Greg Foss, a managing partner at Credit Strategies and a bond and credit expert with 30 years of experience in high-yield credit trading and analysis, has issued a warning about the banking crisis and the risks of contagion that might devastate the global financial system.
In a recent interview with Kitco News, Foss discussed his prognosis on US macroeconomic conditions, warning that the contagion effect will force additional banks to fail, wiping out $10 trillion from the economy as they all fail. He recommended investors be careful and concentrate their efforts on hard money assets such as Bitcoin and gold.
According to Foss, while many people believe that banks are too large to fail, this is a dangerous notion. While the largest banks are likely to be bailed out, this does not indicate that shareholders will be bailed out, which implies that a significant amount of money could be lost. According to Foss, there is at least $10 trillion in global bank stock that might be lost if the system fails.
Furthermore, Foss warned that in the event of a bank failure, even depositors are vulnerable to losses. He used Cyprus as an example, where depositors had to take a hit as part of the bank bail-in. This is why investors must exercise extreme caution when investing in banks, even if they are JP Morgan, which has capital ratios comparable to other banks.
Foss believes that bank risks exist and that more banks will fail in the future. While these errors may not be catastrophic, the threat of contagion, which might lead the system to fail, is always present. He noted that Credit Suisse fell primarily because of its first butterfly wings and that other banks could follow suit.
In light of these concerns, Foss advises investors to concentrate on hard money assets such as Bitcoin and gold. These assets have shown to be safe havens for value and can shield investors from the threats of fiat depreciation and inflation.
Foss's warning comes as the United States faces the prospect of a debt default. Treasury Secretary Janet Yellen has warned that the United States may run out of money by June 1st, risking a default if the debt ceiling is not raised. While Foss believes that the United States would be the last to fall, he feels that the risks are genuine and that investors must exercise caution.
Finally, Greg Foss's warning regarding the threats to banks and the global financial system should not be dismissed lightly. Investors should exercise caution and concentrate on hard money assets such as Bitcoin and gold, which can insulate them from the risks of fiat depreciation and inflation. Banks face genuine risks, and while the largest banks may be bailed out, stockholders and even depositors may not be so fortunate.
This article was proofread by ChatGPT.
Source:
Let's Talk Crypto, 11 May 2023, "Greg Foss SOUNDS The ALARM: GET OUT NOW! #BuyBitcoin",