Posted BY: | NwoReport
The failure of Silicon Valley Bank (SVB) is just the tip of the iceberg as more than $620 billion in losses across the entire banking sector looms as a financial ticking time bomb.
According to the Federal Deposit Insurance Corporation (FDIC), the banking sector is currently sitting on unrealized losses of well over half a trillion dollars that at some point will have to be realized – but when?
The answer right now is nobody knows, but one thing is for sure: the FDIC, the Federal Reserve, and the Treasury Department are doing everything in their power to plug all the leaks on this financial Titanic to avoid a contagion event – at least for now.
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We are told that the reason for this predicament has to do with the loads of bonds and treasuries that banks bought up during times of low-interest rates. Those bonds and treasuries are now deeply underwater as Jerome Powell continues to hike interest rates in a failed attempt to quell skyrocketing inflation.
“This is because higher interest rates mean that new bonds accrue higher rates of returns for investors,” writes Ryan King for The Washington Examiner. “As a result, older bonds have comparatively lower rates of return, rendering them less desirable for investors and therefore triggering a plunge in the value of older assets.”