Half the world fears another 2008-style global crisis

Two banks failed in the United States within three days: Silicon Valley Bank (SVB) and Signature Bank both collapsed. Authorities and the US government reacted immediately; even the president spoke to prevent panic. Because banks are built on trust, a panic can have unforeseeable consequences for the entire banking system.

But how can a bank fail? Surely the money people deposit is sitting there? No, it is not. Banks are not charities; they want to earn money. They invest the capital entrusted to them. Trouble arises when circumstances change suddenly and substantially, investments do not perform as expected, and losses occur. This happened to Silicon Valley Bank, then the country's 16th-largest bank. Its money ran out and it tried to compensate, but customers recognised the problem and rushed to withdraw their funds, leading to collapse in two days. That is one reason banks dislike runs. One might claim this has no effect on Europe, but the European banking giant Credit Suisse has since requested a lifeline too.

The resulting panic sent the forint into freefall. The forint is extremely uncertain and weak, like other Central European currencies, and is among the first to suffer in a panic. That is why I always say that what you hold yourself is secure—but if you hold it, keep it in a form that preserves value. Gold prices rose in response to the uncertainty; gold remains valuable when trouble comes. People do not say “if you have gold, you always have money” for nothing.

Do not risk your savings—own gold!

Photo: Euronews