Silicon Valley Bank Collapse: Short-term and Long-term Concerns Explained

In this episode of Berry’s Bites, Chris Berry answers the question: What is going on with Silicon Valley Bank and other banks?


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Episode Transcript:


What’s going on with Silicon Valley Bank?


What happened is that first, it was Silicon Valley Bank, and then a couple of others went down and the concern was people’s money at these. And so if it was F D I C insured, then the federal governments through their promises are going to reimburse. If it’s not F D I C insured, then what’s supposed to happen is that that individual loses money.

And again, that’s built into the program. What the federal government has stated though, is that for the individuals who had maybe greater than $250,000, so it wasn’t F D I C insured, the federal government, at least right now, is saying they’re gonna step in and make those individual investors. So that’s kind of where we’re at now.

So short term, what should we be thinking about? Well, if you have more than $250,000 in a specific type of account, like checking your savings account and your social security number, you may wanna look at some other options. One of the things we have right now is our high-yield savings account that’s offering about four and a quarter.

It has. For an individual owner, 1.25 million of F D I C insurance protection because if, let’s say some other banks do go under, which again, I’m not saying they will, I would wanna make sure that I have this F D I C insurance protection because we can’t depend on the federal government to. Come in and swipe in knowing that we took on additional risk by not putting things in F D I C insurance.

So that’s something to think about. Short-term. Also short-term, like obviously, this affects the markets, so, uh, the markets don’t like volatility, they don’t like questions. And obviously, with what’s going on right now, that’s raising some questions in people’s minds. And then long-term concern, I. Isn’t so much the markets, the markets are gonna come back.

The markets react emotionally. There’s a lot of emotion going on right now, but the big concern I have is, okay, if the government is gonna start bailing out banks or bailing out individuals, how much additional debt is that gonna rack up? So I’m looking at this from a long-term tax perspective. We know taxes are going up in 2026 because the tax cuts and Jobs Act are expiring, but what about the fact that we’re 31 trillion in debt?

We just passed a 1.7 trillion spending bill, and now what’s gonna happen is we’re bailing out these. Even non-F D I C insured investors or these smaller banks. So my long-term concern is with regard to taxes cuz we can’t keep spending money. We spent a lot during the pandemic. We went from 22 trillion to 31 trillion over about two years.


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