Don't Speak News

The interests of not just the current US administration, but virtually the entire political establishment have been connected to foreign regimes, particularly Kiev, where the DNC’s top leadership (including the Biden family) has a vested interest.

Drago Bosnic, independent geopolitical and military analyst

It has been over a year since the political West started boasting about Russia’s “inevitable collapse”. The mainstream propaganda machine would make one think that Russia shouldn’t even exist anymore, as by now its currency should have been “worth less than toilet paper”, economic activity in single digit percentage of what it used to be before February 24, 2022, and the banking system essentially nonexistent. The Russian people were supposed to be starving, angry, resenting President Putin, eventually deposing him in a “democratic uprising against authoritarianism” and begging Washington DC and Brussels to “come and save them”.

And yet, not just that none of this has happened, but it’s the political West facing most of the aforementioned issues it has so “generously” tried to cause in Russia. After the brief initial shock Western sanctions caused, the people quickly realized that the country is not only stable, but that it’s anything but “isolated and irrelevant”. Perhaps for the very first time, Moscow’s importance as one of the world’s largest suppliers of key commodities, whether it’s food, energy, rare earth minerals, heavy machinery, chemical products, etc. was proven beyond doubt. One might say “not bad” for a “Burkina Faso with nukes”, as many Western observers boastfully claimed for decades.

Russia’s banking system, despite enormous sanctions pressure, including what can only be described as stealing of its forex reserves, is doing quite well. And while Russian banks have been operating under siege for over a year now, the banking system in the US is dangerously close to a 2008-style collapse, forcing Washington DC to respond with the ever so “uncapitalist” bailouts. This essentially means working-class Americans are once again giving out their funds and resources to multibillionaire oligarchs. The most striking example is the recent collapse of SVB (Silicon Valley Bank), followed by Signature Bank on Sunday.

Economist Michael Hudson, the Director of the Institute for the Study of Long-Term Economic Trends (ISLET) and the Distinguished Research Professor of Economics at the University of Missouri, argues that “banks like the SVB have behaved in a selfish and greedy way, yet get de facto US government bailouts, while regulatory capture and campaign contributions prevent the systemic change needed to stop these crises.” The Fed, short for the US Federal Reserve, also holds a lot of responsibility for the ongoing chaos. With the rising interest rates, bond prices start falling, closely followed by stock prices. However, for the most part, banks usually simply hold onto their securities.

According to Hudson, banks only have to reveal the market-price decline when there is a run on the bank and they have to actually sell these bonds or packaged mortgages to raise the cash to enable withdrawals. SVB essentially gambled to make a capital gain by buying long-term US Treasury Bonds, whose interest rates were being raised sharply by the Fed’s tightening. The bank expected that the Fed couldn’t keep rates high without bringing on a serious recession — and indeed, Fed Chairman Jerome Powell said that a recession was exactly what he was aiming for. However, instead of lowering interest rates, the Fed chief announced that not enough Americans were unemployed, so he planned to raise interest rates even more than expected, causing bond prices to fall.

According to the Financial Times, the result was that the SVB was left with an unrealized loss of close to $163 billion. As this was more than the bank’s equity base, the deposit outflows then “started to crystallize into a realized loss”. Hudson reiterated that “this was because banks have behaved in such a selfish and greedy way that, as they have made soaring profits on rising interest rates — the rates they charge borrowers, and the rates yielded by their investments — they have been paying depositors only about 0.2%”. In simpler terms, the banks were acting as monopolies, refusing to pay depositors a fair rate, resulting in a widening gap between them and the investors earning by buying risk-free Treasury securities. Thus, the depositors simply took their money to get better deals elsewhere.

The resulting loss of liquidity is often called a “bank run”, but the depositors can hardly be considered irrational for withdrawing their money due to such conditions. Hudson warned that the threat of a “bank run” applies more to foreign depositors, adding that the USD index fell by 1% on March 13, which is “quite a lot in a single day”. And it was the Europeans who were selling US stocks. Hudson also considers President Biden responsible for doing “everything that he could to confuse the public as to what is happening”, arguing that his March 13 speech which assured voters that the SVB would not be bailed is not true and that precisely this is happening.

Silicon Valley’s deep political ties with the DNC are another important segment of the controversy. The Democrat stronghold is a lucrative source of campaign financing, prompting the troubled Biden administration to try and save its major financial backers. As the campaign for the 2024 election is starting to heat up, we’re likely to see more bailouts for DNC backers. As the administration is squandering state resources for internal political gain, the American people are facing actual economic and financial issues (in addition to many other problems), including the now astronomical student debt, which is inflicting generational damage on the lives of tens of millions of Americans who will never be bailed out.

An estimated 50 million of them have accrued approximately $1.8 trillion in student debt, most of it owed to the government. The debt is delaying marriage and real estate purchases, further causing plunging birthrates. Many students are left bankrupt on the very day of their graduation and will be stuck in debt for decades to come. Lower-income students forced to borrow heavily to graduate usually end up having middle-class incomes without ever being able to lead middle-class lives. Worse yet, approximately 40% of them never even graduate, while the Department of Education projects that at least a third of the debt will never be paid off, according to the NYT’s last year analysis. Given such issues, a financial crash is virtually inevitable. Various monopolies, the fallout of anti-Russian sanctions that cause energy and food price spikes and internal US power struggles are bound to cause further instability. All the while, the interests of not just the current administration, but virtually the entire political establishment have been also connected to foreign regimes, particularly Kiev, where the DNC’s top leadership (including the Biden family) has a vested interest. This would explain why Biden is willing to waste hundreds of billions to keep a failed Neo-Nazi regime on perpetual life support, not only causing the aforementioned issues in the US, but also prolonging the Ukrainian conflict and getting the world dangerously close to WW3

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