May 2, 2023 - The Truth Central - Dr. Jerome Corsi
34:17
Why the 2023 Bank Crash is Worse than 2008; The Return of the North American Union
The bank crash of 2023 is now worse than that of 2008 as First Republic is the latest to go down. Banks are consolidating as bailouts continue. The ripple effects will be felt by US taxpayers and the employment landscape. Dr. Jerome Corsi delves into why this bank crisis is happening and what's to come on today's The Truth Central.Also, Dr. Corsi explores the return of the North American Union proposal, one he fought against in past decades.Visit Dr. Corsi's The Truth Central website: https://www.TheTruthCentral.com'Follow Dr. Corsi on Twitter: @corsijerome1MyVitalC: https://www.thetruthcentral.com/myvitalc-ess60-in-organic-olive-oil/Swiss America: https://www.swissamerica.com/offer/CorsiRMP.phpPro Rapid Review: https://prorrt.com/thetruthcentralmembers/elBecome a supporter of this podcast: https://www.spreaker.com/podcast/the-truth-central-with-dr-jerome-corsi--5810661/support.
This is Jerome Corse and today is Tuesday, it's May 2nd, 2023.
And again, a lot of news today.
Let's start right away with the collapse again of First Republic Bank.
This is now officially a bigger banking collapse in terms of the whole banking system than
the banking collapse of 2020.
We've already surpassed and if you'll recall 2008-2009 was the very deep recession that was caused by the collapse of the subprime real estate market.
When people were getting loans on houses that they couldn't afford and they were put into securities and the securities failed, the banks held the loans as assets and the banks began failing when their assets failed.
So, collectively, we've had now three big banks that have collapsed in 2023.
They've had more assets, these three banks, that collapsed than all 25 banks that collapsed in 2008.
That's pretty frightening when you think about it, but the point is that the banking collapse of 2023 is far from over.
Now, if we take a look at what happened in this collapse of First Republic Bank, JPMorgan is probably the winner on this one.
They came in, JPMorgan Chase, and basically bought the bank.
But they only bought the good assets.
So they got about $92 billion in deposits, which includes the $30 billion that it and other banks put into First Republic last month.
The bank is taking on $173 billion in loans and $30 billion in securities.
But the federal FDIC, the Federal Deposit Insurance Corporation, agreed to absorb most of the bad loans.
And also provided JP Morgan with a very favorably priced $50 billion line of credit in order to get through absorbing this crisis bank.
So the bank is looking for, JPMorgan is going to come out of this with a gain of about 2.6 billion
dollars and it's going to have about 2 billion dollars in integration costs over the next 18
months taking all these first republic bank branches and making them into chase, JPMorgan
chase branches.
But the acquisition is probably going to add about $500 million of profit to JPMorgan.
The loser is the FDIC, the Federal Deposit Insurance Corporation.
It's going to absorb about $13 billion in losses.
So in other words, the public, that's taxpayers, of course, or printing money.
But again, this is an economic disaster when you really appreciate what's going on with this.
And I want to cover one other aspect of it, which is equally important, and that is the shareholders are the big losers.
They got virtually wiped out.
I've got a couple of interesting charts here, but what you can see is that People who held the stock, the stock went down dramatically, very fast.
The bank did not have a run on it like Silicon Valley Bank did.
It just had immediately people were knowing their deposits were gonna be taken care of.
Janet Yellen said even the unsecured deposits would be covered.
But the shareholders and stockholders got what they call bailed.
You get bailed out, you're recovered.
You get bailed in, you get thrown to the wolves.
So they got bailed in.
They mostly had been wiped out on Friday evening by one of the most spectacular stock plunges in stock market history.
And so were the unsecured subordinated bank notes, which is about 800 million.
And these notes were trading at less than two cents on the dollar.
So they're a total loss.
The shareholders, the people invested in this bank, are the losers.
And the Treasury is the losers.
It's one of the biggest bailouts.
And we're now kind of going into a bailout culture that essentially is putting the losses to the public.
We absorb the losses.
But if you take a look at it, I've got a couple of charts on here.
If you take a look at what happened is that these bank notes, which is the subordinated, unsecured.
Subordinated means it's not at the top of the chart.
It's lower on the chart and getting paid off in a bankruptcy.
Unsecured means it's got no collateral with it.
So there's no way to call assets to when the bond goes bad, when the bond can't be paid.
And if you see the chart, the value of these notes just fell right off the charts.
And so also the bank shares just fell right off the charts.
I mean, this is a bank that had very good values.
Again, what's happening, these banks are banks that are, by the way, are very heavily in the ESG, this environmental investing or environmental loan preferences for climate change.
These banks are getting hit the hardest because, again, they had assets which were not economically priced, they were politically preferred because they're ideologically correct.
Now the Federal Reserve's balance sheet, by the way, has also plunged $171 billion
in the five weeks since this bailout sub started. So the Federal balance sheet is now down
significantly and the Federal Reserve is quietly continuing this quantitative easing.
They're basically continuing to buy federal debt.
And it's in the background.
The Federal Reserve is meeting these next couple of days, today and tomorrow, Federal Open Market Committee, which is the one that sets the interest rates, and I'm expecting they will have another interest rate increase.
They essentially, the Federal Reserve wants to slow down economic activity in order to control inflation.
In other words, the Fed, in a sense, wants to cause a recession.
Well, I don't think you have to worry too much about it because we're recessions in motion, but with more interest rates, they're just going to pile on.
It's going to make the recession even more difficult.
And as the Fed is in such a dire situation here with having all these losses and its own asset base, by the way, which includes all these treasuries with very low interest payments to them.
They're getting very little interest on these treasuries that they're holding as assets because they were all issued when the Federal Reserve, many of them were, when the Federal Reserve was having zero interest rates in the Obama years to stimulate economic growth for a Democratic president.
At the same time, Janet Yellen is saying that we are the deadline for the federal government to go bankrupt unless we raise the debt ceiling and allow the treasury to just print more treasury bonds, which we'll buy through the Fed, completely inflationary.
So we're going into a stagflation.
We're going into a stagnant economic growth with the Fed increasing interest rates And that will further depress economic activity.
Mortgages will cost more.
I saw another whole round of layoffs being announced.
There's layoffs starting now on Wall Street and in the banking industry.
And so if we go to our next story, and again, today is not gonna be a day of the best news economically, but again, this is the Truth Central.
We're gonna tell you what's going on, what is the truth.
And truth is, home mortgages, we're suffering, again, another whole decline in the mortgage market.
Janet Yellen is saying, I'll get to that in a minute when I cover it a little more thoroughly, but let's do the home loans first.
We have a housing bubble, basically, in America.
And Chris, if you can show that article and the chart.
The chart here is, I think, very interesting.
If you can scroll down the article and get to this chart.
Now the chart, what the chart shows is that essentially we've had two housing bubbles.
So there was one housing bubble which was around 2002 to 2005 or 6 when we were financing the
subprime mortgages, the people were buying houses, and the next housing bubble came from 2020 to
2023 after the economy was starting up and people were moving out of the cities.
I live in New Jersey and people were moving from New York and for a while, New Jersey properties were being sold instantly.
In fact, New Yorkers were offering more than the asking price to get houses they wanted.
Now, what's happening is that a whole group of cities here This housing bubble is now bursting.
If you look at that chart, you can see what happened after 2006 or 2007.
We went into a deeply depressed housing market.
Below the chart is not good here.
Below the chart means housing prices are dropping.
They're harder to sell because interest rates are higher.
And we're just starting that.
Where the green arrow is on that chart is where we are today.
We're just now going into the housing market crash.
And it's happening in San Francisco, Seattle, even San Diego, Portland, Oregon, Las Vegas, Phoenix, Los Angeles, Denver.
I mean, this is a massive downturn in prices.
And also more difficult to finance.
Because again, interest rates are higher.
So at 5 or 6%, a 30-year fixed mortgage is gonna cost a lot more in terms of monthly mortgage payments than it would at 2% interest on the house.
So again, these are all factors which tend to compound and to produce the issues of pretty much massive economic downturn, which is what we're going into.
Now, when we cover the issue of the debt ceiling, of course it's very politically charged, and you had Kevin McCarthy come out with a bill in the House, the House generally initiates spending bills according to the Constitution, and Janet Yellen is saying essentially that the tax revenues that the federal government is getting right now from income tax coming in, the income tax date was just last month in April, is slow and not nearly what it was a year ago.
So the federal government does not have the money coming in that it needs.
So now it's gonna have to raise the debt ceiling and we're already at 31.4 trillion borrowing limit.
You know, again, if we go to $40 trillion in national debt, we will certainly exceed the gross domestic product
of the United States.
And paying off the interest on this debt, especially in higher interest rate environment, is going to get very costly.
So all these factors are compounding.
And it's again, Chris, if you'll show the Swiss America, we are adding sponsors this week, by the way, we'll have a couple more to really talk about.
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Gold's at about $2,000 an ounce.
Silver's more like $30 an ounce.
Silver will get to 60 faster than gold will get to 4,000.
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And with the dollar going the way the dollar's going right now, I'm not recommending that anybody be very confident about the dollar.
Chris, would you like to comment so far on what we've talked about?
I can tell you this, I had a cold the other day and I invested in bullion to help me feel better.
But that's chicken bullion, that's a different story.
On the other hand, these banks that are falling, and you bring up a point that you've brought up a few times in the past shows, it's kind of been glossed over by news organizations or anybody else because no one wants to talk about it.
But it's what these banks are spending their money on, it's where they're lending.
Remember, This same thing happened with the old credit crunch.
It's where the banks were spending their money.
These ninja loans destroyed, basically destroyed the market and destroyed credit 14 years later.
We knew it was going to happen.
Nobody talked about it.
It was actually brought up on the congressional floor in the early, was it 1994?
Was that?
1994, yeah.
That's right.
And those who brought it up were shouted down, as you pick whatever ism it is at that point.
Right now, the idea is these banks are spending money on these PC causes.
They have these bloated DEI departments, first off, like a lot of businesses are forced to have now.
That's an issue.
We're paying for that.
Also having said that, they're loaning out to the new Solyandri.
I pronounce it Solyandri.
I'm pretty sure I'm wrong, but they're Loaning money to these green companies that aren't very stable, they're not making money, and the money can't come back to the banks, that's what the problem is.
But nobody talks about it because it's just a bank crash and it's somebody else's fault.
Not politically correct, as you say.
I mean, the problem is that if you're going to invest, it's an economic decision.
It's just business.
If you start ideologically investing, then you're going for things that you prefer because of values that may or may not have the same economic return as a just hard calculated economic investment.
So again, it costs something to do this value investing.
And if it gets to be to a massive amount, or when things begin to collapse economically, This becomes another anchor that takes the ship down.
And again, I'm not making a value statement here.
I mean, I'm just basically talking pure economics.
And the idea of the ESG investing is that there is a cost for it.
Now, I've also covered the climate issues very extensively.
My book on the climate, you know, the truth about, and again, we're doing everything we can to tell the truth here.
I mean, this is what reality of what's happening.
The truth about energy, global warming, and climate change.
By the way, there was, I didn't post it, but there was a very interesting piece that Mark Morano was running by a very legitimate climate scientist.
It's on Climate Depot.
I follow it very closely.
I dedicated my book to Mark Morano.
He's a good friend and he's been a stalwart on this climate issue.
But this is Professor Lenmart Bengsten, who is the Head of Research at the European Centre for Medium-Range Weather Forecasting through 1981.
He's got eminent qualifications.
He was the Director of the Max Planck Institute for Meteorology in Hamburg.
He was also a professor at the University of Reading.
He directed the International Space Science Institute in Bern, Switzerland.
And what he's saying basically is that this target here for 1.5 degrees, you know, 1.5 degrees Celsius This target where the, we're supposed to, the IPCC, the Intergovernmental Panel on Climate Change says we have to be no more than 1.5 degrees Celsius above pre-industrial standards because our whole idea is the industrial age was the burning of hydrocarbon fuels and that is hydrocarbon fuels are greenhouse gases which cause the Earth's temperature to rise.
And this professor is basically saying, which I've been saying for a long time, I agree with him, is that the There's no clear relationship between carbon dioxide and temperature.
It's a very complicated relationship because we've had much more carbon dioxide in the atmosphere geologically, in geological time, and we've had ice ages.
So basically there's no simple link between greenhouse gas and the Earth's temperature.
And even the IPCC's reports show this, although they try to erase it.
And much of the non-Western world is really suffering from a lack of energy.
So there's no reliable results showing that the world can achieve this goal, or that it would make any difference if we did.
And if we did achieve the goal, it's going to mean a much reduced standard of living, especially for those in the non-Western world.
The third world will pay the price again of this ideological decision.
Now, let's move on because I do want to cover a number of these stories today in some depth.
And let's go to the next one here, which I think is, again, this story on the BRICs.
The BRIC nations are holding a meeting in South Africa.
Now, the BRIC nations are expanding.
And the BRIC nations are basically an anti-US bloc.
It's now Brazil, Russia, India, China, and South Africa.
That's where they get the B-R-I-C-S.
Brazil, Russia, India, China, and South Africa.
Well, now what's happening is that you're getting a large number of countries that want to join the BRIC nations.
And that's for several reasons.
One is that they are growing and expanding.
Their economies are doing well.
Of course, both Russia and China do not have the solution.
They get along without hydrocarbon fuels.
But now you've got Saudi Arabia, the United Arab Emirates, Algeria, Egypt, Bahrain,
and Iran have formally asked to join the BRICS nations at its annual summit,
which is now going to be held in South Africa.
19 nations have expressed interest in merging.
This is an emerging markets group.
Still the Chinese and Russian economies are not the size of the United States economy.
But while ours is, looks like we're going through a controlled demolition.
You know, we take a building down.
Every step we're taking here economically under the Biden administration seems to be calculated to make the economy worse.
I mean, there's no control on federal spending.
And with the discretionary spending It's smaller part of the budget.
Non-discretionary is part of the budget you can't control its expansion, like Social Security or Medicare.
And as we continue to expand our payouts, we're finding that we're essentially having increasing deficits, which result in bigger debt.
Now, the BRIC nations are going a different way.
They are having currencies which are increasingly backed by gold.
They want to de-dollarize.
They want to move away from the dollar.
And the dollar, by the way, I think as a standard of international trade is rapidly going to be diminishing.
So we're in a situation where we're declining and the rest of the world is looking to go with the bricks to be in a much more positioned position for economic growth.
When you look at the size of these BRIC nations in relationship to the G7, the BRIC nations are going to surpass the US-led G7 states in economic growth expectations very quickly.
G7 used to be the strongest countries economically in the world and their growth, their economies was presumed.
Now we're going into a period of time where it doesn't look like the United States is going to be able to grow.
We may have negative growth.
We may actually shrink our economy.
So, the BRIC nation states account for over 40% of the global population, and around a quarter of global GDP.
All right, let's go to the next story here, which I think is also extremely important right now, and that is the North American Union is back.
Now, if you'll remember, in 2010, I was covering the Security and Prosperity Partnership in North America.
Security and Prosperity Partnership of North America was, at that time, a George W. Bush idea.
He was going to have the three countries, it was going to be United States, Mexico, and Canada.
We were going to merge our regulatory structures.
We're going to create a North American market.
We're going to restructure our infrastructure, our transportation infrastructure.
They wanted this Trans-Texas Corridor, which was going to be this enormously wide highway.
They were going to bring container ships in from China through deep water ports in Mexico and be able to an intermodal, which means you put the Cargo into containers.
Containers then can be carried on ships, which is how they get to the United States from China.
Then they can be put on trains, and that's when you need a North American railroad structure.
That's being put together again.
And you bring the containers to warehouses or to local stores by trucks.
So it's intermodal because the container is carried by ships, by train, and by truck.
You've got three different modes of transportation involved.
And if you take a look at this map, The thing about this map is it's very clear that we are now looking at a structure of a continental railroad system.
It's being put together here by three railroads, the Canadian National, the Union Pacific, and the Group Mexico, which I've covered for years.
And the railroad will go from Vancouver all the way across to Halifax in Canada, hitting most of the major cities.
Most of the major cities in Canada are along the border, going from Vancouver to Calgary, Edmonton, Winnipeg, across to Toronto, Montreal, over to Halifax, and then through the United States, right through the heartland and down into Mexico.
This intermodal transportation system will mean that we can bring in these containers cheaply, and it will essentially allow all these distribution points, all these major cities, the term for a Canadian national, it's going to be across Canada, connecting all their major cities.
In the United States, it will be down through the corridor.
And again, Kansas City will fit in to be a major, major point of entry in the United States.
Actually, at one point there was going to be a Mexican Customs Office in Kansas City, but in the locations in Mexico, Monterey, Mexico City, etc., all these are going to be connected together.
And the shipping of international cargo, which means essentially the Outsourcing of American jobs again and manufacturing has been going on now for at least 25 years, and I've fought it because this is how the European Union was created.
It was first just a coal and steel agreement.
It was just going to be a trade union, and that's where Jean Monnet, who was its architect, knew that eventually it would emerge into what it is today, which is a I pulled this, as you said, for several decades at this point.
sovereignty over the individual countries and again this is a movement
toward loss of sovereignty and towards open borders and towards loss losses of
jobs and the economic status of the United States will be weakened as the
rest of the world will be gaining. Chris do you want to comment? Well I pulled this
as you said for several decades at this point they were always under the
candy-coated acronyms like NAFTA which was very close to what the North
American Union was going to be.
North American Free Trade Association.
Exactly.
Funny thing, I remember talking to you about this when I was hosting a morning show back in the early 2000s.
So this idea of this whole North American Union and this major highway system from the ports in Mexico all the way to the northwest and northeast Canada is not new.
You've been fighting this for, as you said, a very, very long time.
This can happen.
The only good thing is that, well, maybe traveling between National Hockey League teams is going to be a heck of a lot easier.
I'll still take airplane.
They're not going to be on the trains.
Well, I am happy the Devils are going to the second round.
Well, that's because you're not a New York Rangers fan.
Oh, no, not even close.
Especially after 1994, I despise them.
All right, we won't get into sports too much.
The Bruins didn't do very well either.
No!
That probably pleased you as well.
Ah, well, maybe it makes it a little easier, but maybe Florida's dangerous now.
Well, it's going to be a very interesting playoff series.
Hockey's getting faster and faster and younger, and it's a very different game than it was in the decades ago.
It's more entertaining, and it's very popular, but we're not here to talk about hockey today.
The North American Union, I think, idea, this internationalization, is a very strong move and it's hard to stop.
And the concerns I have are the loss of individual freedom and the loss of economic freedom,
which depends upon individual initiative and entrepreneurial activity.
One of the reasons our banks are suffering so much is the Dodd-Frank regulations,
which were imposed by Congress to change banking have been really punishing on banks.
They limit banks' ability to do good economic investing or making loans.
There's so many regulations.
We're getting hamstrung by regulations everywhere we look.
The electric vehicles are gonna be mandated by the EPA, not by Congress.
Changing the tailpipe requirements on cars.
These measures, while they again seem to be, regulations seem to be motivated by bureaucrats who are having their idea of the common good, they're not motivated by economics.
They're not motivated by the laws of economics.
And the laws of economics still control.
You can have all the decisions you want to have regulations on banks that require their lending to follow certain guidelines.
Those guidelines be, you know, whatever they are.
But if those guidelines are not economically motivated, if they're politically motivated or politically correct, as a result the banks are hamstrung and they can't make the investments they need to make in order to run
themselves as businesses. So we're setting up where the only way the United States has been able to
function in the last 40 years has been to create bubbles. And we create bubbles with
excess spending.
I guess one of the lessons we learned out of the depression was, instead of letting the money supply contract, increasing the money supply makes economic activity boom.
But right now, the money supply is contracting, even though we're printing all these dollars.
Because again, the value of the dollar is decreasing, and It's a situation which I think I want people to be prepared for the fact that we're going to have economic difficulties.
The best thing you can do in economic difficulties is pay debt as much as you can.
Get rid of debt as fast as possible.
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Okay, so today is, Tuesday, it's May 2nd, 2023, is Dr. Jerome Corsi on truthcentral.com.
We'll be back tomorrow.
We're broadcasting every weekday.
In the end, God always wins.
God will win here, too.
Maybe a difficult time we're going to go through, but living here in this human condition is difficult.
But we've been through hard times before.
We'll get through this one again.
As I say, it's going to take some character.
It's going to take some resolve.
But you should know the truth of what's going on, and we're trying to tell you that.
