Collapse of a Financial Cycle or the Entire Financial System?

 Silicon Valley Bank (SVB) failed on Saturday.  Today we are reading that Signature Bank of New York has also failed.  Of course any type of "bad news" like this will probably mean the stock market will suffer today.  And with rising interest rates, bonds are typically not where you want to be.  In fact they are saying that SVB's biggest problem of buying US Treasuries which were losing value as rates rose.

We know all of this news pushes us ever closer to cashless society that the Bible says will be here.  But could all this bank news just be your typically up and down of markets and business cycles?  Or could this rip into the entire system and expose that there is a Ponzi scheme holding together all the "faith and confidence" that is required to keep our fiat currency of US Dollars afloat?

The mainstream media continues to tell us that the economy is in fine shape, and you can believe that if you want.  But evidence continues to mount that indicates that we are headed for very serious trouble.  

Inflation is out of control, home sales have fallen for 12 months in a row, large corporations all over America are conducting mass layoffs, and hunger is spreading like wildfire as economic conditions rapidly deteriorate.  

If this is "fine", I would hate to see what "bad" would look like.  Virtually everything that normally occurs during the early stages of a major economic downturn is happening right now, and that includes an inversion of Treasury yields...

On Tuesday, the difference in the yield on 2-year and 10-year Treasury notes further inverted, with the yield on the 10-year falling 103 basis points, or 1.03 percentage points, below the yield on the 2-year yield. This dynamic has preceded each of the last eight U.S. recessions.

Please read that last sentence again.

This has happened for eight recessions in a row.

Do you think that by some miracle we won't have a recession this time?

At this point, we are actually witnessing the deepest inversion that we have seen "since September 1981"...

The spread between the monetary policy-sensitive two-year U.S. Treasury yield (US2Y) and the 10-year (US10Y) UST yield reached the deepest inversion since September 1981, as bond-market investors priced in higher-for-longer interest rates following Federal Reserve Chair Jerome Powell's Senate testimony earlier in the session.

Wow.

1981 was more than 40 years ago.

As one analyst told his clients, this is "a big psychological level" that has just been breached...

"We are not sure that -100bps means anything different than -80bps or -90bps did, but it is likely a big psychological level that many will notice," BTIG analyst Jonathan Krinsky wrote in a note to clients.

But don't worry.

CNN says that everything will be just fine.

You believe them, don't you?

Needless to say, a lot of Americans don't believe them.

One of the things that I appreciate about Challenger, Gray & Christmas is that they don't have a political axe to grind.  They just report the facts, and their latest report tells us that announced job cuts in the United States are running 427 percent higher than they were at this time in 2022...

So far this year, employers announced plans to cut 180,713 jobs, up 427% from the 34,309 cuts announced in the first two months of 2022. It is the highest January-February total since 2009 when a total of 428,099 job cuts were announced in January and February.

Let those figures sink in for a moment.

When the number of planned layoffs is running 427 percent higher than a year ago, your economy is moving in the wrong direction very rapidly.

Here;  Collapse Of An Economic Cycle Or The Entire Financial System? (prophecynewswatch.com)

We have no idea if we are on the edge of another Great Recession such as 2007-2009.  But we do know that nothing got "fixed".  Sure, we learned a lesson on giving out mortgages to folks with no jobs.  But quite sure we haven't learned our lesson on CREATING US Dollars out of thin air.  You can do it a little and you can do it for a little while.  But you can't do it a lot and you can't do it forever.