May 8, 2023 - The Truth Central - Dr. Jerome Corsi
35:02
Thousands of US Banks are Potentially Insolvent; California Defaults on Debt
We have already seen several banks collapse or lose stock value, but is the worst yet to come? A Stanford Professor deduces there are thousands of U.S. banks which are potentially insolvent. This could lead to a worse situation than expected. Meanwhile, while California democrats are working out details to issue slavery reparations to the tune of over 1 million dollars per person, the state has defaulted on its debt.Across the proverbial pond, the state-run British Broadcasting Company has produced a primer on what they see as the future of our civilization from 15 minute cities to dining on insects.Dr. Jerome Corsi breaks it all down, analyzes what's happening and discusses how to fight back on today's The Truth Central1MyVitalC: https://www.thetruthcentral.com/myvitalc-ess60-in-organic-olive-oil/Swiss America: https://www.swissamerica.com/offer/CorsiRMP.phpThe MacMillan Agency: The MacMillan Agency - The Truth CentralPro 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 Dr. Jerome Corsi, and today is Monday, May 8, 2023.
Thank you for joining us on TheTruthCentral.com.
This is Dr. Jerome Corsey and today is Monday, May 8th, 2023.
Thank you for joining us on the truth central dot com.
We're doing a podcast every weekday.
Let's get started right away.
The first story I want to cover is that over the weekend, J.P.
Morgan, which is one of the big investment banks, banks in general, I mean, J.P.
Morgan Chase is the biggest in the banking sector, issued an alert which said that they believe the U.S.
regulators were eyeing banning short selling amid the banking crisis.
Now, let me explain to you why this is important, what it means.
I mean, short selling is a common practice on Wall Street.
You basically think a stock is going to go down in value.
So you essentially sell a stock you don't own at a future date.
So you say, I'll make a contract with you in X period of time.
I'll deliver you so many shares of XYZ company.
Well, you figure that basically you're going to be able to set the price today of what you're going to sell them for.
When you have to buy those shares to fulfill the contract, you'll pay less and you'll make the profit of the difference.
So you're selling something you don't own in selling short, and you're getting a fixed price at today's price.
So let's say we say the bank shares are worth $10 a share today, and I sell them to you in three weeks in the future.
I'm betting that they're going to go down.
You're betting they're going to go up.
I say the price is $10 three weeks in the future. If the price is $8, I make $2 a share.
If the price is $12, you make $2 a share. That's how short it's a bet.
Now, the reason that J.P. Morgan is putting out this alert is that there's been a lot of money made
over the firms that track short selling have determined that about 1.2
billion short sellers have made 1.2 billion in recent weeks by betting against these
regional banks that hold about 532 billion in deposits.
When these banks collapse and their shares go dramatically down, There's windfall profits to be made by the short sellers, especially when these shares were going down 20, 30, 40, 50% a day.
You're making a lot of money if you'd bet that stock was going to go down, and the truth is that there's a lot of people on Wall Street and in the government, the government can get, even the members of Congress can short sell, that know this is going to happen and they make bets that are really locked in because they have inside information, which they shouldn't do, but the inside information Is just kind of knowing that the banks are in trouble and that they're likely to have to be bailed out by the Federal Deposit Insurance Corporation.
Now, the reason I'm bringing this up today is if the regulators are thinking about ending short selling today, it's because they know that the bank failures are not over and that the economy could enter into a massive Collapse of the stock market at any day, any time.
It could have a catastrophic closed crash, and they want to prevent windfall profits from people who know that's going to happen, or the increasing of short selling, which would create the emotional or the attitudinal idea on Wall Street that the crash is coming.
Now, I think all of us who have studied the economics and followed the trends know it's coming.
And this is just another sign that, in fact, if you're reading the tea leaves, this is another sign that we're headed for one of the major economic crashes in U.S.
economic history.
It could, in some ways, don't know that it'll rival the Depression-era crash.
We are a much bigger economy, but with the weakness of the dollar, the de-dollarization going on, I'll cover that in just a second, The dollar is under great strain.
We have been spending money like crazy, trillions of dollars that Biden has just made up.
Our debt now as a nation is $30 trillion.
It's rapidly going to go to $40 trillion.
I think it's almost like $33 trillion right now.
And the debt service on that is impossible.
Well, in the New York Times over the weekend, the second story, One of the professors at Stanford Graduate School of Business, this Amit Siru, wrote an article saying that our banking system is at a critical junction.
The essay that he wrote in the New York Times, this was on May 4th last week, said, yes, you should be worried about a potential bank crisis.
Here's why.
And as he detailed it, what I've been saying is that we're seeing a credit crunch like we saw in the 2008 financial crisis when the subprime housing market bubble burst.
Now, right now, we have a similar kind of collapse shaping up.
We have more, actually we have, A larger number of assets in banks that have failed already than failed in 2008.
So we've already got a bigger bank crisis with only a few banks collapsing.
And what it looks like is the FDIC is preparing for these regional banks.
Now we have PacWest and Western Alliance.
Their stock is under duress because, again, these banks are having asset problems.
So what this professor is pointing out is really what I've been saying, and that is rapidly rising interest rates.
And the Fed last week just raised interest rates another 25 basis points.
So we've now got interest rates at about 5.25% cause basic difficulties for the banks because their investments are very sensitive to interest rates.
They have mortgages, they have commercial real estate, all these are fixed rate loans.
The U.S.
banking system market value of assets is around $2 trillion lower, this professor is saying, than is suggested by their book value.
What does that mean?
It means you book an asset at X, Y, Z, because the treasury's gonna pay that bond back.
So you book the value at par, which is the value of the bond.
But when interest rates go up, that bond, because it's yielding less, has to be sold or marked to market at a discount.
So that bond may only be worth 80 or 90% of what you paid for it.
Now, if that's the case, the professor, I think is correct in saying there are 4,800 banks in the United States that have assets around $2 trillion lower than their book value.
Now, when that gets marked to market, those banks are going to be in trouble.
They're going to not have enough assets to maintain their asset to liability ratio to remain solvent.
Now, the real problem, this professor's hitting on all the points I've been making on the podcast, is the commercial real estate loans, which are worth about 2.7 trillion, they make up about a quarter of an average bank's assets.
Many of these loans are coming due in the next few years, including this year.
Higher interest rates depress the values of these commercial properties, especially when their rents have to increase and the vacancy rates are up.
So we're seeing that we could have a commercial real estate collapse.
Over 40% of the U.S.
labor force is now working remotely.
That happened in May 2020.
It started with the pandemic.
The return to the office has been slow.
Only about half of the workers in the nation's 10 largest cities working in office buildings, only about half came back compared to pandemic levels.
So these buildings are largely vacant and their occupancy is determined by how many people pass their cards through the tolls to get into the building because they have permission to be there as an employee.
When those numbers go down and the office space is not rented, you have to refinance the commercial real estate.
You're going to be facing a much more difficult refinancing and the bank that If the prior refinancing goes into default, the bank has a problem with a loan that's non-performing when an owner of a commercial real estate business has less rental income than they need to service their debt on the commercial real estate.
So if the federal government has to guarantee all these deposits, The federal government itself is going to be facing a major
debt crisis. We right now have the potential of facing bankruptcy in the federal
government if we don't come to a raising of the debt ceiling. And raising the debt ceiling is not
going to fundamentally solve any of these problems because we are constantly facing with an economic
building crisis.
It's like a collapse, like a perfect storm.
So we're about to have so many things impact that reinforce each other that I think a crash is inevitable.
Now, Chris, I'm going to want you to comment on this and I want to show the Swiss America.
Again, these are our sponsors.
And there's two of them I want to highlight here very quickly.
Swiss America, if you take a look at this Walking Liberty half-dollar offer, which is a very, very good offer.
Swiss America, you can fill out the form on the website.
You go to the top sponsors in the black bar.
And you pull down the Swiss America in the menu, and the Walking Liberty half dollar offer is there.
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And I encourage you to do this because if you have some gold or silver or platinum, you've got tangible value.
And as your dollars buy less, Your gold and silver are going to be worth more dollars.
In our previous crashes in 1970s and in 2008, gold doubled in value.
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Silver costs a lot less, $30 an ounce, as opposed to over $2,000 an ounce.
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Again, you pull down sponsors, you go to the McMillan agency, there's a form to fill out.
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He'll give you advice. You may have an old annuity or old life policy that you can switch
for a modern higher yielding one. When the interest rates go up, annuities and universal
life are good products.
These index products attach it to an index so that if, for instance, the stock index goes up that you bet on, you'll gain.
But they're fixed annuities.
You won't lose if that index goes down.
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Annuities and universal life contracts are especially important in times of financial crisis because of their unique tax advantages.
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And can help you make an investment decision.
I'm trying to tell you basically that your dollars are going to be worth less.
You better take steps now to make sure that you've got some investments that will be counter to that.
People say, we can't eat gold.
No, but for, uh, from two millennia, if you've had gold, you'll be able to eat.
And the point is, with an annuity, you'll have resources that you can appreciate, indexed universal life, geared to the amount of money in your retirement account, can be planned completion for your family, should something happen to you.
And it will appreciate nicely for you, for your retirement years, you'll have at least something that you've invested in today, at the start of what's gonna be a dramatic economic collapse and interest rate rise.
Around the world I also see there's much going on with the BRIC nations.
There's going to be a meeting right now in South Africa.
There's 19 countries that want to join the BRIC nations.
I followed a whole series of articles over the weekend.
We'll probably cover some of this in the week.
There's too much today to focus on it, but what's happening is that there is really a coalition forming that wants to de-dollarize, and it's a very, very strong coalition that's reaching a Crossroads moment.
Because essentially these BRICS countries, which are Brazil, Russia, India, China, and South America, Iran wants to join them.
They are seeing that the U.S.
dollar, which has just been inflated by its being printed, you know, all this modern monetary theory, fiat currency, we can just print as much of it as we want.
That's an extremely destructive idea.
And it's gotten us into the point where our currency is not going to be the world's reserve currency.
Which means a lower, de-dollarization means a lower standard of living for the United States.
We're for the first time in our lives, the people alive today, going to be facing the petrodollar being dethroned, and these countries trading in hydrocarbon fuels when we are committing economic suicide, going to green energy, which is more expensive and less powerful, while China, Russia, Brazil, these BRIC countries understand that they need cheap energy in order to grow.
We're self-destructing economically, and I think it may be planned.
I mean, this whole idea that we need to continue debt, that we can't stop our spending, this is, I think, a calamity that has now reached a proportion where it's going to crash.
Let's go to the next couple stories, which I think are equally compelling.
I saw over the weekend that California finally did default on about $20 billion of federal debt.
Essentially, what happened was during the pandemic, a variety of states borrowed money from the federal government to pay the increased unemployment insurance benefits that were being paid during the pandemic.
And so California, which is not really an employer-friendly state, basically had this borrowed money, 22 states borrowed money for unemployment insurance for the federal government, all but four, California, Colorado, Connecticut, New York, had paid back their debts.
California owes the largest amount, $18.6 billion, as of May 2nd.
New York, $8 billion.
Connecticut, $187 million.
And Colorado, $77 million.
But California actually defaulted.
And one of the other problems is that in California there was massive fraud.
It's a persistent problem with the unemployment insurance problem in California.
And there was a $2 million federal grant in 2013 to address the issue with new computer software.
But again, the California program was estimated to cost $14 million to operate it properly, and that stopped.
California is essentially bankrupt with all these benefits they're paying out.
And it's now actually defaulted.
We're going to start seeing states and possibly even the federal government default.
And again, this has not happened, but in a depreciating currency market, defaults are very serious.
You'll see the commercial real estate default.
You'll start seeing housing foreclosures increase as people lose jobs.
And by the way, I watched over the weekend, the tech layoffs are continuing.
They are now surpassing levels that were from previous years as the tech industry is shrinking and other industries are shrinking as well.
The economy is contracting and energy prices will probably accelerate if the OPEC nations continue to cut production in order to maintain the price of oil while global economic demand is less than we go into possibly and I think probably A global economic recession or depression.
And I don't think it's going to be short term.
Now while California is doing that, California also, California is the first country to have a reparations task force on the issue of slavery reparations and the task force had a vote, a panel, the task force met and they approved reparations of up to 1.2 million for each of California's black residents.
The activists are still demanding More than 200 million.
They want more than 1.2 million for the black residents.
And this is at a time when California is facing a hard time meeting its obligations.
Now, again, if we have reparations being a further drain on the treasury of California, it's going to be another issue which pushes California closer to bankruptcy.
And we will see states go bankrupt in what's coming.
I'm not saying that, you know, this whole issue of reparations is very complicated.
I don't think we can go back and redo all of the sins of the past.
But if we attempt to, it's going to be very expensive.
Chris, you want to comment on the economics here so far?
I was going to give you a minute, but I want to carry these stories forward.
Now, those are the economic stories we're going to cover today.
We're going to switch gears, but before we do, would you like to comment?
California is an example of an irresponsible government.
We are hearing this whole debate over the debt ceiling.
The Democrats are screaming, we always pay down our debts, we're America, we have to do this, we have to raise the debt ceiling.
Look at your cohorts in California, they've defaulted already and they're looking to pay, what was that, over a million dollars per qualifying black resident in reparations just to pat themselves on the back.
Where is this money coming from?
It's going to come from employers, it's going to come from They're hoping it comes from Silicon Valley and Hollywood, but even they're going to have a breaking point.
They already are.
I mean, you're finding that Hollywood's struggling.
Movies not being made in Hollywood are being made elsewhere.
You're finding Silicon Valley with massive layoffs.
Silicon Valley Bank has already defaulted.
These banks are engaging, as are the governments, in these ESG policies, which are basically green energy policies designed to punish the use of hydrocarbon fuels.
But we'll get to that in a minute.
This next story, I think, is also kind of alarming.
And that is, I'm following Ukraine very carefully, and this Ukraine counteroffensive is supposed to be beginning.
Right now, Russia has been sending a massive drone attack on Kiev.
Russia, I think, is going after Kiev.
But this nuclear power plant Which is in Zaporizhia.
I'm not sure I can pronounce that correctly, but it's in southeastern Ukraine.
It's a massive nuclear power plant, but the problem is it's where a lot of the fighting is going on.
Now, over the weekend, this was being reported by the I believe by the BBC, yes by the BBC, that Russia was doing mass evacuations of towns near this nuclear power plant.
Russia told people over the weekend in 18 settlements in this region to get out.
So basically there's Five hour waits as thousands of cars left these different cities and the UN nuclear watchdog is warning of a severe nuclear accident.
Essentially it could have another Chernobyl or it could have a complete meltdown of the plant depending upon whether or not it is shelled or attacked in the fighting that's going on.
Either side could attack it.
It could happen accidentally.
So Russian forces now occupy much of this region And Russia's really evacuating people because they expect that if this Ukrainian counterattack begins, this nuclear power plant is in danger.
I'm not sure which side would go after it first, but to have a war raging around a nuclear power plant, Does not seem to me to be a good idea.
That's not going to be good at all, because if you look at what Vladimir Putin really wants is to cement his legacy as the guy who put the old Soviet Union together.
So now seeing some of the old republics having some issues, you don't want to destroy them.
You want to make sure you can push them into submission, but you don't want to destroy anything.
Well, I think Ukraine has also been torn.
I've started to write some articles.
I'm going to have one again this week in the Gateway Pundit on this Ukraine situation, how Biden and the others have exploited it.
And Ukraine has been a torn country between Germany and Russia going back, I mean, World War II, the western part of Ukraine was Nazi and the eastern part was Soviet influenced.
That has not changed.
They're still divided between an alliance between Germany and Russia.
The war is extremely dangerous and escalating.
Let's go to this last story, while we're still, I want to kind of keep this to a half an hour if we can.
The next story is also BBC, British Broadcasting, and it looks to me like we're now getting messages delivered that to achieve this low carbon net zero emissions by 2050, people are going to have to adjust to a reduced standard of living.
Finally they're telling the truth about what this agenda is about.
We're gonna basically have to have less energy use.
So people are gonna have to be cycling and walking rather than riding in cars.
I think this whole electric vehicle.
I saw, by the way, someone had an accident with electric vehicle.
I think the repair bill was in the tens of thousands of dollars.
Fender benders are very expensive in these EVs.
So, rejection and flying.
Cities that are limited by 15 minutes.
You can only go 15 minutes from where you live.
Restrictions in food.
So, you've got this Julia Steinberger, Professor of Ecological Economics at the University of Lausanne in Switzerland.
So basically, we've got to have experimental foods.
We're not going to be able to eat dairy.
We're not going to have meat.
We're going to have to have a planetary health diet, which is an optimal balance, but it's going to be, you know, bugs are included, but meat's excluded.
We're going to have to get rid of a lot of our electronics.
We're going to have to deal with renewable energy, not fossil fuel.
They say it's going to be better for us all.
We're going to be much healthier.
Yeah, right.
I doubt it.
And we're not going to live as well in consumer goods.
The shift to the green economy Could create, they say, 18 million jobs.
Well, they've said this constantly.
And what happens is, even under Obama, where we spent billions of dollars to try to make solar and wind work, solar and wind are still in the 15%, maybe, of the energy consumed by the United States.
We're still very dependent on hydrocarbon fuels.
And I don't see that changing.
But what is changing is now the narrative Finally, these international organizations are beginning to, and the climate movement is beginning to signal to people what it really means.
As I said, and I've written this book, The Truth About Energy, Global Warming, and Climate Change, saying that this is really a Malthusian depopulation movement.
Anyone who knows climate science knows that carbon dioxide is not the thermostat of the Earth.
It's a relatively minor molecule in the atmosphere.
70% of the greenhouse gas, gases in the atmosphere is water vapor, not carbon dioxide.
And the Earth's history, which I review in the book, we've had cataclysmic change.
For 80% of the Earth's history, there's nothing existing on the surface of the Earth.
We've had massive changes in the Earth.
It's not just a little bit more carbon dioxide, yet this hoax Is reshaping life and getting the Western nations to abandon the cheap, reliable hydrocarbon fuels upon which our standard of living have depended.
It's a, again, suicidal, and we're in this cycle.
So I don't think this can be immediately changed because the narrative, this neo-Marxist narrative, which I'm warning in the books I'm writing right now, My second one is in the press, which is the truth about Neo-Marxism, Cultural Maoism, and Anarchy.
That's the age we're going into, and I want to explain the political theory which justifies, to the left, this narrative that they know is scientifically not true.
The global warming is going to destroy us all.
It's really a neo-Marxist agenda and it's designed to attack hydrocarbon fuels as a way to end capitalism.
We've covered a lot today.
I want to end By focusing on one of our other sponsors, and by the way, we're gonna do some broadcasts starting hopefully this week with our various sponsors that will have additional, not news program, but focused issue broadcasts where we cover in-depth various issues.
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So we're covering a lot this week and I'm thinking it's going to be a watershed week.
We've got Robert Kennedy Jr.
now talking about the Kennedy assassination.
I'm working strongly on that.
I'll probably have another book on that this year.
I'm writing.
I decided to get back active again and I'm doing both doing podcasts every weekday and writing.
I'm writing at americanthinker.com and also in The Gateway Pundit.
Very pleased to be on both sites.
We're publishing articles here.
If you take a look at the Truth Central, you can see that we have a lot of sites we're podcasting on, including audio only, so there's lots of different ways you can listen to the program every day.
They're all up at the top right quadrant, you can see there, and we're listing the articles.
There's a lot of content on this website.
We're posting new stories every day, which I think the economy is the issue.
It's not being covered.
You're not getting this news from the mainstream media, but I'm going to make sure you know where our past podcasts are there.
We make it very accessible to follow us.
And we greatly appreciate getting a lot of people who are saying they're glad I'm back.
And I think you're going to find what I'm writing.
I believe I'm writing now some of the more important books I've ever written.
Any final comments?
Again, this whole idea of eating bugs, mealworms, and everything else, it's absolutely ridiculous.
I've talked with somebody in recent days about this, and there are young people who say, well, it's a great source of protein.
Well, it's a great source of protein, then go eat it somewhere.
Take care of it on your own.
The government should not be conditioning young people or I'll say it,
grooming young people into, uh, children and other young people into a new lifestyle.
They're the common joke amongst a lot of YouTube personalities who are on our
side is pretty soon young people will be waking up when they're getting older.
They're, they're going to be waking up in their little pods, getting up having their bugs with a cereal,
that sort of thing and getting out through the day, maybe taking their electric bike through their 15 minute
city and staying in their bubble. And that's going to be what the future is
like.
It's that dystopian science fiction future. We see, we saw in a lot of movies back in the seventies and eighties.
Well, there's also the, I still believe the possibility.
of reversing this, but I think it has to be with a renewed return and belief in God and the values that have allowed Western civilization and capitalism to thrive.
These are in disfavor right now because we're going through a neo-Marxist period.
But I think eventually, as every previous Marxist period in history has proved, Marxism is good for destroying, but it is not good for creating.
Millions of people have died over communism.
So call it like it is.
The media loves to call people on the far left, which that's what they are, progressives.
In fact, when they're reverting to a government which has failed several times in several countries, that's truly regressive, if anything else.
They believe they'll do it right.
That's always the thing.
They didn't do it right.
I always hear, they didn't do it right.
Of course they did it right.
It just never works.
It doesn't work.
It's like, you know, try to run a city with solar or wind.
I mean, it just doesn't work in terms of the energy physics.
All right, so this is Dr. Jerome Corsi, my producer Chris.
Here it is Monday, May 8th, 2023.
In the end, God always wins.
God will win here, too.
Thank you for joining us.
We'll be back every day this weekday, weekdays that we're broadcasting, and thank you for joining us.
