You have seen/will continue to see prominent Venture Capitalists (VCs), Influencers, and Opportunists scream “bank run!”
- VC’s companies they have invested in are the ones that banked with Silicon Valley Bank. So, they’re incentivized to cry “bank run!” so the government bails them out and/or makes depositors whole so their businesses don’t run out of money.
- Influencers/the media make a living off of selling fear. “Bank Run!” headlines sell. History, especially recent history, has highlighted how soulless the media is and they will spread fear and/or lies to sell papers and get clicks at a great cost to society.
- Opportunists like the deplorable hedge fund operator Bill Ackman who’s notorious for spreading fear and profiting massively is screaming “bank run!”
His interview on CNBC in March 2020 was one of the most disturbing displays of spreading fear for profit. “hell is coming.” + “going to zero… along with every other hotel company in the world.”
- Companies, lobbying groups, and individuals will do anything to sell you their story or product
- Selling stories: Weapons Dealers on the War in Ukraine are highly incentivized to sell a pro war story (or lie) so the public supports the government buying weapons. Remember the US wars in the Middle East?
Oil companies and weapons dealers profiting massively + the US government ensuring the U.S. Dollar dominance (Saddam Hussein moved away from using the US Dollar currency for oil exports in October 2000) were extremely high incentives for these three power brokers to have a war in the Middle East
- Selling products: Pfizer during Covid is highly incentivized to influence and/or pay off the media to spread information (or “disinformation”) to get you to buy a physical product of theirs (i.e. vaccine, pills, etc.)
- Please note: I have no thoughts on whether the above was right or wrong. Only thoughts on incentives i.e. “follow the money”
Everyone is selling you something — myself included. Think for yourself and come to your own conclusions.
On bank runs:
Seems possible on some banks depending on how the government/FDIC acts. Not super likely, but better “safe than sorry” is my take. However, I haven’t seen a bigger potential of bank runs in my adult life before. Not financial advice: but “too big to fail” banks and risk-averse banks seem safest.
Please note: I’m biased, but I see what’s going on in crypto (moves 2–3x faster than traditional world) and the traditional world right now and fear is mounting with these bank failures. Startups not being able to make payroll is not good…
Nor is some crypto stablecoins having issues due to their reliance on banks for holding their dollars with them… The banks are being stupid and it’s affecting traditional/crypto businesses. However, crypto/blockchain technology isn’t “failing” due to these stablecoin issues with their banks. Crypto was built to replace the financial system:
- Bitcoin Whitepaper: “What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.”
-Fixed supply of 21M Bitcoin that can’t “print money” out of thin air like central bankers
-The U.S. Dollar is backed on “trust” and trust alone — the U.S.’s gold standard went away in 1971.
- Blockchains (i.e. Ethereum): Allow for an entity’s assets to be “visible” in real time. AKA you can see what assets an entity has at all times
-Bank runs happen due to fear that the bank is going out of business and/or doesn’t have the funds to continue operating
-If where an entity’s funds are allocated are visible at all times, the concern or fear of “do they have money?” or “where is their money located?” can be immediately answered which qualms (or incites) fear of a bank run
On Silicon Valley Bank Updates:
- Janet Yellen Says No Bail Out for SVB But Has Concerns About Contagion to Other Banks (Sunday 3/12/2023 AM)
“We’re not going to do that [bail out] again…let me just say that we want to make sure that the troubles that exist at one bank don’t create contagion to others” (1 min video)
- Always good to see Silicon Valley Bank’s C-suite was dumping stock the weeks/month leading up to the bank run…
Update: Silicon Valley Bank and Signature (now closed) depositors will be made whole (Sunday 3/12/2023 PM)
Disclaimer: This is not financial advice. Do your own research