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Ripple Effect

The Next Banking Crisis Is A Failure Away

Loading ...Addison Wiggin

May 23, 2025 • 58 second read


banking systemBanks

The Next Banking Crisis Is A Failure Away

Bond yields are soaring, with the benchmark 30-year U.S. Treasury bond hitting 5.15% this week.

With yields rising, bond holders are sitting on substantial losses. Perhaps the worst of those losses are in the banking sector.

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In total, U.S. banks are sitting on over $480 billion in unrealized losses.

Remember, it took a much smaller crack in the bond market to lead to the collapse of Silicon Valley Bank, the second-largest bank failure in U.S history.

As we noted in Grey Swan Live! yesterday, unrealized bond losses may have to be realized at an inopportune time. The Federal Reserve was able to paper over those losses last time quickly, but events could quickly run out of control.

~ Addison

 

P.S. We’ve released new research on today’s markets, and how President Trump is following through on a Great Reset of the U.S. economy. This first phase isn’t pretty – we call it the Great Fire. But it could still mean some big investment opportunities now. Click here for more details.

As always, your reader feedback is welcome: feedback@greyswanfraternity.com (We read all emails. Thanks in advance for your contribution.)


The “New” Contrarian Case for Bonds

December 3, 2025 • Addison Wiggin

During a Fed rate cut cycle, bond yields follow, which typically means bond prices tick higher. If you buy bonds now, you’ll be getting in ahead of the crowd.

And if this tech wreck shapes up anything like 2000-01, investors will want to get out fast. Despite the debt mess in Washington, bonds will again look “safe.”

One minor bonus: if you buy now, you’ll lock in higher yields before the next Fed rate cut, which is expected to come one week from today.

The “New” Contrarian Case for Bonds
American Life: Less Ordinary

December 2, 2025 • Bill Bonner

But Green is describing more than just a new calculation. He’s talking about a new form of misery.’ It’s a poverty where you may still have most of the accoutrements of middle-class life. But your relationship with the financial elite has changed: you are indentured to the credit industry — for life.

American Life: Less Ordinary
The Inflation Episodes – Act I

December 2, 2025 • Addison Wiggin

Historically, when the Fed has cut into inflation above 3%, one of two outcomes tends to follow:

A brief reprieve, followed by a larger inflation wave (see: 1970s).

A crisis born from cheap money rather than expensive money (see: housing in the 2000s).

We are heading into another round of cuts with:

• A still-bloated balance sheet

• A new digital plumbing that auto-funds the Treasury

• Hard-asset markets flashing warning lights

Paul Tudor Jones summed it up in one dry quip: interest expense is now one of Washington’s largest bills; commodities are “ridiculously under-owned”; and “all roads lead to inflation.”

The Fed’s flip from QT to easing doesn’t end this inflation episode. It likely begins its next season.

The Inflation Episodes – Act I
Looking For 10% Monthly Returns? Google It

December 2, 2025 • Addison Wiggin

The question investors should ask themselves isn’t whether this trend is sustainable – it isn’t.

Instead, they should ask if the $2 trillion increase in Google’s market cap has sucked capital away from other promising parts of the market – and if so, where investors can expect a rally when Google reverses.

Looking For 10% Monthly Returns? Google It