How to Protect Yourself From the Banking Collapse

This Is the One Asset You Need to Own…

I was in the lounge at Singapore’s fabulous Changi Airport last October, waiting on a flight back home to Prague, and I wrote this: “Banks are going to fail.”

That was part of a larger column noting that we were on the brink of a new financial crisis… all because of the Federal Reserve’s aggressive efforts at combating inflation by jacking up interest rates with a ferocity never before seen.

Over the past year, interest rates have moved from 0.25% to 4.75%.

That’s an 1,800% increase… the largest jump in percentage terms in the history of America. And it has accomplished exactly what I predicted back in the Changi Airport lounge: Bank failures.

Here we are, less than six months later, and we’ve had three U.S. banks fail. We have headlines reporting that nearly 200 other U.S. banks could face a similar fate to the banks that have already failed.

And we have the collapse of Credit Suisse, one of Switzerland’s two most important banks, and one I specifically mentioned in that column as a potential failure candidate.

What I am ultimately getting at here are dots. As in “connecting the dots.”

Because when you see the dots, it gives you the chance to protect your wealth… and even grow it massively.

In a moment, I’ll share a way you could potentially grow your wealth significantly, but first a note about the future…

When I left The Wall Street Journal in 2010, after 17 years as a financial writer, I began a new career as what I like to call a Big Picture Dot Connector. In simpler terms, I think of myself as an “economic futurist.”

I know from my past career that the mainstream media focuses solely on the day to day… on the churn of selling papers and getting clicks. As such, most reporters have little or no time to think about how the stories of the day are part of a much bigger trend that will impact our long-term future.

That’s why the mainstream media completely missed the global financial crisis… the dotcom crash… the huge spike in inflation… the current banking collapses…

But to me, the data points that emerge from day to day or month to month are dots in a much larger mosaic.

That writing exercise in Changi Airport is a good example of what I’m getting at. When I wrote that dispatch, few people gave any credence to the idea that the banking industry was in trouble. The dots, however, told a different story…

• Banks are super vulnerable to interest rate changes because those changes directly impact their income (the rates they earn on their investments and the loans and mortgages they issue) and it impacts their cost structure (the rates they pay to depositors).
• Big interest rate hikes were clearly going to hit the banking sector… hard. Small hikes would be paper cuts here and there that would quickly heal. Historically large hikes are potentially life-threatening wounds opened up with a samurai blade.

That wasn’t hard to see. But you have to be a futurist to see it, otherwise you’re only thinking in the moment.

You’re not seeing the risks that are emerging… and you’re not seeing the opportunities hidden in those risks.

Look at 2007, the housing crisis. It was a violent event economically. Yet those who saw that risk also saw the opportunity to own investments that skyrocketed in value as the housing market and mortgage banking fell apart.

Life is not different today. Only the dots have changed.

The picture the dots paint now tells me we have not seen the end to this crisis.

Banking regulators do not regularly—meaning, ever—step in and insure every single deposit in two failed banks, as they did with the failures of Silicon Valley Bank and Signature Bank.

That’s a dot.

And it fits in with other dots that says the U.S. financial system is more precarious than people imagine. It says the status quo we know is not long for this world.

We’re close to a much bigger monetary/financial crisis that the government is not going to be able to prevent. Or if it does manage to prevent the crisis to come, it will do so at an immense cost that drives hyperinflation.

And what do all of those dots say?

What they’ve been saying now for more than a decade: Own gold.

It was one of the notes I shared in that dispatch from the Changi Airport. Back then, gold was just under $1,700 per ounce. It’s up about 15% since then… and about $100 shy of a new record above $2,060 per ounce.

For the last decade, gold has traded in a range between $1,100 and just under $2,100.

Based on all those dots I’ve collected over the years, my thinking on gold has evolved.

I used to think gold would hit $2,500. Now, I see gold going on a huge run to $3,400 or more, likely before 2027. Maybe as soon as 2025.

Pay attention to the dots. They’re trying to tell us a story of a crisis brewing.