The banking crisis: over, or still simmering?
Silicon Valley Bank has collapsed, and Credit Suisse was forced into a merger. After significant losses, Deutsche Bank’s share price has stabilized today—Friday looked very different. Does that mean the world is back in order? By no means, in our view. Because as interest rates rise, loan defaults rise as well.
For the time being, governments and central banks in the US and Europe are reassuring investors and savers with words and money. The latter in particular has been a popular cure-all since the 2008 financial crisis. Because when deposits are at risk, liquidity is the only way to restore confidence.
The chart below illustrates that there were extensive liquidity programs in 2008, during the 2020 COVID lockdown, and also in the case of Silicon Valley Bank. Do these have anything to do with how severe each crisis is? What is certain, in any case, is that liquidity programs have never before been launched so quickly on such a large scale as they are right now. In total, their volume has now reached a record $160 billion.
It may be that the biggest banking shock has calmed down due to the latest measures. However, the entire system remains unstable. According to financial expert Sandra Navidi on wallstreet:online TV, 200 US banks are currently at risk because they are sitting on $2 trillion in unrealized losses. In addition, there are unregulated shadow banks of various sizes in the US, whose lack of transparency can conceal further risks. It is therefore essential to consider secure investment options.
You guessed it: commodities are a good way for investors to minimize the risks of the financial market. If you buy technology metals and rare earths, you are entering into a pure commodity transaction and thus avoiding the risks of speculation on the stock market. In addition, attractive returns can be generated, including tax-free purchases and tax-free profits after a holding period of one year.