In this video episode from the Liberty & Finance channel, Elijah K Johnson interviews Alasdair Macleod, Head of Research at … they discusses the recent news of First Republic Bank collapse and takeover by JP Morgan, with the FDIC incurring losses of $13 billion … Macleod explains that the underlying problem leading to this event is credit contraction and rising interest rates, which are beyond the control of the FED.

Alasdair foresees more bank failures in the future and notes that the current environment is different from that before 2020, with banks more involved in financial activities, which makes them more exposed to the equity bubble collapse … Alasdair advises that bank lending should be on a local level, and regulations should be aimed at injecting stability into the banking system, rather than creating more risks.

Alasdair notes that rising interest rates and collapsing bank credit lead to credit contraction, making credit more expensive, and banks more risk-averse, thus more bank failures are likely to occur … he adds that the FDIC is calling for higher guarantees on deposits, which shows the authorities’ confusion over bank bailouts

Alasdair suggests that those who want to remain in fiat currencies could opt for inflation-linked or government bonds … however, he is cynical about governments paying a proper inflation-adjusted rate and advises getting out of fiat currencies and credit altogether and hoarding real money, which he defines as Gold & Silver.

Regarding the potential failure of bullion banks, Alasdair believes that the banking crisis could accelerate and take out some bullion banks, leading to new dynamics in the precious metal markets … he thinks that the authorities will try to keep the gold price under control as much as possible and notes that the reason to buy gold is to get out of credit.

When asked about the relationship between the Fed and JP Morgan, Alasdair explains that JP Morgan is the biggest bank in America, and the Fed’s route into commercial banking is via JP Morgan …. he feels that regulations have taken banks in the wrong direction, and regulators prefer dealing with a few large banks rather than a plethora of small banks, which they see as injecting risk into the banking system.

Regarding the possibility of a gold-backed currency by the BRICS nations, Alasdair explains that Russia will most likely adopt the gold standard to secure the value of its Ruble and tie it to legal money, which is only gold … however, the Western world faces hurdles in doing the same, mainly due to current monetary policy and the inability of the establishment to adapt … Alasdair believes that the two types of currencies, gold-backed and fiat, can coexist.

Alasdair advises that his own personal strategy in investment terms is not to invest anymore but just to get out of credit … he notes that there is evidence that the authorities may have been leaning on the gold price to keep it under control in recent weeks … he foresees that the banking crisis could accelerate, and more banks are likely to fail … however, he is cautious, noting that this is not necessarily a one-way ticket.

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