Frank Capra’s “It’s a wonderful life” is one of the most iconic movies of all time. One of its most remarkable scenes is when George Bailey finds out his bank is encountering “all the earmarks of […] a run”, his customers desperately trying to withdraw their balances.

“You’re thinking of this place all wrong… as if I have the money back in the safe. The money is not here. Your money is in Joe’s house that’s right next to yours […]”

We encountered such a run in March 2023 resulting in the collapse of Silicon Valley and Signature Bank. The run would have undoubtedly spread to other banks if the government had not intervened.

Of course, the consensus narrative is that a lot of banks are too big to fail and that governments should jump in to save them at all costs.

This effectively means that 1) we have invited banks to privatize profits and socialize losses leading to ever recurring cycles of unscrupulous profiteering and 2) the government is now our bank. Not exactly what had been advertised to us as the glorious creative destruction of capitalism.

The next shoe to drop is a run on our new bank, the government. Governments are ever more indebted and their creditors have started to decide that this is somewhat concerning.

Now, the government has already deemed itself too big to fail and is intervening by buying plenty of its own debt. This is when we know the end is near or at least that it is all downhill from here.

#Bitcoin, the ultimate schmuck insurance against government overspending, is trading at all time highs.

https://soirbleu.medium.com/a-wonderful-bank-run-8a4fef576de5