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Silicon Valley Bank Collapse: Just How Safe Is The Banking System?

March 16, 2023

Bank runs, Fed policy and Gold.

On Wednesday, March 8, 2023, Silicon Valley Bank (SVB) announced a $ 1.8B loss from the sale of investment securities.

Investors and depositors got spooked, withdrawing an estimated $42B+ in cash within a few hours–approx 25% of total SVB deposits, leaving a negative cash balance of $1B by Friday, March 10.

SVB was well known for its links to the Venture Capital (VC) and the Tech industry, with $209B in assets under management (AUM). It failed and went into receivership under the Federal Deposit Insurance Corporation (FDIC). SVB was the 16th-largest bank in the United States and was the largest bank by deposits in Silicon Valley.

On Sunday, the contagion out West hit the New York based Signature Bank, which also failed by bank run. The Treasury Department, Federal Reserve (FED) and the FDIC stepped in to calm the waters…

Matthew Piepenburg, Commercial Director at Matterhorn Asset Management, joins Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News, to discuss the ongoing Silicon Valley Bank collapse, and what it means for markets, gold, and Fed policy. Topics cover inflation, gold price, de-dollarization, Central Bank Digital Currencies and risk.

Despite years of central bank support and headline-making bailouts, private commercial banks face a myriad of operational and structural risks. MAM had already warned us of such banking risks well before the current crisis made headlines.

Gold Switzerland

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Matt began his finance career as a transactional attorney before launching his first hedge fund during the NASDAQ bubble of 1999-2001

Thereafter, he began investing his own and other HNW family funds into alternative investment vehicles while operating as a General Counsel, CIO and later Managing Director of a single and multi-family office. Matthew worked closely as well with Morgan Stanley’s hedge fund platform in building a multi-strat/multi-manager fund to better manage risk in a market backdrop of extreme central bank intervention/support. The conviction that precious metals provides the most reliable and longer-term protection against potential systemic risk led Matt to join VON GREYERZ.

The author of the Amazon No#1 Release, Rigged to Fail, Matt is fluent in French, German and English; he is a graduate of Brown (BA), Harvard (MA) and the University of Michigan (JD). His widely respected reports on macro conditions and the changing behaviour of risk assets are published regularly at SignalsMatter.com.