The United States financial system has been rattled by the collapse of Silicon Valley Bank (SBV) and Silvergate Bank within 48 hours as economic uncertainty prevails. Therefore, some financial sector players project that the situation will likely worsen in the coming days.
In particular, Robert Kiyosaki, the author of the best-selling personal finance book “Rich Dad Poor Dad,” has warned that a third lender will likely follow suit. He stressed that the situation would positively impact precious metals in a tweet on March 10.
According to Kiyosaki, his prediction aligns with a 2008 forecast of the collapse of the Lehman Brothers. Notably, the failure deepened the 2008 financial crisis, and the incident was considered a defining moment.
“Two Major Banks have crashed. #3 set to go. BUY real gold and silver coins now. No ETFs. When Bank #3 goes gold & silver rocket up. 2008 I forecasted collapse of Lehman days before it crashed on CNN. If you want proof go to RICH DAD .com,” he said.
Concerns around Credit Suisse’s future
Kiyosaki’s warning about a third bank collapse comes as speculation around the future of another crypto-friendly investment bank, Credit Suisse, continues to mount. This is after the bank announced a delay in the annual report after the Securities Exchange Commission (SEC) call regarding the lender’s cash flow statements for 2019 and 2020.
As reported by Finbold, Kiyosaki has projected a broader global economic collapse while noting that bank runs might accelerate amid the crisis.
As uncertainty prevails, economist and crypto-skeptic Peter Schiff has stated that the U.S. banking system is on the verge of experiencing a “much bigger collapse” compared to the 2008 crisis. On March 10, Schiff cautioned that mass withdrawals would trigger failures.
“The U.S. banking system is on the verge of a much bigger collapse than 2008. Banks own long-term paper at extremely low-interest rates. They can’t compete with short-term Treasuries. Mass withdrawals from depositors seeking higher yields will result in a wave of bank failures,” he said.
Crisis in the banking space
The concerns in the banking space were triggered by the collapse of Silvergate Bank, a lender primarily focused on working with cryptocurrency entities. According to the bank, the decision was reached “in light of recent industry and regulatory developments.”
Consequently, the collapse has translated into a crypto market meltdown, leading to significant capital outflow from the sector. At the same time, the meltdown saw Bitcoin (BTC) drop to lows witnessed amid last year’s bear market.
On the other hand, Silicon Valley Bank, the 16th-largest lender in America, shut down and was taken over by regulators. The bank also had exposure to crypto companies and Silicon Valley firms, especially technology start-ups.
The closure has also spread over to the crypto market after Circle, the issuer of the USDC stablecoin, revealed that part of its reserves was held at SBV. By press time, USDC had depegged from the dollar to stand at $0.91.
Featured image via Kitco YouTube
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