U.S. Banking Crisis Is Worse Than 2008 Financial Crisis, Says Economist Peter St. Onge
It’s not finished yet, but according to economist Peter St. Onge, the present financial crisis is worse than the instability of around 15 years ago.
St. Onge claims in a new video that the banking industry’s damage has now exceeded the total value of all assets lost during the 2008 financial crisis.
St. Onge warns investors to prepare for more falls despite reassurances from the Federal Reserve. Fed Chair Jerome Powell assured the public that “the US banking system is sound and resilient,” yet only hours later, significant regional lender PacWest crashed almost 50% in the aftermarket.
This very strong and durable’ banking system of ours obviously has a lot more collapses in store for us after First Republic’s previous weekend.
Economists agree that the downfall of the First Republic and others is likely just the beginning. St. Onge, drawing parallels to the financial crisis of 2008, projects that hundreds more financial institutions would fail over the next year as the economy feels the effects of the Federal Reserve’s aggressive interest rate rises.
The early crashes are simply the beginning, the screaming precursor to a culling of banks on par with extinction level, as predicted by 2008.
A further 440 US financial institutions failed in the four years after the 2008 collapse of 25 US financial institutions. That’s an increase from two annual closures before the crisis to 110 annually. So we haven’t even seen the tip of the iceberg yet.
It usually takes 12-18 months for an interest rate rise to have a significant impact on the economy, and we’re only six months in. As a result, preparing for the 2008 crisis suggests the main storm won’t come until the next year. These winds signal the approach of a storm.