6 things you NEED to know about the Silicon Valley Bank collapse

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Silicon Valley Bank's collapse is sparking traumatic memories of the 2008 financial crash. Should we be worried SVB is signaling a similar economic catastrophe, or is everyone overreacting to the media's hype? Glenn told his listeners to be "healthily terrified." This event is sure to have ripple effects throughout the economy, but the more you are informed about it, the more you can prepare. Here are 6 things you need to know about Silicon Valley Bank's crash—explained in simple words.

1. The short answer to what happened: SVB didn't have enough money to pay its depositors.

Remember the scene from It's a Wonderful Life when all of the residents make a run on George Bailey's bank demanding their money? Fortunately for them, their money was in the altruistic hands of George Bailey, who used his honeymoon savings to give the depositors the money they demanded.

Silicon Valley Bank's depositors weren't so lucky.

In short, the depositors made a run on Silicon Valley Bank, demanding the withdrawal of their money. But SVB simply didn't have the liquid money available to give their depositors, causing regulators to shut down the bank shortly afterward.

2. It all started with COVID...

Why didn't SVB have enough money for its depositors? To explain this, we have to go back to the pandemic era.

The pandemic saw a rapid decrease in spending and a massive increase in bank deposits. Due to the uncertainty of the future and lockdowns limiting ways to spend money on recreational activities, like restaurants, bars, and other outlets, many Americans stocked up money in their accounts. In fact, SVB's deposits doubled in 2021 alone, bringing in more money than they could lend out to their clients.

To make a return on their available cash, SVB wanted to invest it, as many banks do. Since they had reached their lending limit, they decided to invest it in U.S. Treasury Securities, which are the government's means of funding itself without using taxation (in a nutshell). These are considered "ultra-safe" investments because they are backed by the "full faith and credit of the federal government."

Unlike other forms of investments, investing in Treasuries means the government will do everything within its legal power to pay back the money used to fund itself. In other words, it is typically very safe... so what happened?

3. Then came the magic cocktail—record-high inflation and rising interest rates...

Interest rates ruined the typically "ultra-safe" investment. Due to 40-year record-high inflation, the Fed lifted rates eight times by a total of 4.25 percentage points in 2022, raising interest rates from 0.25 percent to 4.375 percent. This means the value of U.S. Treasuries investments plummeted rapidly. SVB reported that it lost $1.8 billion due to the decreased value of its Treasuries investments after a year of rising interest rates.

This raises the following question: why didn't SVB just weather the storm and wait for interest rates to decrease? There are two issues with this. The first is that, with so many of their assets held up in Treasuries investments, SVB still wouldn't have enough liquid assets to give their depositors during the bank run.

The second issue is that Treasuries investments have a ten-year limit. In 2021 during the Trump administration, interest rates were at an all-time low of 0.125 percent.

The record-fast increase of interest rates in 2022 caused very little chance for rates to go back down to their historic 2021 lows within ten years for banks to make their money back on their investments.

To avoid this, SVB planned to sell their investments at a loss and re-purchase Treasuries investments at the decreased value, giving them an extra ten years to bet on decreased interest rates in the future.

But people caught on to SVB's plan and didn't want to ride with the risk.

4. Account holders withdrew their money... FAST.

As aforementioned, SVP lost $1.8 billion when it sold its depleted Treasuries investments. While they were betting on being able to re-purchase the devalued securities, hoping that they would go up in value in the future with lowered interest rates, investors were worried about the risk.

Once they made the announcement of their $1.8 billion loss, their stocks began to drop, and venture capitalists warned the companies they invest in to pull out of SVB. This had a snowball effect, leading to a "bank run" of depositors demanding to withdraw their money from their SVB accounts.

This led to the perfect storm: SVB's investment losses coupled with the influx of withdrawals were so immense that regulators had to step in and shut the bank down to protect depositors. The government currently "running" SVB, for all practical purposes, is the Federal Deposit Insurance Corporation (FDIC). The FDIC closed SVB on Friday and reopened the bank on Monday, March 13th as the Deposit Insurance Bank of Santa Clara.

5. Some people may lose their money. 

Banks insure accounts with $250,000 or less with FDIC insurance. That means, in cases of bank failure, exactly like this one, the FDIC covers all accounts less than $250,000. The FDIC said SVB customers who had less than $250,000 in their accounts will have access to all of their money when the bank reopens. Since it reopened this week, they should have access to their funds.

However, many of SVB's depositors had more than $250,000 in their accounts—it is Silicon Valley after all. Therefore, their accounts were not covered by FDIC insurance. Will they get their money back? There is a chance that they will not.

It is unclear how much SVB currently has to cover uninsured deposits. It is likely not enough. The FDIC has issued a "Receiver's Certificate" to the uninsured account holders with the amount in their account that is not covered by FDIC insurance.

The FDIC said it will pay some of the uninsured deposits by next week by liquidating any additional assets held by SVB. However, if the liquidated assets are not enough, many of SVB's uninsured account holders could lose their money for good.

6. Is this 2008 all over again?

SVB's collapse was the largest bank failure since 2008, when Washington Mutual failed with $307 billion in assets. Its failure, along with the collapse of the Lehman Brother's investment bank, triggered the worst financial crisis since the Great Depression. Are we in danger of repeating 2008?

Some argue that we are not in danger of another economic catastrophe, simply because SVB holds less than 1 percent of the nation's assets. However, as Glenn warns, there is a danger of banks repeating the same mistakes as SVP.

SVP wasn't the only bank to use its surplus deposits to invest in U.S. Treasuries, which means that other banks are wrestling with the depleted value of their securities investments due to rising interest rates.

Bank of America, for example, lost $109 billion in their securities investments due to rising interest rates, the most among its peers—and Bank of America is no small fish in the ocean of assets.

Other major banks recorded other massive losses in their securities investments due to rising interest rates. JP Morgan Chase lost $36 billion, Wells Fargo lost $41 billion, Citigroup lost $25 billion, and Goldman Sachs lost $1 billion. If the little banks collapse, will they get the same effort and attention from the federal government as the "big guys?"

The critic may argue that these are still small values given the incredibly large amount of assets held in banks nationwide. However, this is missing the point. Major banks have majorly invested in securities since the pandemic-era skyrocketing rate of deposits. Now those investments are depleted in value.

They can either sell those investments at a loss, or they can wait and hope that they will recover over time. However, if those investments are no longer liquid, what happens when their depositors come knocking? Will they have enough liquid assets to cover a massive bank run? These are the lingering questions that our banks need to address.

As Glenn says, this will impact you—it is only a matter of time. What will you do to prepare?

TOP 5 takeaways from JD Vance's 'Face the Nation' interview

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After an eventful first week in office, JD Vance wrapped the week up with a bang of an interview on "Face the Nation."

Last weekend, Vice President Vance joined "Face the Nation" host Margaret Brennan, who drilled Vance on everything from the economy to immigration. Vance clapped back with polite yet cutting responses, and he defended Trump against some of her more accusatory queries.

If there was any lingering doubt that JD Vance wasn't vice presidential (or presidential) material, they have just been blown away. Here are the major takeaways from his electricinterview on Sunday:

1. J.D. Vance defends Trump's cabinet picks

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Brennan opened the interview with a barrage of questions that brought up concerns surrounding some of Trump's cabinet picks, specifically Pete Hegseth and Tulsi Gabbard.

Brennan began by questioning how effective Pete Hegseth could be as Secretary of Defence, given that he was confirmed with a tie in the Senate that VP Vance broke. Vance responded with a quick breakdown of all of the issues the military is currently facing. Vance argued that Hegseth's unpopularity in the Senate results from his being a disruptor.

Brennan also attacked Tulsi Gabbard, calling her unfit for the title of "Director of National Intelligence." Vance defended Gabbard, citing her formidable resume and strong character. Vance also discussed the corruption of our intelligence services, which out-of-control bureaucrats have weaponized against the interests of the American people. He expressed his belief that Gabbard would be the right person to reign in the corruption and return the National Intelligence Service to its intended purpose.

2. J.D. Vance explains how Trump's economic policies will lower consumer prices

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Brennan pushed Vance on the economy, specifically questioning when prices for consumer goods would begin to fall. Vance explained that within the plethora of executive orders issued by Trump during his first week in office, many were aimed at bringing more jobs back into America, which will raise wages and lower prices. Other orders will boost energy production, which will reduce energy costs and decrease the costs of goods.

3. J.D. Vance sheds light on needed FEMA reforms

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Brennan drilled Vance on President Trump's proposed FEMA reforms, specifically regarding Trump's suggestion to send states a percentage of federal disaster relief funds so that they can quickly distribute aid rather than wait on federal action. While Brennen argued that FEMA has specialists and resources that states would not have access to, leaving people without aid, Vance argued that recent disasters, like Hurricane Helene, have proven that FEMA's current bureaucratic red tape deprived Americans of immediate aid when they needed it most.

4. J.D. Vance defends Trump's mass deportations

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Vance defended Trump's decision to allow ICE to conduct raids into churches and schools against Brennen's criticisms, arguing that law enforcement should remove a dangerous criminal from a school or church, regardless of their immigration status. He also advocated for Trump's proposed changes to birthright citizenship to prevent illegal immigrants from abusing the constitutional amendment by having "anchor babies" on U.S. soil.

Vance also took a hard stance supporting Trump suspension of admitting Afghan refugees. Brennan argued that Afghan refugees were going through a thorough vetting process and were now being abandoned by the U.S. However, Vance cited the foiled terrorist attack in Oklahoma City during Trump's 2024 campaign that was orchestrated by an Afghan refugee, who was allegedly vetted by federal agents. The vetting process is clearly flawed, and it was a prudent decision to halt the admission of these refugees until further notice.

5. J.D. Vance insists that Trump will still reign in Big Tech

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To wrap up the interview, Brennan questioned the Trump administration's stance on Big Tech given the attendance of the industry's biggest names at Trump's inauguration, including Meta CEO Mark Zuckerberg, Amazon CEO Jeff Bezos, Google CEO Sundar Pichai, Apple CEO Tim Cook, and TikTok CEO Shou Zi Chew. Vance assured Brennan that Trump is still resolved to curb the power and influence of Big Tech.

Top THREE reasons the U.S. NEEDS Greenland

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Are Trump's repeated promises to claim Greenland for the U.S. just belligerent imperialism or a deft move to secure the future of America?

During his patriotic inaugural address, President Trump reiterated his campaign promise to expand American territories, including securing U.S. control over Greenland. This is not a new idea despite what the mainstream media may claim.

The idea of buying Greenland was originally introduced by progressive hero Woodrow Wilson in 1917 as an attempt to secure the homeland as America was gearing up to enter the First World War. The second attempt came after World War II when President Truman tried to buy the island from Denmark in another attempt to shore up national security, this time against the Soviets. Since then, Trump floated the idea in 2019, which was met with much the same ridicule as now.

The truth is that the acquisition of Greenland represents far more than just an outlet for repressed imperialist desires. It would be one of America's best investments in a long time, which is why we've been eyeballing it for so long. Here are three reasons the U.S. needs Greenland:

Strategic Military Position

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For the majority of the 20th century, Europe was the region from which a foreign attack on American soil could be launched: the Germans for the first half of the century, and the Russians for the second half. On both occasions, Greenland stood between our foreign enemies and the United States.

After the World War II, America was the official military defender of Greenland, per an agreement with Denmark. Under this agreement, the U.S. built Pituffik Air Force Base, a remote base 750 miles north of the Arctic Circle. Due to its location, approximately halfway between D.C. and Moscow, the Pentagon still views Pituffik as a vital component of America's nuclear defense.

The U.S. also built a secret base within the ice cap known as Camp Century. Camp Century was part scientific outpost, part nuclear-tipped ballistic missile silo built in the ice to withstand a direct atomic strike. The nearly two miles of icy tunnels were powered by a nuclear reactor and were designed to survive a nuclear first strike, and return fire. Although abandoned in 1967, Camp Century still symbolizes the strategic importance of Greenland for U.S. security.

Untapped Resources

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While Greenland's population is a mere 56,000, the island has a total landmass nearly three times the size of Texas. According to a 2009 geological assessment, a whopping 30 percent of the Earth's undiscovered natural gas, and 13 percent of its undiscovered oil is locked away beneath Greenland's icy ground. There are also untapped deposits of valuable rare earth metals including copper, graphite, and lithium.

Neither Greenland nor Denmark have any real plans to tap into this immense wealth trapped beneath the ice, but it could prove crucial for ending the West's dependency on China. China has the global market cornered on rare earth minerals- including America. We acquire 72 percent of our rare earth mineral imports from China, making us entirely dependent on them for the manufacturing of many essential goods. Tapping Greenland's natural resources would help free America, and the West, from China's yolk.

Polar Silk Road

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In 2018 China launched an ambitious project that aimed to cut the travel time of cargo vessels between its ports and European markets in half. China, in collaboration with Russia, plans on developing new shipping routes through the Arctic Ocean. This bold new strategy, dubbed the "Polar Silk Road," has been made possible thanks to new tech, including a fleet of Russian, nuclear-powered icebreakers, the latest of which is capable of breaking through nearly 10 feet of ice.

With clear waterways from eastern China and Northern Europe, it won't be long before the first cargo ships brave the frigid sea and China looks to the next leg of the journey: the Northwest Passage. The Northwest Passage is the area of sea between Canada and the North Pole that would be an optimal shipping route between America's East Coast and Asia if it wasn't frozen over most of the year. But with new technology, we may be able to overcome the challenges of the ice and open the passage to commercial traffic, and Greenland is positioned directly on the passage's easternmost mouth.

Greenland would quickly become a key location along the Northwestern Passage, acting as a sentinel of the east, with the ability to control traffic through the trade route. If China or Russia were to take control of Greenland, they would dominate the Northwestern Passage, along with the rest of the new northern trade routes.

Is Romania squashing its own 'Trump' candidate?

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This week the streets of Bucharest, the capital of Romania, erupted in protest after the Constitutional Courts annulled the recent first round of the presidential election after the "far-right" candidate won.

The government is lying to you. If you have been listening to Glenn for a long time you already know that, and you also know that if you try to call attention to the lies you get labeled a conspiracy theorist or "far-right." This is not only true in America but across the world. Politicians cheat, steal, and grab power, then lie about all of it. This is the root of countless issues across every government on the planet, and recently Romania has become the latest example of this unfortunate phenomenon.

But what is really happening in Romania? Was this an actual attempt to stamp out someone who would shed light on lies and corruption? Or did the Romanian government put a stop to a genuine bad actor?

The Election

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On December 6th, 2024, the Romanian Constitutional Court canceled the second round of the presidential election amid claims of Russian interference. The second round of the election would have seen right-wing candidate, Calin Georgescu face off against pro-European centrist Elena Lasconi.

The trouble surrounds Georgescu, who stands accused of using Russian aid to run an unprecedented social media campaign that helped him win an election pollsters claimed he stood no chance of winning. Georgescu's rapid rise in popularity on social media does raise some eyebrows, and to add to the suspicion he declared he had zero campaign spending. On the other hand, Georgescu's supporters claim that his quick rise to stardom and underdog victory is due to the growing resentment for the ever-out-of-touch political elite.

Georgescu's Platform

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Georgescu rose to prominence on a platform many of his detractors have labeled "far-right," "pro-Russian," and "populist" (sound familiar?). His positions include supporting Romanian farmers, increasing Romanian self-reliance, and increasing local energy production. Georgescu has been lauded for his message of hope and vision for the future and his dedication to truth, freedom, and sovereignty.

Georgescu is also a vocal Christian and a supporter of the Romanian Orthodox Church. He has questioned the climate change and COVID-19 narrative as well as NATO and the war in Ukraine, which is how he earned his "Pro-Russian" monicker. Georgescu promised to respect and honor its obligations to the EU and NATO, but only to the extent that they respect Romania and its interests.

What Happens Next?

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After Georgescu's unexpected victory, the Romanian Constitutional Courts annulled the election's first round and scheduled it to restart on May 4th. As of now, it is unclear whether Georgescu will be allowed to participate in the new election. This act by the Constitutional Courts triggered mass protests in the capital, Bucharest, and has caused many Romainians to question the state of democracy within their country.

Many of the protesters are calling what happened a coup and are demanding the election be allowed to continue to the second round. They are also calling for the resignation of current President Klaus Iohannis, who has maintained power thanks to the incomplete elections. Georgescu has officially challenged the court's decision and even made a complaint to the European Court of Human Rights, but it is unclear if his appeal will make any difference.

The tides have turned — and now the very same banks that were pushing heavy-handed environmental, social, governance rules are running away from them.

In a significant victory, a federal judge in Texas has ruled that employers and asset managers cannot use environmental, social, and governance factors in employee retirement accounts. If this ruling holds up — which is likely, given the conservative composition of the appellate court — it will dramatically shift the balance of power between corporations and their employees.

This decision represents one of the most substantial blows to the ESG agenda to date. Companies that have been steering employees into ESG-focused investments, which prioritize progressive values over financial returns, now face legal repercussions. Continuing such practices would directly violate federal law. The ruling forces companies to re-evaluate their commitment to ESG initiatives, and many may withdraw from these funds before the case even reaches the appellate court.

Watching these corporations squirm as they try to backtrack and avoid legal repercussions is ever so satisfying.

The impact of this ruling could very well be the beginning of the end for the ESG movement as it’s been pushed by elites.

In even better news, BlackRock, a major player in the ESG movement, has officially left the United Nations’ International Association of Asset Managers. This is a direct rebuke of the global push for ESG initiatives and a major sign that the tide is turning. In contrast to the Glasgow Net Zero Conference in which the Global Financial Alliance for Net Zero — an organization championed by global elites — was pushing for ESG to be a central focus, BlackRock’s departure from the group signals that even those who were at the forefront of this movement are starting to distance themselves.

But it doesn't stop there. Every major U.S. bank has now announced that they too are leaving the U.N.’s Association of Net Zero ESG Bankers, another key part of the Glasgow Financial Alliance. For years, we’ve been warning that ESG in banking was one of the primary ways elites like Biden, the Davos crowd, and others were planning to reset the world’s economy.

The tides have turned — and now those very same banks are running away from ESG, a powerful signal of things to come. They know they’re on the losing side, and they’re scared that a new administration will come down hard on them for their involvement in these globalist initiatives.

In another win, the Consumer Financial Protection Bureau unveiled a shocking new rule that, if it survives, would prohibit many financial institutions from de-banking customers based on their political or religious views, or even certain types of speech. While the rule is not as comprehensive as we need it to be, it’s a step in the right direction — and it includes concerns raised by our allies about the dangers of ESG. The Trump administration has promised to come down even harder on the banks with tougher rules, and this is a very good start.

Watching these corporations squirm as they try to backtrack and avoid legal repercussions is ever so satisfying. Some are running for cover while others are desperately trying to ingratiate themselves with the powers that be. It’s clear that the backbone of these companies is made of rubber, not steel. They don’t really believe in the ESG values they preach — they’re just playing the game to get in bed with the political elites.

Now that Trump is back in town, these corporations are showing their true colors. They never cared about their customers or the values they forced upon them. It was always about the power they could acquire through catering to those in power at the time.

No company should be afraid of the president of the United States. But they’re not afraid of Donald Trump. They’re afraid of the return of the rule of law. They know that fascistic public-private partnerships between the government and corporations are on the way out. That’s a victory for freedom and a victory for the American people.

Editor's Note: This article was originally published on TheBlaze.com.