In this month’s conversation with 321gold founder Bob Moriarty we discuss why the US banking system is a giant casino. Bob believes we need to burn it down and begin again with a system of sound money, including gold and silver. In addition, Bob believes that the global financial system in such a precarious state, and the gold market is so tiny, that it wouldn’t take much for gold to move up $200/oz in a single day. We also spend some time discuss several junior mining companies, including one that Bob recently wrote about. Without further ado, Energy & Gold’s May 2023 conversation with Bob Moriarty…
Goldfinger:
Bob, we are having some serious regional banking turmoil in the US. It seems like every day now there’s some new bank in trouble. Today, it’s PacWest and Western Alliance.
Clearly there’s losses in regional banks that have a lot of real estate exposure to places like San Francisco or Phoenix, that have had pretty significant downturns in the last year and a half.
Then, they hold a lot of interest rate risk. I mean, that’s just the nature of banks. What do you make of this? I mean, this seems like it’s really gaining steam but the broader stock market doesn’t seem to think it’s much of a risk.
KRE (Regional Banking ETF)
Bob Moriarty:
Yeah, of course it is. Here’s the key. If you go back to March, when the bank failures started, the Wall Street Journal put out an article saying there were 186 banks on the verge of going under. You kind of hinted at it, but this isn’t a perfect storm for banks.
Their vast investments in US government 30-year treasuries were down 29%. That’s supposed to be the safest investment. Commercial real estate is getting killed.
You said regional banks, but I don’t think regional banks are important. I think it’s the entire banking system. It’s bankrupt.
Stanford just came out with study. There were about 4,800 banks. They said 2,300 of them are at risk.
Now, I’m going to ask you dumb question, but I think it’s something you’re aware of. All banks lend long and borrow short. So, no matter how good a bank is, it always has the potential for a bank run.
When Stanford comes out saying 2,300 banks are in danger, they’re really adding fuel to the fire. We need to burn the financial system down.
The debt-based financial system of the west, that goes back to Greek and Roman times has failed and always fails.
We’ve got $300 trillion worth of debt that cannot be paid. The sooner we do something about it, the better. You realize we’re not doing anything to actually solve the real problem.
