The latest FDIC Quarterly Banking Profile confirms what many have feared: a financial crisis is quietly brewing beneath the surface. As Lynette Zang explains, the real danger is like an iceberg. It is what you cannot see that will sink the ship.
We are now in the ninth straight quarter of unusually high unrealized losses on investment securities. That is no coincidence. This is a direct result of the Federal Reserve’s “higher for longer” interest rate policy, a strategy that is slowly breaking the financial system. Most people will not recognize the damage until it is too late.
Banking Losses Are Mounting
The numbers speak for themselves:
- $56.5 billion in unrealized losses on securities held to maturity and available for sale
- $38.9 billion increase in losses from the previous quarter
- Residential mortgage-backed securities are now driving the losses, not just commercial real estate
Rising interest rates push down the market value of bonds. As Lynette illustrates, when interest rates rise, the principal value of securities falls. These losses are already far worse than what we saw in 2008, yet the public is still being told not to worry. Why?
Because the system depends entirely on your confidence.
Cracks in Consumer and Corporate Credit
This crisis is not limited to investment portfolios. Delinquencies and defaults are spreading rapidly:
- Credit card charge-off rates have reached their highest level since the third quarter of 2011, during the aftermath of the last financial crisis
- Non-owner-occupied commercial real estate loan defaults are at their highest level since 2013
- Defaults are growing among banks with over $25 billion in assets. This is not just a regional bank problem anymore
- Big banks' commercial real estate exposure has surged 40 percent when repackaged real estate debt is factored in
Toxic debt is being bundled and sold into retirement portfolios like 401(k)s, mutual funds, and ETFs. The average saver is being set up to hold the bag when the collapse unfolds.
The Deposit Insurance Fund Is Not Ready
Let’s examine the Deposit Insurance Fund (DIF), the money the FDIC holds to protect your deposits if a bank fails:
- The DIF holds $125.3 billion, which may sound reassuring until you consider the losses from just two banks
- The estimated loss from Silicon Valley Bank and Signature Bank was $22.5 billion, with $19.2 billion going to protect uninsured deposits
- Banks will not be required to fully replenish the DIF until 2028. That is four years too late if the crisis erupts now
Even worse, the FDIC’s reserve cover ratio, which measures how much they have set aside for expected credit losses, dropped from 123.3 percent to just 92.8 percent in one quarter. Losses are growing while reserves are shrinking.
They Know, But They Will Not Tell You
Behind closed doors, FDIC officials are openly admitting that they do not want the public to know how serious this is. Why?
Because it might cause people to take their money out of the banking system.
The public is being kept in the dark to prevent a bank run. Meanwhile, the legal structure for bail-ins has already been established. If your bank fails, they can legally use your deposits to keep the bank afloat. You are not a depositor. You are a creditor. And your money is not as safe as you have been led to believe.
The game is about confidence. When that confidence breaks, the whole system follows.
Central Banks Are Preparing With Gold
While the public is distracted, central banks around the world are quietly increasing their gold reserves:
- Central banks are buying more gold than ever before
- 2024 marks the strongest start to a year for gold buying on record
They know what is coming. They see the risks in the system. They are protecting themselves with real, tangible assets.
You should be asking yourself: if central banks are shifting into gold, why aren’t you?
Prepare Now With Sound Money Strategies
You do not have to be a victim of the next financial collapse. You can take control of your future with sound money strategies and physical gold and silver.
The evidence is clear. The warnings are no longer hidden. The window to act is closing.
Will you be ready when your bank locks the doors?
Take action today.
Explore how Zang Enterprises can help you protect your wealth with physical gold and silver. Learn about sound money strategies that empower you to secure your financial freedom, preserve your purchasing power, and prepare for the next economic shock.
