Half of America’s banks are already insolvent – this is how a credit crunch begins

YahooFinance-The Telegraph/5-2-2023

“Almost half of America’s 4,800 banks have already burned through their capital buffers. They may not have to mark all losses to market under US accounting rules but that does not make them solvent. Somebody will take those losses. ‘It’s spooky. Thousands of banks are underwater,’ said Professor Amit Seru, a banking expert at Stanford University. “Let’s not pretend that this is just about Silicon Valley Bank and First Republic. A lot of the US banking system is potentially insolvent.”

USAGOLD note: Evans-Pritchard lays out a scenario considerably more distressing than the picture painted by the bulk of financial media..Some will find the numbers shocking, but it all points to a serious problem that could spin out of control. “The horrible truth,” he says, “is that the world’s superpower central bank has made such a mess of affairs that it has to pick between two poisons: either it capitulates on inflation; or it lets a banking crisis reach systemic proportions. It has chosen a banking crisis.”