Eleven Big Banks Inject $30 Billion Into First Republic to Stop Contagion

After Silicon Valley Bank became the second-largest bank in United States history to collapse, contagion began spreading the through global financial markets. Just two days after Silicon Valley Bank’s failure, Signature Bank followed suit. Joe Biden assured Silicon Valley Bank and Signature Bank customers that the U.S. government would back up their deposits, but his assurances have not alleviated financial fears.

On March 15, the Swiss National Bank offered Credit Suisse a $54 billion lifeline to keep it solvent. Then, on March 16, 11 big banks created a $30 billion rescue package for the California-based First Republic Bank. This rescue package was designed to bolster confidence in the financial market, but many analysts fear that more banks will fall.

Falling dominoes: BlackRock ceo Larry Fink, head of the world’s largest asset management firm, asked in his annual letter to shareholders whether “the dominoes” are “starting to fall” in the U.S. financial system. He pointed to the failure of Silicon Valley Bank, surging inflation and the Federal Reserve’s aggressive rate hikes in the past year. Then he warned that “we’re already paying for years of easy money” and that “more seizures and shutdowns” may be coming.

The U.S. government only has $125 billion in its bank bailout fund. It would take only a few more bank failures for the contagion to spread to the U.S. government itself, which is already $31 trillion in debt and spending nearly $800 billion in interest on its national debt.

Signature prophecy: The late Herbert W. Armstrong predicted that a financial crisis in America would likely be the catalyst prompting Europe to unite. Specifically, he warned in 1984 that a banking crisis in America “could suddenly result in triggering European nations to unite as a new world power larger than either the Soviet Union or the U.S.” (co-worker letter, July 22, 1984). In other words, a banking crisis could destroy the global financial system, scare European nations into surrendering control to a central authority, and create a new world order wherein America is no longer the superpower.

To learn more about this dire possibility, read “When Will the Dollar Collapse?” and “How the Global Financial Crisis Will Produce Europe’s 10 Kings.”