Edward Dowd, Founder of Phinance Technologies and former fund manager for BlackRock (the world's largest asset manager) believes we are in the contraction phases of a great economic crisis.

 

In light of soaring inflation, increased interest rates and out of control debt, Edward says that it is now time "to pay the bill, and the bill is in the form of defaults and bankruptcies", which ultimately affect tightening of credit and destabilization of the economy and banks.

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In addition, as unrealized bond losses increase with banks, Edward predicts there will be massive bank failures.

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These bond losses were what was behind some of the largest recent bank collapses in U.S. history. (Silicon Valley Bank, Signature Bank, and Silvergate Bank.) Silicon Valley Bank only insured its clients up to $250,000, even though over 90% of its bankers had over $250,000 deposited.

 

So, when word began to go viral on social media that they had invested heavily in bond markets (55%), and these bonds were losing money due to rapidly increasing interest rates, (which increased the bank's volatility) people began to panic and in one day their clients withdrew $42 billion in funds; collapsing the bank because they didn't have the capital to back up the withdraws.

 

These culminating factors are why Edward is predicting that by 2025 there will only be six major banks in the U.S. He predicates this by explaining that the M2 money supply growth rate (total volume of the currency held by the public at a particular point in time) went negative in November of 2022.

 

He said this has only happened five times since 1868. The last time this happened was in1930 during the Great Depression. In response to this he says,

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"Economic activity is going to grind to a halt."

 

Edward is not alone in his grave concern for the United States banking system.

 

The Wall Street Journal announced that 186 U.S. banks were in financial trouble.

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The WSJ said that if half of these bank's clients decided to withdraw their funds, these banks would not have sufficient funds to cover these withdrawals.

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According to the the FDIC, in 1977 there were 14,411 banks with 33,108 branches in the U.S. As of 2022, there were only 4,135 banks with 71,190 branches. This means while we have the appearances of more banks due to branches, in reality since 1977:

 

We've lost almost 75% of our U.S. banks.

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