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Daily Missive

Seven Grey Swans a Swimmin’ in 2025: #6 Involves America’s Banks

Loading ...Addison Wiggin

December 24, 2024 • 4 minute, 7 second read


bank failuresdebt crisisInterest Ratesnational debt

Seven Grey Swans a Swimmin’ in 2025: #6 Involves America’s Banks

“You’re thinking of this place all wrong as if I had the money back in the safe. The money is not here. Your money is in Joe’s house, right next to yours. And in the Kennedy house, and Mrs. Macklin’s house, and a hundred others…”

–George Bailey (Jimmy Stewart), It’s a Wonderful Life


December 24, 2024— American life has gotten more complex since the 1946 holiday classic It’s a Wonderful Life.

Indeed, your small-town bank or savings and loan may primarily be in the business of 3-6-3 lending. That’s where a banker gives its depositors a 3% interest rate, lends out at 6%, pocketing the spread, and closes at 3 p.m. to hit the golf course.

But 21st-century America is far more complex. Banks engage in far riskier behavior. In 2023, for instance, we learned that banks could go bankrupt from investing in U.S. Treasury bonds.

Remember, by definition, U.S. Treasury bonds are considered the only truly “risk-free” investment.

But that’s clearly not the case. Rapidly rising interest rates in 2022 meant that longer-dated Treasury bonds dropped significantly to match those higher rates.

So when Silicon Valley Bank needed to sell its bonds for liquidity, it turned paper losses into real ones, kicking off the second, third, and fourth-largest bank failures in U.S. history.

The Fed stepped in, offering to buy those bonds at their par value. This is part of our next Grey Swan event…

Grey Swan #6: The Gradual “Nationalization” of America’s Banking System

We’re watching the slow-motion nationalization of our banking system.

From problem banks to presidential overreach.

From digital currencies to massive repo operations – I believe it all points to a government preparing to take total control of our financial lives.

But here’s the kicker – they won’t call it nationalization.

Oh no, they’re far too clever for that.

They’ll dress it up as “stability measures” or “consumer protection.” That’s what they did when they started overpaying for Treasury bonds from banks in 2023.

While that move kicked the can down the road, it left more risk on the Fed’s balance sheet at the expense of avoiding a bigger banking crisis.

When the banking system gets into a crisis, things can be changed on a dime. Contracts can be ripped up. And bankers will tell you it’s for your own good, that it’s necessary to prevent another financial crisis.

But make no mistake, once the government has its fingers in the banking pie, your financial freedom will never be the same.

Let’s take a moment to consider the broader implications of this financial power grab.

The U.S. dollar, long the world’s reserve currency, is under threat like never before.

Our national debt has exploded to over $36 trillion, more than triple what it was just 15 years ago.

And what’s the result of all this fiscal irresponsibility? Inflation.

We’re seeing a banking system that’s increasingly fragile, propped up by government interventions and easy money policies.

As Grey Swan Investment Fraternity contributor Mark Jeftovic notes:

Treasury yields seem to have gone the wrong direction after the Fed cut in September – and a half-point one at that. Here’s a visual depiction of the anomaly:

Turn Your Images On

It’s clear that the bond market doesn’t like what’s happening in the economy right now.

And it’s urgent you take measures to shield yourself from another crisis. That’s why we continue to like gold, for its long-term stability against inflation. And why bitcoin, which is far more volatile, could still make sense as a small part of your investment portfolio.

Going into 2025 and the possibility of a banking crisis, it’s important to ensure that you’re not overexposed to bank stocks. And that you keep your cash in the bank under the FDIC insurance maximum of $250,000.

We’re carefully watching the banking sector for signs of stress in the new year, especially as interest rates are adjusting to stay higher for longer.

Regards,


Addison Wiggin,
Grey Swan

P.S.  Panic hit the banking world in March 2023 when Silicon Valley Bank went belly-up after a catastrophic bank run. Like dominoes, Signature Bank toppled next, and Credit Suisse got scooped up by UBS in a fire sale. Regulators swooped in with emergency fixes to stop the financial world from melting down.

We were covering the event in real-time with live seminars. Our premise goes back to the days of It’s A Wonderful Life and Garet Garrett’s Anatomy of a Bubble in which he outlines the successive banking crises that followed the Roaring ‘20s and the aftermath of the stock market crash in 1929.

In a crisis, as we also saw in 2008, banks go first. The Fed’s balance sheet is negative now… so we’re keen to see what happens to banks after the current Wall Street fixation with Superchips finds its own pin.

Your thoughts on the top Grey Swan events of 2025 are welcome here: addison@greyswanfraternity.com.


A $14 Trillion Wall Street Firm Just Changed Everything for Ethereum

July 18, 2025 • Ian King

Some analysts have attributed this rally to renewed optimism around crypto ETFs or broader market momentum.

Others pointed to Ethereum’s surging activity across Layer‑2 networks, which act like express lanes built on top of Ethereum to make transactions faster and cheaper.

But I believe something else played a much bigger role in this week’s ETH rally.

And it came from Fidelity.

The 78-year-old financial giant, which manages over $14 trillion in assets, just published a report that backs up exactly what I said back in 2022.

According to Fidelity, Ethereum isn’t a tech investment.

It’s a sovereign digital economy.

A $14 Trillion Wall Street Firm Just Changed Everything for Ethereum
The Hidden Crack In the Labor Market

July 18, 2025 • Andrew Packer

The 8.87 million Americans holding second jobs likely fall into two groups. The first are those who work a second job by choice – the so-called “side gig.”

The second group? Those who are struggling economically.

The Hidden Crack In the Labor Market
How to Ruin a Business Without Really Trying

July 18, 2025 • Andrew Packer

It’s crucial as an investor to look at who you’re investing with. Someone with a good idea and integrity will help you grow your wealth far more than someone with a great idea but who has no integrity.

And why it’s important to keep some of your wealth in honest forms of money like gold and, yes, bitcoin.

And there’s another theme here as well: The truth. It always comes out. Not always on the jumbotron, or on the front page of a national newspaper. But if you always live your life under the assumption that anything you do will be headline news – or the darling of social media – you’ll focus on the positive ways that can turn out.

How to Ruin a Business Without Really Trying
A Week of Marvels

July 17, 2025 • Bill Bonner

First the marvels. We had thought the trade wars were happily resting in their graves. But last week, they rose up again…ghoulish and ghastly.

After the ‘reciprocal’ tariff program was abandoned, the administration’s top quack economist, Peter Navarro, had promised ‘90 deals in 90 days.’ And so, the trade negotiators went to work. But after three months, there were only three deals done. One of them was with the UK, with which we had a trade surplus…and the other two — with China and Vietnam — are fishy and probably won’t stick.

A Week of Marvels