fed balance sheet ballooned from 13.5 trillion to 18 trillion, which was the cause of the inflation. They increased the money supply for households and ordinary businesses, and this wasn't just reserve balances on account at the Fed. Silicon Valley Bank had 13 billion dollars on account spread over ten accounts. When the Fed bought 4.5 trillion from non-banks, it bought them through firms like Blackrock. Senate testimony showed that much of this money was in retail bank accounts. Money started out in business accounts but ended up in households. John doesn't believe that apps were behind the flows out of SVB; this seems like a cover story to him. This isn't just a regional banking crisis; these were large banks in the top hundred. These were rich people banks that were failing, so the Fed had to intervene. People aren't talking about the whales in the pond; this is part of the game of favoritism. He says, "The Fed is picking the winners and losers, with opaque policy decisions and no record keeping. They get whatever result they want; we live in a lawless nation run by criminals." John discusses some metrics that can help you determine if your bank could fail. It is considered wise today to have some exposure to physical precious metals. Banks are being consolidated into a much tighter group, where the JP Morgans of the world acquire smaller banks. Canada has changed the rules around mortgages, allowing huge extensions. Debt is someone else's asset and someone is going to be burnt. These types of policies are leading to a loss of overall confidence in the system. John believes we're going to see more bank failures and inevitably lower rates. The Fed is all about managing perception to the benefit its private owners. Gold brings options to other countries if they want to move away from the dollar. Everyone today needs resources and Eastern nations are looking to consolidate their own resource supplies. They are sick of the U.S. exporting inflation abroad. It would not surprise him if they come out with a resource-based currency alternative. Time Stamp References:0:00 - Introduction1:20 - Best Evidence & FRED3:44 - Bank Crisis Parallels6:47 - Banks & Fed Accounts10:30 - Pandemic & Bank Crisis12:04 - Fed Chart - Top 0.1%15:02 - Account Sizes & FDIC Risk17:17 - Apps & SVB Transfers18:43 - "Regional" Banking Crisis21:56 - Wealth Concentration24:28 - Credit Suisse25:54 - Rule Making & FDIC27:30 - Bank Red Flags29:03 - Protecting Your Money31:52 - CBDC & Bank Consolidation34:40 - Rate Hikes & Volatility37:04 - Hikes & Debt Rollover39:53 - Canada & Mortgage Rates41:55 - Fed Hikes or Pivot44:49 - Eastern Gold Buying47:43 - Power Balance48:29 - Wrap Up Talking Points From This Episode * The Fed's balance sheet exploded in 2008 and again in 2020, leading to inflation and an increase in the money supply for households and businesses.* Banks are being consolidated into a much tighter group, with larger banks acquiring smaller ones.* Other countries are looking to move away from the U.S. dollar and create their own resource-based currency alternatives. Guest Links:SubStack: https://bestevidence.substack.com/Rumble: