(The Economic Collapse Blog)—It appears that the people running our system have decided that it is time for a wave of consolidation in the banking industry. A key program that was keeping U.S. banks afloat was allowed to expire last month, and everyone knew what that would mean. On Friday, the FDIC quietly announced that Republic Bank had been seized and a sale to Fulton Bank had already been arranged. Have you noticed that they often try to announce bad news like this on Friday?
By the time news of the failure of Republic Bank broke, many people had already started their weekends. And the FDIC probably assumes that most people will have forgotten all about this by the time Monday morning rolls around. But this was a big deal, and it is inevitable that more dominoes will soon start to fall.
At the time it was seized, Republic Bank had 32 branches in New Jersey, Pennsylvania and New York. The following comes directly from the FDIC announcement that was issued on Friday…
Philadelphia-based Republic First Bank (doing business as Republic Bank) was closed today by the Pennsylvania Department of Banking and Securities, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect depositors, the FDIC entered into an agreement with Fulton Bank, National Association of Lancaster, Pennsylvania to assume substantially all of the deposits and purchase substantially all of the assets of Republic Bank.
Republic Bank’s 32 branches in New Jersey, Pennsylvania and New York will reopen as branches of Fulton Bank on Saturday (for branches with normal Saturday hours) or on Monday during normal business hours. This evening and over the weekend, depositors of Republic Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on Republic Bank will continue to be processed and loan customers should continue to make their payments as usual.
I think that a pattern is emerging that we will likely continue to see for future bank failures. Before this seizure was even announced, an agreement had already been made for a larger bank to swallow up the assets of Republic Bank.
Of course taxpayers didn’t exactly get off scot-free in this deal. According to the FDIC, this agreement is going to cost the Deposit Insurance Fund 667 million dollars…
As of January 31, 2024, Republic Bank had approximately $6 billion in total assets and $4 billion in total deposits. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) related to the failure of Republic Bank will be $667 million. The FDIC determined that compared to other alternatives, Fulton Bank’s acquisition of Republic Bank is the least costly resolution for the DIF, an insurance fund created by Congress in 1933 and managed by the FDIC to protect the deposits at the nation’s banks.
If only a few banks fail this year, the Deposit Insurance Fund will be able to handle it.
But what is going to happen if dozens of banks start to fail?
It has been clear for a long time that Republic Bank was in trouble.
They were sitting on “$262 million of unrealized losses on bonds”, and Republic’s stock price had fallen all the way down to 1 cent…
The bank’s stock price has tumbled from just over $2 at the start of the year to about 1 cent on April 26, leaving it with a market capitalisation below $2 million. Its shares were delisted from the Nasdaq in August and now trade over the counter.
Moving forward, we will want to keep an eye on other banks that are currently on shaky ground.
For example, New York Community Bank would have completely collapsed already if a group of investors had not been convinced to pump a billion dollars into that troubled institution…
Recently, New York Community Bank saw wild swings in its stock price as customers began pulling their cash from the regional lender after it said it had identified “material weakness” in the company’s controls. The bank got a $1 billion equity investment lifeline from investors, including former Treasury Secretary Steven Mnuchin’s firm, Liberty Strategic Capital, in March.
Of course it isn’t just New York Community Bank that is treading on thin ice.
Kevin O’Leary of Shark Tank fame is convinced that thousands of U.S. banks will fail during the years ahead…
In the next three to five years, thousands more regional institutions will fail. That’s why I don’t have a dime saved or invested in a single one.
One of the primary reasons why so many banks are on the brink of disaster is because we are facing a commercial real estate collapse of historic proportions.
In St. Louis, the tallest office building recently sold for 98 percent less than what it sold for in 2006…
Take, St Louis’s largest office building – its 44-story AT&T tower – for example. In 2006 this prime real estate sold for $205 million.
But that same now vacant skyscraper recently sold for around $3.5 million – a shocking 98 percent drop in value in less than two decades, the outlet reported.
The Railway Exchange Building, once the crown jewel of downtown St. Louis with its Famous Barr department store and sprawling offices, is also now an empty relic with peeling paint.
All over the nation, commercial real estate property values have fallen dramatically, and our small and mid-size banks are sitting on mountains of commercial real estate loans.
This story is not going to end well, and anyone that suggests otherwise is simply being delusional.
Meanwhile, more signs continue to emerge that the overall economy is rapidly heading in the wrong direction.
For example, Walmart just announced that it is closing two more stores…
Walmart is shutting another two stores next month – bringing the total closures announced this year to eight.
Bosses said the two stores – in California and Wisconsin – were not making enough money.
Walmart, which has already shut six in 2024, is among several major retailers to announce closures.
If bright economic times were ahead, Walmart wouldn’t be shutting stores down.
Just like everyone else, they can see what is coming.
Of course Joe Biden and his minions insist that everything is just great.
They are telling us that the economy is booming and that the unemployment rate is low.
But that is not the truth.
The Ludwig Institute For Shared Economic Prosperity analyzes the data provided by the federal government in order to calculate a “true rate of unemployment”…
Using data compiled by the federal government’s Bureau of Labor Statistics, the True Rate of Unemployment tracks the percentage of the U.S. labor force that does not have a full-time job (35+ hours a week) but wants one, has no job, or does not earn a living wage, conservatively pegged at $25,000 annually before taxes.
According to them, instead of an unemployment rate of “3.8 percent”, the true rate of unemployment is actually 24.2 percent.
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Right now, there are countless people that continue to remain unemployed even though they are desperate to find a job.
Sadly, the employment market is only going to get tighter in the months ahead.
I am entirely convinced that global events will become extremely chaotic during the second half of this year, and that is going to have a devastating impact on our economy.
So whatever you need to do, I would encourage you to do it with haste.
Because the pace of events is not going to slow down for anyone, and it is much later than most people think that it is.
Michael’s new book entitled “Chaos” is available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
…our nation is falling apart piece–by-peace…inflation has made the dollar more worth-less each month…grocery stores are preferring border-jumpers with ‘SNAP’ and ‘EBT’ cards because it makes the grocery store compliant with the ‘DIE’ standards set by the Federal Government…not to mention ‘free’ everything…transportation, health care, dental care, food banks, stipends each month for ‘spending money’, education (in their native language)…free attorneys for adversarial possession (squatter rights) disputes…and to top it off many get Federal Governmental ‘special loans’ at -0-% interest and extended terms for what ?..oh before we forget Biden has pushed his ‘College Debt No-Pay Back Policy’ so now we can expect the universities and colleges to charge (guess who) the US Taxpayer to make up the difference…oh joy !…can we REALLY wait until November before we can get rid of this wonderful President?…November can not come to soon !…hope we still have a country worth saving…
In my experience of the last 60 or so years, banks have gotten so paranoid over losing a dollar that the service is worse than awful. The procedures that are in effect are against the depositor/customer. My experience with banks in the 70’s was good but as time has passed it became more difficult to get my own money out of the bank. My wife now deals with the bank we use because they p*ssed me off one time too many. I use a credit union in a town nearly 50 miles away from home. While they are better they too just have a lower grade of paranoia. If a bunch of them went out of business it could make my banking worse but it would be well deserved for the banks. If I could make it so that I got only cash instead of checks it would be fine with me. I wouldn’t need a bank then and they could all go to 773H. Whoever said, “Give a man a gun and he can rob a few people, give a man a bank and he can rob everyone” was certainly right.