OTCbid - $10 trillion could be 'wiped' from banking sector as more banks collapse, Bitcoin insures against U.S. debt crisis - Greg Foss
" $10 trillion in equity could be "wiped out" from the banking system as more banks fail, according to Greg Foss, Bitcoin Strategist and Executive Director at Validus Power Corp.
Foss, who has more than three decades of experience in high-yield credit trading, responded to Federal Reserve Chair Jerome Powell's recent statement that the U.S. banking sector is "sound and resilient," which Powell made at the FOMC Press Conference on Wednesday.
"I think Jerome Powell is a horrible poker player," Foss told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News. "There's another shoe to fall [for banks], or as Elon says, it could be an anvil."
Foss cited Elon Musk who claimed, in an interview with former Fox News host Tucker Carlson, that more banks will fail as commercial real estate loans default . Foss said "a lot more" banks could collapse.
"The biggest banks are too big to fail, which means they will get bailed out," he observed. "But that doesn't mean that shareholders get bailed out, and this is where a lot of money can be lost. There are probably, by my estimation, at least $10 trillion of bank equity globally that can literally be wiped out if the system fails."
The Federal Reserve hiked interest rates by 25 basis points on Wednesday, in line with market expectations. The rapid pace of Fed hikes, which amount to 500 basis points in little more than a year, has caused Fed staff to forecast a recession.
Fed Chair Powell disagreed with the projections and suggested a soft landing is still possible.
"This is the first time in my history that I've seen the Fed, as a group, predicting a recession," claimed Foss. "I don't think he [Powell] is going to be able to thread the needle on this soft landing."
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