Bad old banking times are back again.
As regional bank shares plunge confidence in the banking industry is high speed fading away. Central Banks war on inflation wiped out the financial sector life support systems. The time of low interest is over. Patient’s are dying. Be prepared for mayhem.
In America last week a growing number of regional lenders saw the value of their shares go down as investors sell- off.
We arrived in a banking night mare not seen since 2008.
It began with Silicon Valley Bank followed by the European Credit Suisse and First Republic collapse as last week trading in shares of a new series of US banks came to a hold.
PacWest in Los Angeles, Arizona’s Western Alliance and First Horizon rang the alarm bell as share prices fell dramatically.
The troubled institutes rushed finding investors or potential partners to survive.
It seems more banks, also in Europe, live in borrowed time as interest rates surge to tackle inflation.
In Europe it is no secret the waggling Deutsche Bank is in the danger zone.
In America, last week a group of banking insiders told The Telegraph that another 2000 banks are insolvent. They have burned almost completely through their capital buffers.
The seemingly unstoppable turmoil comes at a moment as Central Banks continue their rate hikes and another question of Life and Death is in sight: What if lawmakers fail to find a solution for the latest looming circuit breaker, the US debt ceiling.
As the story develops, investors flock to gold as a safe heaven.
Gold prices are again hovering near record highs on the alarm of a deepening US and possibly global financial crisis. Be prepared for unpleasant surprises.