The second-largest banking collapse in American history hit on March 10. In its wake the United States took a massive step toward more government control of the national economy—and control over the lives of every individual in the country.
The underlying cause of this banking crisis—and others, past and future—will lead to the financial and physical destruction of the nation.
On March 10, Silicon Valley Bank failed and was taken over by the U.S. government. Two days later, Signature Bank failed. First Republic Bank shares fell 75 percent and was later bailed out by a consortium of big banks. Western Alliance Bank shares fell by 80 percent, and PacWest by 50 percent.
The government had been keeping interest rates low and creating new money through quantitative easing. This flood of money pushed up asset prices and encouraged people to stop saving and to buy and invest in just about anything.
Silicon Valley Bank specialized in dealing with tech companies. Over the past couple of years, cash flooded into their accounts. What to do with the money?
They believed these conditions would last forever. Even as inflation took off, U.S. government officials said it was “transitory.” So bank officials invested these funds in U.S. Treasuries and mortgage-backed securities. These are historically safe investments—as long as interest rates don’t rise sharply.
Then interest rates rose sharply. “Transitory” was a lie. The problem was obvious and growing worse. Regulators could have and should have stepped in. This is where the story gets darker.
Republican Congressman James Comer, chairman of the House Committee on Oversight and Accountability, called svb “one of the most woke banks” in America.
The bank had a “safe space catch-up” where employees could share their coming-out stories, sent its personnel to serve on lgbt panels, and boasted about finding ways to put more homosexuals and racial minorities in senior positions. The bank aimed to be carbon neutral by 2025 and promised at least $5 billion in loans and investments to climate-change measures.
The bank spent nine months without a chief risk operator. Shortly before that vacancy opened, it boasted, “We have a chief Diversity, Equity and Inclusion [dei] officer, an executive-led dei Steering Committee and Employee Resource Groups with executive sponsors focused on these objectives.”
Only one member of svb’s board had experience in the finance industry: Tom King, former ceo of investment banking at Barclays. On its board of directors were minor Clinton donors and Democrat Mary J. Miller, a former Treasury official who ran for mayor of Baltimore, Maryland, in 2020.
Executives at Signature Bank appear to share similar ideologies. They are the ones who famously shut down the account of Donald Trump.
Did svb executives get away with it because they shared the ideology of the radical leftists currently in power? Did they learn the same lesson as Sam Bankman-Fried and the other leaders at ftx—that if you help empower a certain political party, you can get away with anything?
A Banking Revolution
The U.S. government guarantees bank deposits up to $250,000. If a bank fails, the Federal Deposit Insurance Corp. (fdic) will reimburse you.
But many svb clients were tech companies and other businesses with far more than this amount in their accounts. When they heard of potential trouble, they raced to get their money out. Clients at smaller banks began moving their funds too, just in case.
So Joe Biden’s regime made a dramatic decision: The federal government will make sure that no matter how much money you put into this private bank that was insured only up to $250,000, you will get all of it back. He boasted that no taxpayer funds will be used for this, but the funds come from money the banks pay the government. As the Wall Street Journal wrote: “Bank customers with less than $250,000 in deposits will indirectly pay for this through higher bank fees. In other words, this is an income transfer from average Americans to deep-pocketed investors.”
A former assistant secretary of the Treasury said this decision is “absolutely profound” and a “breathtaking step.” He told cnn that we are now much closer to “nationalizing the banking system.”
No one voted for this, and it was barely debated. The leftists in power have used this emergency to grab enormous control over the American banking system.
On top of grabbing control of banks and their depositors, this overreach incentivizes risky behavior.
When businesses set up their bank accounts they knew how much of their deposits were guaranteed and how much weren’t. They could put their money in a safe bank and earn less interest—or somewhere riskier and get a higher return.
But if all your deposits are guaranteed, the logical thing to do is to invest in whatever bank will give the highest returns—no matter the risk. You can reap the rewards, and if things go wrong, the government will use other taxpayers’ money, directly or indirectly, to pay you back.
The only way to make this de facto bank nationalization work is through a lot more regulation. Otherwise, banks compete to engage in higher-risk, potentially higher-reward behaviors, knowing that if anything goes wrong, Uncle Sam has their back. This would guarantee a crash.
Then there is the alarming issue of government control over the banking system. What would the Biden administration do with that power? Already they want to know about the $600 you sent to a friend to cover a shared hotel room. They want to hire nearly 100,000 new agents for the Internal Revenue Service under the command of the same official who helped the irs go after conservatives when Barack Obama was in office. The way these people would use their power over private banking is frightening to consider.
This decision may also lead to a massive crisis. The U.S. government ($31 trillion in debt) is implying that it will pay for every single lost deposit in the U.S. banking system. It can get away with this when times are good. But when another major crisis strikes, this can turn a disaster into an irreparable catastrophe.
What is especially dangerous is that this new U.S. government banking policy is implied by the government’s actions, but not officially defined. This is exactly what caused the euro crisis in 2008. Investors believed Germany would bail out Greece. That obligation was never stated, but was believed to be implied by Greece’s membership in the eurozone. When people realized this assumption was false, confidence in Greece collapsed and the economies of southern Europe imploded. The U.S. could be in for a similar structural failure. Investors may now believe the U.S. government stands behind all U.S. banks and make risky decisions accordingly in pursuit of profits. When the next big bank fails, top federal officials may be unable—or, if the bank executives and depositors do not share their ideology, unwilling—to help. Should that occur, people will realize their presuppositions were wrong, their supposedly safe investments are actually unsound, and everyone will stampede for the exit.
Biden officials may have stabilized the system for now. But they have grabbed more power for the central government—and more leverage over anyone in America who uses money. And they have further undermined the foundations of the economy, ensuring that the next crisis will be far worse.
But those foundations of the American economy are already crumbling. They rest on the unsteady sands of greed and theft. The Bible condemns this widespread corruption.
One core biblical passage guiding the Trumpet’s analysis right now comes from Amos, an end-time book for the people descended from ancient Israel, most notably America. The Anchor Bible Dictionary states, “Amos decried the social injustice, the oppression of the poor, and the lack of any moral or ethical values on the part of the rich and powerful. According to Amos, the spokesman of [God], Israel was a violent, oppressive and exploitative society. The poor had to sell themselves into slavery to pay off trivial debts (Amos 2:6; 8:6). The rich falsified weights and measures (Amos 8:5) and traded dishonestly (verse 6). Even the courts, the last bastion of hope for the poor, were corrupt. Judges were bribed to cheat the poor out of what little they had (Amos 2:7; 5:10, 12). In fact, Israel was no longer capable of acting with justice (Amos 3:10; cf. 5:7, 24; 6:12). Truth and honesty were now hated (Amos 5:10).”
With ftx and now svb, how many of America’s financial problems stem directly from this kind of corruption?
The turmoil in America’s finances tie into another key prophecy. Herbert W. Armstrong wrote in 1984 that a massive 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.”
Financial mismanagement and corruption are causing the wealthiest nation in world history to inflict upon itself its own, long prophesied, economic destruction. But its people won’t be the only ones hurt. The fallout of this collapse will quickly spread to Europe.
svb’s collapse shows clearly how this can happen. When it fell, shares in Credit Suisse, Switzerland’s second-largest bank, plunged 30 percent to a record low. There is no direct connection between Credit Suisse and svb. People just know the Swiss bank is weak, and any talk of trouble in the banking system makes depositors nervous.
Many banks in Germany have made less-than-ideal investments to prop up the German economy. If things get worse in America, these banks could topple like dominoes. The problems that caused the euro crisis were never really fixed. Other governments, like Italy, also have vulnerable banks and no cash with which to bail them out.
The Swiss central bank stabilized the situation with a $54 billion lifeline. But if it keeps worsening, even the Swiss government may not have enough money to keep up. Fears of its collapse are worrying the whole European market.
And that’s not the only thing they’re worried about. America’s unusual response to svb’s collapse took Europe by surprise. The Financial Times explained, “Europe’s financial regulators are furious at the handling of the Silicon Valley Bank collapse, privately accusing U.S. authorities of tearing up a rule book for failed banks that they had helped to write” (March 16).
This is easy to understand. If you’re a big business, where will you now put your cash? Bank of America, where, if something goes wrong, you’ll get it all back—or Deutsche Bank, where you won’t? Choosing a bank is far more complicated than that, but this development clearly puts pressure on European countries to follow America’s lead or lose out.
But many European countries can’t follow that lead. No one would trust Italy’s guarantee of all its banks. Even a French guarantee would be suspect. The only way for Europe to do what America just did would be to unify its banking system and back all its banks jointly. But Germany has fought hard to prevent German taxpayers from having to bail out Italian banks. The whole debate is toxic.
America’s tottering financial system is causing a lot of Europeans a lot of problems. If the U.S. goes into a major crisis, it will drag Europe in after it—and Europeans will react.
Revelation 17 forecasts the rise of a “beast” power, or empire, led by a woman, or church in biblical symbolism. This can only be referring to a European power, which has risen numerous times throughout history. In our day it will be a union of “ten kings” (verse 12) who shall “have one mind, and shall give their power and strength unto the beast” (verse 13).
“What will cause these nations to unite so forcefully?” asks Trumpet editor in chief Gerald Flurry. “It is very difficult to unite nations into ‘one mind’! That’s an incredibly challenging undertaking. … Mr. Armstrong had profound insight in specifically forecasting that the catalyst for this dramatic unification would be a massive financial crisis that starts in America and ripples out from there. Look at conditions in America and the world today, and it is not difficult to see just how right he was! …
“Watch the economic situation in America closely, and its effect on Europe—and see if this dramatic prophecy from Mr. Armstrong doesn’t come to pass just as he said it would!” (Trumpet, May-June 2015).
This financial crisis will eventually cause Europe to unite and turn dramatically against America. In the meantime, Europeans have more and more motivation to distance themselves from the United States and to build their own economic system.
Ultimately it’s this new economic system that will have the biggest impact on depositors from New York to New Zealand and from Argentina to Amsterdam. It will fuel the rise of a new, European superpower that will shake the world.