It's not making the headlines, but in the US something remarkable is taking place.

The US Banks are being "unleashed". A de-regulation frenzy is in the making.

- Banks will be allowed to reduce their equity capital (thus lowering their equity ratio).

- The growing segment of "shadow banking": Key word = Private Credit. = Large funds issuing credits to private companies, those funds receive credits from Banks that are used to further "leverage" their issued Private Credits. High risk piled upon high risk.

A fair weather concept, expected to last forever. But looking at recent history, the financial world reacts swiftly to any "bank-problems", even if it affects only local US Banks.

Some observers claim, that this is the recipe for the next "Banking Crisis". But worse than in 2008, as back then, the "Shadow Banking Segment" played only a minor role, very much opposed to today. It's not about "if", it's about "when".

Let's enjoy the ride the US Bankers exclaim, we can always put on the safety belts 5 minutes before 12 o'clock. The Bankers gospel, about as old as the Egyptian pyramids.

In the UK 1970's financial crisis ,the 1st tier banks formed a

"lifeboat' to bail out the loan crazy second tier

over stretched banks.

Some of the worst offenders did well !

Sounds familiar !

I recommend following UNFTR.com for commentary and analysis.

Specifically on the matter of the risk non-bank loaning and deregulation are to the economy.

All that is just more erasing what Obama achieved in solving the 2008 Financial Crisis.

For those who don't remember, the world's financial system was days from collapse. Obama stepped in and did a few things:

-forced banks to sell bad assets

-ordered banks to issue new capital and de-lever

-backstopped the insurance industry, which had assumed all of the world's risk and was in danger of collapse

-supported to Commercial paper market

-supported the money market

Allowing banks to re-lever, as well as hide risk off balance sheet, is going to destroy the system. A perfect storm is coming as worldwide debt--at personal level, corporate level and sovereign level---is approaching $350,000,000,000,000, notional value of derivatives is approaching $900,000,000,000,000 and is a daisy chain only needing on weak link to explode, US National Debt is over $39 trillion, and AI is going to decimate the already weak labor market (reported UE hides the fact hundreds of thousands of Americans are leaving the labor force each month as they've given up looking for work; March's number was large enough that UE actually increased to over 5%, vs the reported "improvement").

Private equity forms are doing poorly, holding some $11 trillion is supposed value of companies they are unable to sell, but against whose supposed value they borrow and borrow. Bad time to allow banks to lever up, as their PE defaults are only going to increase.

The crisis has been coming for some time and they just keep kicking the can down the road. A tremendous amount of wealth transfer has gone from Europe and the US to Asia over the past couple of decades and that's just continuing, as many countries in Asia are offloading US bonds, and no longer purchasing them.

In addition the stock market is over inflated to rla rather ridiculous degree. When you have stocks commonly trading at 30 to 40 times earnings that is a big red flag. I don't have a crystal ball and I don't know when it's coming, but it is coming and I would expect the Dow to drop to 5,000 or lower when it happens. I also expect housing prices to drop dramatically throughout most of the world. I would I could see unemployment at 35% and inflation at 20% officially. By kicking the can down the road for so long, that only means that the correction is going to be infinitely more severe.

This is dark stuff, but there are ways we can prepare, and take advantage of the crash, but leaving our money in the markets and the banks is not exactly what I would call preparation.

Edited April 30Apr 30 by spidermike007

2 hours ago, Wingate said:

All that is just more erasing what Obama achieved in solving the 2008 Financial Crisis.

This is what he achieved - look at all the assets held by the Fed. The "success" has simply been the Federal Reserve printing or borrowing money and giving it to cronies.


It's called the Cantillon effect. The people or organizations closest to the Fed like the big banks and major investors get the benefits of the money, while everyone else has to suffer from inflation and lack of true growth.

Obama should have been man enough to allow a harsh but brief recession, but instead he created the above chart.

Source: https://landmarkwealthmgmt.com/articles/quantitative-easing-the-fed-balance-sheet/

Edited April 30Apr 30 by davb

On lighter note...

On 4/30/2026 at 2:56 AM, spidermike007 said:

The crisis has been coming for some time and they just keep kicking the can down the road. A tremendous amount of wealth transfer has gone from Europe and the US to Asia over the past couple of decades and that's just continuing, as many countries in Asia are offloading US bonds, and no longer purchasing them.

In addition the stock market is over inflated to rla rather ridiculous degree. When you have stocks commonly trading at 30 to 40 times earnings that is a big red flag. I don't have a crystal ball and I don't know when it's coming, but it is coming and I would expect the Dow to drop to 5,000 or lower when it happens. I also expect housing prices to drop dramatically throughout most of the world. I would I could see unemployment at 35% and inflation at 20% officially. By kicking the can down the road for so long, that only means that the correction is going to be infinitely more severe.

This is dark stuff, but there are ways we can prepare, and take advantage of the crash, but leaving our money in the markets and the banks is not exactly what I would call preparation.

I would consider above comment as accurate.

The US consumer sees the current situation as an "inconveniance". Gas and food prices up. But the "government" will rectify the situation as it has before. By selling treasury bonds to the rest of the world. As always.

But the world has increasingly less appetite for US T-Bonds, to keep the American "merry go round" alive.

4 hours ago, swissie said:

I would consider above comment as accurate.

The US consumer sees the current situation as an "inconveniance". Gas and food prices up. But the "government" will rectify the situation as it has before. By selling treasury bonds to the rest of the world. As always.

But the world has increasingly less appetite for US T-Bonds, to keep the American "merry go round" alive.

And that is a rather accurate reply, the world is not only not buying US bonds, many countries are dumping US bonds as we speak. Hence the relatively high rates, which the US cannot afford in the long run.

How the US could still be considered a safe haven with all the instability in the leadership is something that continues to boggle my mind. Few alternatives? If I had excessive amounts of cash I would be investing in Asian currencies right now.