Any claim that the financial system is in a state of decay will likely be met by ridicule at worst and disbelief with a skeptical demand for justification at best. The US financial system, long-standing and robust as it has been for most of the last century, has proven that it's capable of withstanding any economic, political, or geopolitical storm. That's the assumption, at least.
Yet things are changing, and the cracks on the wall are becoming more evident. Though much of it remains unseen by the general public, the clues are evident; hidden in plain sight for those who know how to read them. Here's our take on the matter; our timeline counting down the disintegration of a crumbling edifice. We'll state the events and how we see them starting from July of last year. You be the judge.
1 - On July 9, 2021, President Biden Signed an Executive Order Accelerating "Open Banking"
This executive order allows banks, and depositors, to access and transmit their bank data more easily and efficiently. Within the executive order is a provision that encourages the Consumer Protection Financial Bureau to issue specific Dodd-Frank regulations that allow customers to access their bank data with ease and transmit that data to other financial institutions and third-party apps PayPal and Venmo, among others.
What's the problem? Sure, this can make the banking landscape more competitive. And while banks are no longer the "gatekeepers" of your financial data, as you now have a more comprehensive degree of choice, your data runs multiple cybersecurity threats as part of this "open" landscape. "Screen scraping" (aka, data scraping) is one common window to multiple potential attacks.
What this means for you: Your financial data is more vulnerable to cyberattacks now than ever before. Although financial institutions do everything they can to keep your data safe, experience has shown that cyberattacks will, at times, be several steps ahead of an industry's cybersecurity protocols.
2 - On August 10, Fitch Ratings published a warning that US banks face the risk of a "systemic cyberattack."
The report essentially says that a massive cyberattack cost a lot more than mitigating the attack itself or recovering stolen digital assets. Compare it to your home's security system. Not only do you have to change the locks, but you may also have to overhaul the entire system.
The problem? A systemic cyberattack would seriously compromise any financial institution's operational and capital capacity. This includes data restoration costs, cybersecurity infrastructure upgrades, brand damage and service, legal and regulatory fees on an enterprise level.
What this means for you: Depending on the severity of the attack, often unpredictable, financial institutions may face long-term damages that can impact their bottom line as well as your own financial data security. Most financial institutions have survived attacks; some barely. But as cyberspace gets more exposed, somehow, cybercriminals who prey on vulnerable systems seem to be getting brighter, bolder, and more devastating at every turn.
3 - On September 27, President Biden nominates a socialist to the Office of the Comptroller of the Currency
It was a nomination doomed to fail as no Republican or Democrat in their right mind would have supported a nominee whose very principles are in direct contradiction to her office.
What's the problem? Omarova is a radical anti-capitalist whose writings indirectly herald the destruction of the US banking system. Senator Toomey describes Omarova as having an "aversion to anything like free-market capitalism." He continues, "I don't think I've ever seen a more radical choice for any regulatory spot in our federal government."
Omarova also supported the radical idea that Americans have a bank account with the Federal Reserve. We're not a big fan of the banking system either, but such a move would completely decimate the commercial end of the banking industry. More importantly, your financial data and privacy would now be subject to Big Government's gaze. They would know everything about your transactional activities, spending preferences, earnings, and lifestyle.
What does her (failed) nomination mean? True, it didn't get far off the ground. But it's a sign that the progressive end of the Democratic party is getting bolder in pushing its agenda. And under the current administration, there's no guarantee that a similar Big Government win won't happen the next time around.
4 - On October 29, federal regulators discovered a "notable weakness" that may prevent the FDIC from insuring your funds
The Office of Inspector General (OIG) came out with a report warning that the FDIC may not insure customer deposits in the event of a cyberattack.
What's the problem? The FDIC is the only federal agency to insure up to $250,000 of your funds held in a bank account. Should it be subjected to an effective cyberattack, insurance goes out the window.
As page 4 of the OIG report states:
"Without effective controls for safeguarding its information systems and data, the FDIC would be at increased risk of a cyberattack that could disrupt critical operations and allow inappropriate access to, and disclosure, modification, or destruction of, sensitive information. Such an attack could threaten the FDIC's ability to accomplish its mission of ensuring the safety and soundness of institutions and maintaining stability and public confidence in our Nation's financial system."
What does it mean for you? It means that YOUR MONEY IS AT RISK! No matter how effective the cybersecurity measures they take, there will always be hackers capable of breaching the firewall. One strong attack in a moment of weakness can cripple the FDIC, and with it, the safety of your funds.
5 - On November 26, Fed Chair Jerome Powell announced that your bank data would be shared with global authorities
The Federal Reserve entered a strategic partnership with the Bank of International Settlements' Innovation Hub to produce digital banking solutions for the general public.
What's the problem? On the positive side, digital banking solutions may get a boost from this partnership. On the more problematic side of things—if you fear a federal takeover of the private and commercial banking industry, then how do you feel about a global "takeover" (both literal and proverbial) of personal, commercial, and federal banking operations?
What does it mean for you? Global institutions can easily access and surveil your financial accounts; financial privacy will virtually be non-existent. Imagine the digital risks of porting your data over to an international authority? What's to regulate and hold accountable the federal and global surveillance of your financial data? Aside from this, what might such a move spell for the commercial banking industry; how relevant would it still be once a much bigger "authority" takes over?
6 - On December 9, a 10-country financial cyberattack simulation predicted global Bank Runs, Bank Holidays and Dollar Decoupling
Israel led a financial cyberattack "wargame." The participants included representatives from the US, UK, UAE, Austria, Switzerland, Germany, Italy, the Netherlands, Thailand, the World Bank, and the Bank of International Settlements. The purpose of this wargame was to try to simulate what might happen in the event of a massive cyberattack targeting the various countries' financial systems.
What's the problem? Despite the various security measures and countermeasures the combined countries can muster, the outcome seemed consistent each time: countries will face bank runs, forcing them to enforce bank holidays. The cyber attackers were "10 steps ahead of the defender in each case."
What does it mean for you? Your bank may not have adequate "emergency liquidity" to withstand such an attack. Should a cyberattack trigger a bank run, you may not be able to access your funds. So, unless you're storing your own emergency liquidity in the form of cash or gold and silver coins, you may be out of luck in a disaster scenario.
7 - On December 16, the SEC proposed rules to prevent investors from fleeing money market funds during a financial crisis
Washington regulators floated requirements to prevent investors from literally "going to cash" during a financial crisis.
What's the problem? The SEC's rules aim to prevent you from accessing your cash when you really need it. In the event of a deep financial crisis, only cash and hard assets may be accepted as payment for goods and services. You cannot transact shares of a money market fund, stocks, or even gold or silver ETFs.
What does this mean for you? Federal regulators are looking to preserve the banking system at your expense. This puts you in a highly vulnerable situation; one that's neither fair nor ethically sound.
8 - On December 31, FDIC Chair resigns, warning of a Democratic "hostile takeover"
Jelena McWilliams, a Trump appointee, abruptly resigned as FDIC Chair following a dispute with Democrats leading the agency. McWilliams described it as a "hostile takeover."
What's the problem? Her resignation gives President Biden more control over the "independent" agency to advance his progressive agenda. His administration can take a more aggressive approach toward policing bank activity and implementing climate change-related requirements, among other items. Currently, Democrats constitute the majority of the board.
What does this mean for you? Your money's fate is now in the hands of a progressive administration that's inept at exercising fiscal responsibility. THE VERY AGENCY THAT'S SUPPOSED TO PROTECT YOUR MONEY IS NOW A SIGNIFICANT RISK FACTOR TO YOUR FINANCIAL STABILITY.
9 - On January 13, 2022, Lael Brainard may be confirmed as Vice-Chair of the Federal Reserve
With Richard Clarida's resignation as second in command at the Fed, Lael Brainard is likely to assume the Vice-Chair, making her the second most powerful official in the US Financial system.
What's the problem? Although the Fed itself is a problematic institution (a tool for the government to tax citizens indirectly via money printing), Brainard's political leanings situate here somewhere between "dove" and outright "socialist." As Politico states, "Brainard is significantly more progressive these days than Powell on using Fed tools to address issues like climate change and economic inequality."
What does this mean for you? Politics aside, this isn't a problem until you realize who's paying for it. The Fed holds a monopoly over all things monetary. Their power and influence exceed the US, spilling over to economies across the globe. With Brainard as second in command, elitist cronyism and fiscal and monetary irresponsibility now just gained a socialist cousin, shifting the balance of power even more toward the elite 1% and the risk of financial impoverishment and ruin toward 99% of all hard-working Americans.
See Lael refuse to say if she is a socialist or a capitalist at the 1:34:22 mark in the video below: