FDIC Prepares for Bank Failures as Bad Assets Climb

We're not alone in thinking another global financial crisis is inevitable. Financial leaders who regularly meet at the USA's Federal Deposit Insurance Corporation are also hard at work in hopes they will be prepared for the resolution of the original 2008 crisis, which was merely papered over by bailouts and delayed bankruptcies to come.

The following are some brief excerpts from the FDIC's Systemic Resolution Advisory Committee's meeting from early November 2022.

The FDIC problem bank asset size admittance, that figure ballooned this year. And the shape of their data and this graphic suggests the USA and the world might be sleepwalking into eventual financial spillover events, which can be boiled down to stressful time frames when seemingly everyone increasingly wants their capital back.

Given the tone of this FDIC meeting from last month, it is important for everyone to review the current bank bail-ins laws, and how a prudent bullion investment allocation can help individuals protect wealth if and when these laws are used systemwide.

The silver and gold spot price markets closed with strength in the week's trading to end the year.

The daily silver price closed over $24 oz ask, and the daily gold price closed over $1825 oz ask.

The spot gold-silver ratio ends the year at 76.

For the year, platinum, silver, and gold spot prices ended higher in fiat US dollar terms.

This was the year when the fiat financial authorities finally began partially admitting that China had become a bigger buyer of official Gold Bullion reserves.

The world has not had this much gold bullion buying from government central banks since the mid-1960s, only a few years before the last admitted conspiracy to keep gold prices contained fell apart.

Looking backward with a longer-term view of gold throughout this full fiat currency era.

The late bond billionaire trader, Scott Minerd, in May of 2021, left us this brief longer-term take on gold and silver bullion values in the years ahead. Have a listen to what he then said in our update this week.

While the US government continues to underreport price inflation, even by using their data, these are some of the sobering price increases we have seen in only the past 12 months.

In terms of broader asset class performance in 2022, bullion held its own while many paper assets lost mass value in record size.

In the long-used 60/40 portfolio theory, asset managers put 60% of their capital into equities and 40% into bonds as some sort of hedge. Well, that didn't work, and it was the worst performance for such a tactic in more than a century.

Asset managers might want to look at precious metals and commodities before they lose their livelihoods.

In a bit of industry news this past week, China's Shanghai Gold Exchange announced that for all of the next year, 2023, a handful of fees for the SGE silver market will be fully waived and complimentary in order to help further the development of the Chinese silver market.

While there remains a +17% VAT or value-added tax on silver bullion in China, the country still consumes a large amount of silver bullion for industrial and manufacturing purposes. 

In terms of physical silver bullion deliveries over the last five years, the SGE has physically delivered more than two times the amount of silver bullion withdrawn from the COMEX over that same timeframe.

 And to close this year, a quick reminder that even with rapidly rising interest rates and a relative bull market in fiat US dollar terms versus other faster-debasing fiat currency units. 

Gold is poised for great years to come in virtually every major gold price chart worldwide.

Before we rifle through these full fiat currency ear price charts starting in 1970 and running through nearly the end of this year. I want to remind you how to read these price chart bars (see the 9:50 mark in the video embedded above). 

Perhaps press pause or come back if you like to that screen to ascertain the blue versus red bars and intra-year price wicks and what information they convey.

Beginning with the fiat Federal Reserve note, aka the fiat US dollar, this and the following gold price charts are only updated through yesterday's data on the 29th of December 2022. 

Perhaps tomorrow, it will be a razor-thin blue line instead of a red line.

Either way, the stair-stepping and bullish cup handle formation are being built for fiat US dollar gold.

Moving down to the gold price in fiat Australian dollar terms... Perhaps we can see why the bullion mints in Australia are reporting record sales and demand data this year. Over the past four to five years, a cup handle breakout has rewarded bullion stackers down under.

The gold price in fiat Canadian dollars, is a similar story, with a cup handle breakout in the last few years and the Royal Canadian Mint enjoying record demand for bullion in the past few years.

The price of gold in fiat Swiss francs is poised to break out. In terms of median wealth data, Swiss citizens are typically wealthy, and many are long term bullion stackers. Not a coincidence.

The fiat Chinese yuan remains poised for liftoff. Perhaps their lessening of lockdowns throughout the Chinese economy in 2023m will help spur a further price rally in gold yuan terms.

The fiat euro gold price is starting to run away and liftoff.

Similar story in the fiat British pound, not sterling. Debasement races higher and to the right.

Gold in fiat rupee terms seems to eventually price out many bullion stackers, moving them further into silver bullion and jewelry buying as this decade progresses.

And finally, in the land of the rising sun. The fiat Japanese yen is about to experience a mania in gold and a wrecking of record debt-level write-offs to come.

That is all for this week and year. 

Overall I remain very positive for precious metals next year, and hopefully in the many years to follow.

Have a safe and Happy New Year!

As always, to you out there, take great care of yourselves and those you love.

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James Anderson
James Anderson
Senior Market Analyst & Content

A bullion buyer years before the 2008 Global Financial Crisis, James Anderson is a grounded precious metals researcher, content creator, and physical investment grade bullion professional. He has authored several Gold & Silver Guides and has been featured on the History Channel, Zero Hedge, Gold-Eagle, Silver Seek, Value Walk and many more. You can pick up Jame's most recent, comprehensive 200+ Page book here at SD Bullion.

Given that repressed commodity values are now near 100-year low level valuations versus large US stocks, James remains convinced investors and savers should buy and maintain a prudent physical bullion position now, before more unfunded promises debase away in the coming decades...