The Ripple Effect: Exploring the Consequences of the Recent Bank Failures on Venture Capital and Banking Operations.


Bank failures have been a recurring problem throughout history, and they have had significant economic consequences, including job losses, reduced lending, and even bank runs. Some of the most notable bank failures in recent history include the following:

The Savings and Loan Crisis: This crisis occurred in the 1980s and early 1990s and resulted in the failure of over 1,000 savings and loan institutions in the United States. The crisis was caused by a combination of factors, including regulatory and policy failures, bank lax lending standards, speculative investments, a decline in real estate values and a changing economic landscape. Many S&Ls were investing in high-risk ventures without adequate reserves to cover potential losses. The fallout from the crisis was severe, with over 500,000 job losses, reduced lending, and a decline in overall economic growth and stifling business investment.

The Global Financial Crisis: The global financial crisis of 2008 was one of the most severe financial crises in history that began in the United States and quickly spread to the rest of the world. The result was the failure of numerous banks and other financial institutions around the world. The crisis was caused by a combination of factors, including a housing market bubble, high levels of debt, and a lack of regulatory oversight. The consequences of the crisis were severe, with millions of people losing their jobs, reduced lending, and a significant decline in global economic growth. In response to the crisis, the U.S. government launched the Troubled Asset Relief Program (TARP), which provided financial assistance to banks and other financial institutions. The program was controversial, with many critics arguing that it was a bailout for Wall Street at the expense of Main Street.

The European Sovereign Debt Crisis (aka the Eurozone crisis): The European sovereign debt crisis began in 2009 and was characterized by high levels of debt and fiscal instability in several European countries. The crisis led to the failure of several banks, as well as a significant reduction in lending and economic growth. Several European countries, including Greece, Italy, and Spain, had accumulated high levels of debt, which made them vulnerable to a sudden loss of investor confidence. This was particularly problematic given the shared currency used by many of the affected countries, which limited their ability to devalue their currency and adjust their economies. The crisis had far-reaching consequences, including political and fiscal instability with high levels of government spending and low levels of tax revenue as well as social unrest, with widespread protests and strikes in many affected countries.

The consequences of bank failures can be severe and long-lasting. In addition to job losses and reduced lending, bank failures can lead to a loss of investor confidence, which can have a ripple effect throughout the broader economy. Bank runs, in which depositors rush to withdraw their funds, can further exacerbate the problem, leading to a liquidity crisis and further economic disruption.

This time around what is to be expected after the failures of Silicon Valley Bank, Signature Bank and soon Credit Suisse. Financial Armageddon or back to stability? What impact will this have on venture capital and banking activities?  Most importantly, what are some solutions to stop the spread of more looming failures? 

Very few people know money better than Rosie Rios. She says blockchain technology will play a large part in the financial system in the near future and that the train has already left the building. 

The banking industry is on the brink of a revolution, one that is poised to drastically alter the way we transact, store, and access our financial resources. Blockchain technology is leading the way, bringing with it the promise of increased transparency, reduced fraud, and improved operational efficiency. 

Here’s how:

Transparency: Blockchain technology allows for a decentralized, immutable ledger of transactions that is visible to all parties involved. This means that every transaction is transparent, and everyone can see the exact details of the transaction. This transparency can help to prevent fraud, as it becomes more difficult to hide fraudulent transactions. It also increases trust between parties, as there is no need for intermediaries to verify transactions. Right now the banking industry seems to be lacking trust with the “people” who are at the most risk.  Building a new level of transparency which any 3rd party or individual can verify would drastically reduce rising tensions.  Trust with the ability to verify would be a big step forward in the banking world. 

Fraud Reduction: The decentralized nature of blockchain technology also makes it more difficult for fraudsters to manipulate transactions. In traditional banking, fraudsters can manipulate data to create fake transactions, but in a blockchain system, every transaction is verified by multiple parties, making it much more difficult to manipulate. Blockchain technology also uses cryptographic algorithms to ensure that transactions are secure and tamper-proof.

Operational Efficiency The implementation of Blockchain technology stands to bolster banking operations efficiency by mitigating errors, diminishing the reliance on intermediaries, such as clearinghouses, and expediting the settlement process. Conventional banking systems often necessitate multiple days for transaction settlement and intermediary involvement for verification and completion. Through the adoption of Blockchain technology, real-time transaction settlements become feasible, concurrently reducing costs, dependency on intermediaries, and accelerating the settlement process. Furthermore, Blockchain systems facilitate the automation of compliance protocols, including Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations, thereby enhancing operational efficiency and mitigating non-compliance risks in the highly regulated financial sector. Nevertheless, to fully harness the advantages of this technology for the stabilization of the banking industry and the restoration of public confidence, challenges such as integration complexities, interoperability concerns, and resistance to change must be effectively addressed.

Smart Contracts: The adoption of Blockchain technology facilitates the utilization of smart contracts, which encompass self-executing agreements with contractual terms directly embedded within the code. These innovative contracts have the potential to automate an array of banking procedures, such as loan disbursements and insurance claims processing, ultimately diminishing the necessity for human intervention and augmenting operational efficiency across the financial sector.

In unwavering alignment with the Financial Policy Council’s objectives, the revolutionary promise of blockchain technology heralds a new era of disruption in the banking sector, underpinned by core financial and politically conservative values. This transformative innovation fosters increased transparency, combats fraud, and amplifies operational efficiency. However, we acknowledge the associated challenges of embracing this cutting-edge technology, including scalability concerns, substantial energy consumption with environmental implications, complex regulatory obstacles, and the ever-present threat of cyber-attacks. These potential issues could undermine system confidence and pose challenges to the conservative principles of stability, necessitating vigilance and adaptability in our pursuit of sustainable progress.

Another operation tool to consider is stress testing. In the arsenal of financial defense mechanisms, stress testing emerges as a vital instrument wielded by astute financial experts to appraise a bank’s resilience under adverse economic circumstances. This rigorous methodology scrutinizes a bank’s fiscal framework under a gamut of hypothetical scenarios, assessing its fortitude against the onslaught of financial turbulence, such as market downturns, interest rate oscillations, or geopolitical upheavals.

Stress testing serves to unveil potential susceptibilities within a bank’s operations, empowering preemptive action to mitigate risks. One must ponder, could the recent spate of bank failures have been circumvented through more in-depth probing into their leverages and liquidity? By comprehending the potential ramifications of unfavorable economic conditions, financial institutions can adopt measures to bolster their financial standing. This includes enhancing risk management practices, curtailing exposure to particular markets or assets, and augmenting capital reserves.

Moreover, stress testing can aid financial institutions in anticipating and preparing for potential regulatory mandates, encompassing capital adequacy ratios or liquidity requisites. Through regular stress tests, banks can discern frailties in their financial posture and adopt appropriate measures to adhere to regulatory benchmarks.

Mandatory stress testing should be enforced upon banks, compelling them to undergo periodic assessments of their resilience to adverse economic and financial environments. These stress tests ought to be devised to simulate an array of plausible scenarios, factoring in emerging risks. The recent bank collapses, blindsiding everyone, raise crucial questions regarding the efficacy of existing risk management practices.

In summary, stress testing is an indispensable tool for financial institutions to evaluate and manage risk, ensuring their preparedness to weather economic shocks and maintain stability amidst adversity. An independent third party should possess the authority to assess and monitor financial institutions, preserving their financial health and mitigating risks in the ever-evolving economic landscape. By grasping the potential consequences of adverse economic scenarios, financial institutions can implement strategies to reinforce their financial positions, thereby promoting a more secure and robust financial system.

We all know the banking system is not short on regulations. However, perhaps regulators should focus on implementing prudential standards that promote the stability of the financial system as a whole, rather than simply focusing on the health of individual banks. This approach takes into account the interconnectedness of the financial system and recognizes that the failure of one institution can have ripple effects throughout the system.

Championing transparency and market discipline: 

Cultivating a compliance-centric ethos: Regulators ought to actively encourage banks to foster a robust culture of compliance, wherein the significance of abiding by laws and regulations permeates the organization’s core values and conduct. In this financial landscape, vigilance and adherence to regulatory frameworks must be deeply entrenched in the institution’s DNA.

By facilitating transparency and nurturing a compliance-focused environment, regulators can effectively mitigate systemic risks and promote stability within the banking sector. The interplay between these two elements is crucial in fostering an economic ecosystem aligned with conservative values, which ultimately seeks to preserve the integrity of the financial system.

For example, consider the consequences of opacity in the run-up to the 2008 financial crisis. Lack of transparency regarding risk exposures in mortgage-backed securities, coupled with a weak culture of compliance, precipitated a catastrophic chain of events. To prevent history from repeating itself, regulators must champion transparency and compliance as non-negotiable cornerstones of a stable financial landscape.

Transparency and compliance are not merely aspirational objectives; they are the bedrock of a resilient, well-functioning financial system. By heeding the lessons of the past and ardently championing these principles, regulators can safeguard the financial sector from the perils of instability, ensuring that it remains a bastion of conservative, disruptor-style growth and wealth creation for generations to come.

To achieve this goal, regulators should implement prudential standards that:

Encourage robust risk management practices: Regulators should require banks to adopt and maintain robust risk management practices that identify, measure, and manage risks effectively. Banks should also be required to have adequate capital and liquidity buffers to absorb unexpected losses.

Promote transparency and market discipline: In an era where financial fortitude is paramount regulators bear the responsibility of mandating banks to disclose relevant information about their financial health and risk exposures to investors, creditors, and other stakeholders, presented in a comprehensible manner. This information should be easily accessible and understandable to promote market discipline and informed decision-making. For example, consider the consequences of opacity in the run-up to the 2008 financial crisis. Lack of transparency regarding risk exposures in mortgage-backed securities, coupled with a weak culture of compliance, precipitated a catastrophic chain of events. To prevent history from repeating itself, regulators must champion transparency and compliance as non-negotiable cornerstones of a stable financial landscape.

Foster a culture of compliance-centric ethos: Regulators ought to actively encourage banks to develop a robust culture of compliance, wherein the significance of abiding by laws and regulations permeates the organization’s core values and conduct. In this financial landscape, vigilance and adherence to regulatory frameworks must be deeply entrenched in the institution’s DNA.

By facilitating transparency and nurturing a compliance-focused environment, regulators can effectively mitigate systemic risks and promote stability within the banking sector. The interplay between these two elements is crucial in fostering an economic ecosystem aligned with conservative values, which ultimately seeks to preserve the integrity of the financial system.

Transparency and compliance are not merely aspirational objectives; they are the bedrock of a resilient, well-functioning financial system. By heeding the lessons of the past and ardently championing these principles, regulators can safeguard the financial sector from the perils of instability, ensuring that it remains a bastion of conservative, disruptor-style growth, and wealth creation for generations to come.

To monitor emerging risks, regulators should:

Use data analytics and technology: Regulators should leverage data analytics and technology to monitor emerging risks, such as those posed by new financial technologies. This includes using machine learning algorithms to identify patterns and anomalies in large datasets, as well as monitoring social media and other online platforms to detect early warning signals.

Fostering collaboration among industry stakeholders: Regulators ought to forge strong partnerships with industry stakeholders, including banks, fintech firms, and other market participants, to identify and assess emerging risks. This collaboration can help regulators stay abreast of novel developments and trends in the industry and furnishing invaluable insights into potential risks, hazards, and vulnerabilities.

Cooperation among government, regulators, and the private sector can diminish bank failures by fostering stability and guaranteeing that banks function in a secure and sound manner. Industry-wide initiatives, such as the formation of a “bad bank” to absorb distressed assets, can effectively stave off the contagion effect of a bank failure and minimize its repercussions on the broader financial system—akin to quarantining bad assets to prevent the spread of economic malaise.

The private sector plays an indispensable role in promoting stability and reducing bank failures. By collaborating with other banks and financial institutions, they can cultivate industry-wide initiatives that enhance stability and thwart the contagion effect of a bank failure. In this era of conservative, disruptor-style growth, cohesive collaboration is the key to maintaining a resilient financial landscape, preserving the principles of opportunity and freedom that define our nation.

In summary, regulators should focus on instituting prudential standards that bolster the stability of the entire financial system, vigilantly monitoring emerging risks and adapting banking policies in stride. This approach necessitates a collaborative effort between regulators, industry stakeholders, and other pertinent parties to safeguard the financial system’s integrity. Embracing the banking world as a living evolving ecosystem is vital for timely adaptation rather than belated reactions.

The Financial Policy Council (FPC) ardently advocates for a robust, nonpartisan solution to preclude future bank failures and instability in world capital markets. It is imperative to undertake a comprehensive overhaul of the regulation of banks and financial markets, ensuring that American entrepreneurship and our capitalistic republic remain a beacon of trust and a stronghold of freedom for all people seeking a land of opportunity and liberty.

Will the recent failures lead to less credit? 

Venture capital is a key source of funding for startups and small businesses, and any disruption to the industry could have far-reaching consequences. The recent bank failures pose a threat to venture capital, a crucial lifeline for startups and small businesses. These failures may lead to losses, delays in funding, and restricted access to capital for VC firms particularly if those institutions are more cautious in the wake of the failures. However, we must not be deterred. It is crucial that we adapt and overcome, ensuring that VC firms can tap into alternative funding sources to weather the storm.

Banks have collapsed in the past, however this time around it seems to be different. We stand at the precipice of a monumental currency transformation, with the rise of artificial intelligence and chatbots in banking services, blockchain technology to improve security and efficiency, the rise of central bank digital currencies, the expansion of open banking, and the adoption of cloud computing to improve scalability and reduce costs all converging at once. Additionally, the upgrades and importance of customer experience and personalization in digital banking, as well as the need for banks to adapt to changing consumer behaviors and preferences. While these advancements may usher in a new era of stability and efficiency, we must also be vigilant in the face of international financial competition and the potential erosion of the dollar’s status as the world’s reserve currency.

All this happening almost simultaneously will hopefully lead to bank stability and a more robust monetary system. However, the United States has financial competitors with goals of their own. Will the dollar remain the world currency? How soon will banks integrate a digital currency and what will that look like? Will the endless printing of money based on just the word of the US government continue with no end in sight and further impact the banking system? Unrestrained money printing, fueled by mere governmental promises, cannot continue indefinitely without severe consequences. It is essential that we explore the role of collective consciousness, media influence, and the potential for future bank runs in shaping our financial landscape.

The time has come for America to wake up and challenge the disastrous policies of the current administration and the Federal Reserve, which have failed to effectively address the economic and banking challenges facing our great nation. It’s high time we demand our government solicit input from the sharpest financial minds like Randal Quarles, Richard Shelby, Jeb Hensarling, Mick Mulvaney, Henry “Hank” Paulson, and Warren Buffett, who have the expertise and the grit to break through the bureaucratic red tape and formulate game-changing policies.

The FPC firmly believes that only a vigorous, nonpartisan solution can prevent future bank failures and ensure stability in global capital markets. We must fight for the American dream, where everyone, regardless of their birth or social class, has the chance to succeed in a society that fosters upward mobility. Our capitalist republic must remain a beacon of hope and trust, a fortress of freedom where the pursuit of opportunity is not only possible but encouraged.

Join our ever-growing community of informed readers as we navigate the intricate world of finance together. Stay ahead of the curve and gain valuable insights and analysis to make sense of the challenges that lie ahead. The future of America’s economic prosperity and the stability of our banking system depend on it.

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Have a great day.


What’s the Next Game Changer Ahead? 


 In my 3 decades in the investment world, I’ve seen a number of economic cycles, pendulum swings, manias and panics, bubbles and crashes, but I remember only two real sea changes. I think we may be in the midst of a third one today. 

It all started with the so-called “Nifty Fifty.” The Nifty Fifty comprised the stocks of companies that were considered the best and fastest-growing – so good that nothing bad could ever happen to them. For these stocks, everyone was sure there was “no price too high.” until you were sitting on losses of more than 90% . . . from owning pieces of the best companies in America. Perceived quality, it turned out, wasn’t synonymous with safety or with successful investment. 

Meanwhile, over in bond-land, a security with a rating of single-B was described by Moody’s as “failing to possess the characteristics of a desirable investment.” Non-investment grade bonds – those rated double-B and below – were off-limits to fiduciaries, since proper financial behavior mandated the avoidance of risk. For this reason, what soon became known as high yield bonds couldn’t be sold as new issues. But in the mid-1970s, Michael Milken and a few others had the idea that it should be possible to issue non-investment grade bonds – and to invest in them prudently – if the bonds offered enough interest to compensate for the risk of default. In 1984, I started investing in these securities – the bonds of perhaps America’s riskiest public companies – and I was making money steadily and safely. 

In other words, whereas prudent bond investing had previously consisted of buying only presumedly safe investment grade bonds, investment managers could now prudently buy bonds of almost any quality as long as they were adequately compensated for the attendant risk. The U.S. high yield bond universe amounted to about $2 billion when I first got involved, and today it stands at roughly $1.2 trillion. 

This clearly represented a major change in direction for the business of investing. But that’s not the end of it. Prior to the inception of high yield bond issuance, companies could only be acquired by larger firms – those that were able to pay with cash on hand or borrow large amounts of money and still retain their investment grade ratings. But with the ability to issue high yield bonds, smaller firms could now acquire larger ones by using heavy leverage, since there was no longer a need to possess or maintain an investment grade rating. This change permitted, in particular, the growth of leveraged buyouts and what’s now called the private equity industry. 

However, the most important aspect of this change didn’t relate to high yield bonds, or to private equity, but rather to the adoption of a new investor mentality. Now risk wasn’t necessarily avoided, but rather considered relative to return and hopefully borne intelligently. This new risk/return mindset was critical in the development of many new types of investment, such as distressed debt, mortgage backed securities, structured credit, and private lending. It’s no exaggeration to say today’s investment world bears almost no resemblance to that of 50 years ago. Young people joining the industry today would likely be shocked to learn that, back then, investors didn’t think in risk/return terms. Now that’s all we do. Ergo, a sea change. 

Now what are the factors that gave rise to investors’ success over the last 40 years? We saw major contributions from (a) the economic growth and preeminence of the U.S.; (b) the incredible performance of our greatest companies; (c) gains in technology, productivity and management techniques; and (d) the benefits of globalization. However, I’d be surprised if 40 years of declining interest rates didn’t play the greatest role of all. 

In a recent visit with clients, I came up with a bit of imagery to convey my view of the effect of the prolonged decline in interest rates: At some airports, there’s a moving walkway, and standing on it makes life easier for the weary traveler. But if rather than stand still on it, you walk at your normal pace, you move ahead rapidly. That’s because your rate of travel over the ground is the sum of the speed at which you’re walking plus the speed at which the walkway is moving. 

That’s what I think happened to investors over the last 40 years. They enjoyed the growth of the economy and the companies they invested in, as well as the resulting increase in the value of their ownership stakes. But in addition, they were on a moving walkway, carried along by declining interest rates. The results have been great, but I doubt many people fully understand where they came from. It seems to me that a significant portion of all the money investors made over this period resulted from the tailwind generated by the massive drop in interest rates. I consider it nearly impossible to overstate the influence of declining rates over the last four decades. 

The Recent Experience

The period between the end of the Global Financial Crisis (GFC) in late 2009 and the onset of the pandemic in early 2020 was marked by ultra-low interest rates, and the macroeconomic environment – and its effects – were highly unusual. 

An all-time low in interest rates was reached when the Fed cut the fed funds rate to approximately zero in late 2008 in an effort to pull the economy out of the GFC. The low rates were accompanied by quantitative easing: purchases of bonds undertaken by the Fed to inject liquidity into the economy (and perhaps to keep investors from panicking). The effects were dramatic: 

As a result, in this period, the U.S. enjoyed its longest economic recovery in history (albeit also one of its slowest) and its longest bull market, exceeding ten years in both cases. 

In fact, the overall period from 2009 through 2021 (with the exception of a few months in 2020) was one in which optimism prevailed among investors and worry was minimal. Low inflation allowed central bankers to maintain generous monetary policies. These were golden times for corporations and asset owners thanks to good economic growth, cheap and easily accessible capital, and freedom from distress. This was an asset owner’s market and a borrower’s market. With the risk-free rate at zero, fear of loss absent, and people eager to make risky investments, it was a frustrating period for lenders and bargain hunters. 

That Was Then. This Is Now. 

Of course, all of the above flipped in the last year or so. Most importantly, inflation began to rear its head in early 2021, when our emergence from isolation permitted too much money to chase too few goods and services. Because the Fed deemed the inflation “transitory,” it continued its policies of low interest rates and quantitative easing, keeping money loose. These policies further stimulated demand (especially for homes) at a time when it didn’t need stimulating. 

Inflation worsened as 2021 wore on, and late in the year, the Fed acknowledged that it wasn’t likely to be short-lived. Thus, the Fed started reducing its purchases of bonds in November and began raising interest rates in March 2022, kicking off one of the quickest rate-hiking cycles on record. The stock market, which had ignored inflation and rising interest rates for most of 2021, began to fall around year-end. 

From there, events followed a predictable course that caused pessimism to take over from optimism. The market characterized by easy money and upbeat borrowers and asset owners disappeared; now lenders and buyers held better cards. Credit investors became able to demand higher returns and better creditor protections. The list of candidates for distress – loans and bonds offering yield spreads of more than 1,000 basis points over Treasurys – grew from dozens to hundreds. 

My personal outlook 

Inflation and interest rates are highly likely to remain the dominant considerations influencing the investment environment for the next several years. While history shows that no one can predict inflation, it seems likely to remain higher than what we became used to after the GFC, at least for a while. The course of interest rates will largely be determined by the Fed’s progress in bringing inflation under control. If rates go much higher in that process, they’re likely to come back down afterward, but no one can predict the timing or the extent of the decrease. 

What we do know is that inflation and interest rates are higher today than they’ve been for 40 and 13 years, respectively. Regardless, I think things will generally be less rosy in the years immediately ahead: 

The bottom line for me is that, in many ways, conditions at this moment are overwhelmingly different from – and mostly less favorable than – those of the post-GFC climate described above. These changes may be long-lasting, or they may wear off over time. But in my view, we’re unlikely to quickly see the same optimism and ease that marked the post-GFC period. 

We’ve gone from the low-return world of 2009-21 to a full-return world, and it may become more so in the near term. Investors can now potentially get solid returns from credit instruments, meaning they no longer have to rely as heavily on riskier investments to achieve their overall return targets. Lenders and bargain hunters face much better prospects in this changed environment than they did in 2009-21. And more importantly, if you grant that the environment is and may continue to be very different from what it was over the last 13 years – and most of the last 40 years – it should follow that the investment strategies that worked best over those periods may not be the ones that outperform in the years ahead. 

That’s the third sea change I’m talking about today. 


Social Marxism, Entrepreneurialism and the Gen Z generation-The Clash of Perspectives.


It is clear today that in both socialist and capitalist systems, the use of mass media to shape public opinion can raise concerns about the manipulation of information and the potential for censorship. Those in power can and do use the media to promote their own interests and suppress dissenting opinions, leading to a homogenization of thought and a loss of diversity in the public discourse. 

While the founding fathers did not specifically address the issue of media ownership and concentration, they had a heightened concern for the risks of concentrated power which through inferential coupling can be applied to this issue. Media monopolization restricts the range of free expression of disparate viewpoints that are available to the public which emasculates the ability of citizens to make knowledgeable decisions and hold their government accountable. By promoting diversity and competition in the media, and protecting the freedom of the press, the U.S. government can help to ensure that the media serves as a healthy and independent check on power in a democracy. Unfortunately, while some regulations on media concentration do exist their enforcement by the FCC remains feeble at best. 

The First Amendment to the U.S. Constitution guarantees the freedom of the press, and to ensure that media ownership is disparate and competitive, so that a cornucopia of philosophies and opinions are presented to the public. There is a great concern in America that the government has not fulfilled its obligation to the American people to protect the freedom of an independent, truthful, and unbiased press and it has been accused by many of using the media as a tool of misdirection, suppression of thought, factionalization and ideological polarization masquerading as FAKE NEWS! 

However, the use of mass media to shape public opinion can also have positive effects if used judiciously. In a socialist system, the media can be used to promote collective values and a sense of social responsibility. In a capitalist system, the media can be used to promote accountability and transparency, as well as to provide a platform for diverse perspectives and ideas. 

Ultimately, the use of mass media to shape public opinion is a complex issue that requires careful consideration of its potential benefits and drawbacks. While the legacy of pBAM* and the CIA’s mind control experiments highlights the dangers of unregulated and unethical practices, the responsible use of mass media can be a powerful tool for promoting informed and critical thinking, and for fostering a more engaged and socially responsible society. 

Would you agree that there is there a grand plan to influence public opinion and behavior, such as through advertising, public relations, lobbying, and propaganda to reshape the brainwaves of society?

As the newest generation to enter the workforce and shape the future of business, Gen Z/the “I” generation (iGen) demographic cohort born between the mid-1990s and the mid-2010s has already made a significant impact on the world with their unique perspectives, digital fluency, entrepreneurial spirit, pragmatic focus on transparency and social consciousness. However, many Gen Zers have embraced what some consider “crazy socialistic/Marxist ideas” that suggest that wealth should be redistributed and that the government should take a more active role in ensuring equality. These ideas are an extension of the 1930s and 1940s philosophies of the Frankfurt School led by Max Horkheimer, Theodor Adorno, Herbert Marcuse, and Erich Fromm, who developed a body of work known as critical theory, which sought to analyze the relationship between culture, power, and society, and to develop a Marxist critique of capitalist society. While these ideas may sound appealing, they can be counterproductive in the pursuit of wealth creation and financial success. 

Instead, Gen Zers should embrace and adopt dealmaking and wealth creation as critical strategies for building a sustainable and prosperous future.

Market-based systems have proven to be most effective in generating economic growth and increasing societal material well-being. Working from a base of economic prosperity, it is more reasonable that Gen-Zers will advocate that our government provide a more robust system of social protections and regulations to ensure economic growth and safety nets for the general population without the need to print obscene debt raising fiat currency to sustain the tired, poor and huddled masses, the homeless, tempest-tossed, wretched refuse have nots of society, provide an opportunity for all and keep inflation in check. 

Here are some reasons why:

Deal making and wealth creation promote individual initiative and entrepreneurship. These values are important for Gen Zers who want to make an impact and achieve success on their terms.

Wealth creation is a powerful tool for social change. By creating successful businesses and generating wealth, Gen Zers can fund and support social initiatives that align with their values and have a meaningful impact.

Deal making and wealth creation require innovation and creativity. These are important skills for Gen Zers who are tech-savvy, globally connected, and eager to make their mark in the world.

Wealth creation enables individuals to be more financially independent and self-reliant. This can help Gen Zers avoid being overly reliant on government programs and create more opportunities for themselves and their communities. 

Deal making and wealth creation encourage competition, which can lead to better products, services, and outcomes for consumers. Gen Zers, who value authenticity and transparency, can use this competition to promote more ethical and responsible business practices.

Wealth creation provides a pathway to financial security and stability. This is especially important for Gen Zers, who are facing significant economic challenges, including student loan debt and a competitive job market. 

Deal making and wealth creation promote risk-taking and resilience. These are important qualities for Gen Zers who are navigating a rapidly changing world and facing significant economic, social, and environmental challenges.

Wealth creation provides an opportunity to create generational wealth and ensure a better future for themselves and their families. This can help Gen Zers break free from the cycle of poverty and create a legacy that will last for generations to come. 

Deal making and wealth creation require a long-term vision and strategic planning. These skills are important for Gen Zers who want to create sustainable and successful businesses that will thrive over the long term.

Wealth creation can be a powerful tool for social mobility and creating opportunities for all. By creating successful businesses and generating wealth, Gen Zers can promote diversity, equity, and inclusion and create a more just and prosperous society for everyone.

In conclusion, while some Gen Zers may be drawn to socialistic/Marxist ideas, dealmaking and wealth creation provide a much more effective and sustainable approach to creating wealth and promoting social change. A market-based system supports Gen Zers aspirations of hope and opportunity and a good life for citizens and for immigrants coming to America, who are seeking freedom and opportunity guarded by the Mother of Exiles, the Statue of Liberty, whose torch, and flame of imprisoned lightning stands guard in New York harbor, over truth, justice, and the American way of life. 

By embracing these values and adopting them in their personal and professional lives, Gen Zers can create a much brighter future for themselves, for their communities and for America. God Bless America! 

*pBAM is my acronym for CIA Projects Bluebird, Artichoke and MKUUltra. Project Bluebird was a CIA program that began in the 1950s and aimed to develop mind control techniques for use in intelligence operations. It was a predecessor program to Project Artichoke and then to the expanded Project MKUltra. Each of these programs built on each other and involved experiments on human subjects, including the use of drugs, hypnosis, and other forms of psychological manipulation to alter individuals’ beliefs and behaviors. pBAM also explored methods for changing individuals’ actions and creating “Manchurian candidates” who could be controlled to carry out the CIA’s nefarious tasks. 


The spread of Socialism and How to Counter It


You’ve heard your kids talking about socialism recently. Maybe they didn’t realize exactly what it was, and maybe they didn’t use the proper terminology, but it caught you by surprise. Where could they have learned that? A friend at school? Or even worse, a teacher?

The fact of the matter is that if we don’t talk with our kids about socialism first, they’ll learn about it somewhere else—most likely from someone with their own socialist tendencies.

Everywhere you turn, socialism seems to be gaining popularity with our youth. From popular movies and television shows, to musical lyrics and social media activism, the principles of socialism are being marketed to our youth as the only feasible solutions to the problems they see in society—problems that have been blamed on capitalism.

And herein lies the problem: our children don’t actually know the difference between capitalism and socialism, or any other economic model for that matter.

A recent Pew survey conducted by researchers at Harvard found that more young Americans (ages 18-29) hold favorable views of socialism than capitalism. Yet, among that same demographic, only 27% believe the government should play a large role in regulating the economy. Confusion

What is the socialism that is being marketed to our children?

Promises of universal health care and a debt-free college education lure them in like a moth to a flame. Socialism no longer requires a dictator when an army of well paid, low-level bureaucrats can be just as effective. This type of socialism is not scary to our children. It is the only type of government most of them have ever known.

So what can be done?

“Freedom is never more than one generation away from extinction,” Ronald Reagan once said. “We didn’t pass it on to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same, or one day we will spend our sunset years telling our children and our children’s children what it was once like in the United States where men were free.”

Nearly five decades have passed since Reagan uttered those famous words, reminding us of our obligation to teach the principles of freedom and free enterprise. The situation we face may be different than previous generations, but the responsibility still falls upon us to teach our children how to live free and allow others to do the same. So, how are we going to do that?

  • Understand the Dangers of Socialism.
    • Rather than simply decrying anything and everything we don’t like as socialism, and expecting that to sufficiently deter our children, we must be able to explain to them exactly why these policies, and the philosophies upon which they are founded, will harm people. Democratic Socialism preaches a message of inclusiveness, but socialism has been much less friendly to marginalized populations when actually practiced.
    • When we point out the millions who have been murdered or starved as a result of socialist regimes through the 20th century, our children draw a distinction between the tyrants of the past and a more democratic approach to socialism of the day. Without ignoring those victims of the past, we need to also shine a light on modern examples, like young Charlie Gard, who was not only denied access to medical treatment by bureaucrats and judges in the United Kingdom, but whose parents were barred from attempting to take him out of the country to seek medical treatment elsewhere. Such anecdotes are common, but few receive any media attention. These are modern examples of socialism’s failure.
    • Socialism is not dangerous simply because it tends to lead toward political dictatorship, but because it systematically makes bad decisions about how to allocate the scarce resources people use to satisfy our wants, eliminates any possible mechanisms that might provide feedback showing misallocation, then creates barriers to prevent individuals from trying to correct those errors. Austrian Economists Ludwig von Mises and Friedrich von Hayek explained this phenomenon in great detail in their discussions of the socialist calculation.
  • Clarity of Language
    • As was noted previously, part of the appeal of democratic socialism is that it promises to deliver on things that appeal to our natural yearning for self- expression and freedom. It does this by using language that is intentionally deceptive.
    • Our best tool to combat such confusion is to consistently and accurately label these ideologies and philosophies. Government interventionism to support business or “protect American interests abroad” are no less socialist because they are embraced by the political right. In many cases, it is the capitalists who are the greatest enemies to a capitalist economic system.
  • Intellectual Honesty
    • Along those same lines, if we want our children to be able to discern between socialism and capitalism, we must be honest about the different aspects of our mixed economic model, especially those which are socialistic. Which industries are heavily regulated by government bureaucrats? In which industries does the government exercise an effective monopoly? Are these services really so unique that market principles of capitalism could not provide them?
    • We must also recognize some of the negative outcomes that have been the result of the more capitalistic elements of our economy. The market really does fail, because the market is made up of the actions of regular humans. People make mistakes. We need to be honest about that when it happens (though there is often an underlying rule or regulation that incentivized such an action).
    • Socialists claim that private property rights cannot exist without government intervention, and we often give them intellectual ammunition to support this claim by demanding intervention to protect not only property rights, but property values. Socialism to promote “economic development” is still socialism.
  • Allow Them the Benefit of Property Rights
    • The best way to teach the positive value of personal property rights is to allow children to experience the benefits of such a system firsthand. Children have a natural tendency to want to protect what is theirs. They quickly learn the power and utility of the declaration, “Mine!” Unfortunately, the lesson soon follows that crying and an appeal to parental authority can supersede the property claims of others, as mom or dad, seeking a simple method to calm a sibling squabble, will force the property holder to share the toy or game in question.
    • It only takes a few seconds to appeal to the offended child’s own sense of ownership to help them understand why they would want to have the same rights afforded to them. Encouraging children to share voluntarily, then respecting their decision when they decline, will teach them the importance of consent in other aspects of their lives.



Are Gold and Silver Real Money? Former Federal Reserve Chairman Bernanke answers no.  And so do America’s youth.  Both clueless.

The youth, who pay with credit cards, not with cash, think money is digital. Consequently a bitcoin is worth many times the value of a gold coin despite the fact that a bitcoin’s value is nebulous and can decline thousands of dollars in a day.

And, apparently, gold and silver are not money for people worried about inflation that is
allegedly so serious that the Federal Reserve is engineering a recession and pension
fund and Big Bank wipeout to stop.

With inflation high and financial investments paying so little, why haven’t people sought
to protect their purchasing power by going into gold and silver?  Gold and silver prices
have fallen while inflation has risen. This is nonsensical.

Part of the answer is that the US dollar is high despite high inflation. This normally nonsensical relationship is because the UK pound, euro, and yen are adversely impacted by economy shutdowns due to Covid lockdowns and energy shortages created by Washington’s Russian sanctions, and these countries are experiencing their own inflations from the Covid lockdowns that reduced supply and cut them off from global deliveries.  Supply reductions can result in higher prices just as effectively as
excessive consumer demand.

Another part of the answer is that the supply of gold and silver in the futures market can be increased by printing uncovered contracts and, thereby can be increased in supply like fiat paper money.  The prices of gold and silver are in fact set in futures markets, not in the physical market where gold and silver are purchased.  The futures market in gold and silver permits “naked shorts.”  This means that unlike the stock market, where the person shorting the market has to have the actual stock to sell, which is usually borrowed, gold and silver can be sold short without the seller owning any gold or silver.

What this means is that gold and silver that trade in future markets can be created by printing contracts that are not covered by gold and silver, and today gold and silver can be increased in supply by printing contracts in the futures market where price is determined just as fiat paper money can be printed.

The printing of contracts and then dumping them into the futures market suddenly increases the supply of paper gold.  A sudden increase in shorts in the futures market drives down the gold price.  The Fed & the Big Banks have used naked shorting to prevent rising gold and silver prices that would show the true depreciation in the dollar’s value.

I believe that eventually this way of holding down the price of gold and silver will be overwhelmed by flight from excessively printed paper currencies.

My conclusion: I believe gold and silver are the ONLY REAL MONEY out there.

As J.P. Morgan stated in his testimony before Congress in 1912 “Gold is money. Everything else is credit.”