By Dr. Syed Haider – March 11, 2023
Silicon Valley Bank (SVB) just collapsed in the largest bank failure in US history. At least half of US startup companies banked there (since it was one of a tiny handful of banks willing to take the risk of banking VC backed startups) and most will be unable to meet their payroll requirements next week. Unless the US government unexpectedly backstops the depositors beyond the usual $250,000 FDIC insurance cap, there will be many bankruptcies and second order effects over the coming weeks and months: e.g. the commercial real estate market could come under even more strain than it already has – and most regional banks are heavily exposed to commercial real estate. Some are warning this is the first domino in a far bigger problem, while others think the contagion will not spread as it did in 2008.
In 2008 banks got into trouble because they were lending to extremely risky borrowers then repackaging the risky mortgages into supposedly safe mortgage backed securities – like taking hotdogs and repackaging and selling them to gullible shoppers as filet mignon. But SIVB wasn’t doing anything risky or illegal. SIVB got into trouble because it held on to “low risk” long term US treasuries – i.e. US government debt – that it had bought when interest rates where near zero. Now that interest rates are 5% on US treasuries, no one wants to buy the low rate treasuries and their value has dropped. The bank could have spent a small percent of their total exposure to buy insurance against this situation, but did not.
Then in the past few days venture capitalists like Peter Thiel of the Founders Fund and his buddies started telling the startups they had invested in to yank their funds out.
Within 24 hours $42 billion had been withdrawn from the bank – a sum that perhaps no bank in the world actually has on hand for immediate withdrawal. In a fractional reserve world the money isn’t actually there – it’s almost all lent out or invested in presumably “safe” places like US treasuries.
No one really knows how far this will spread or how fast.
At mygotodoc we’re dependent on software vendors for a number of functions like the electronic medical record/patient portal, our website chat interface, our payments, etc. I don’t think anyone is affected by this banking collapse, but it’s possible some of them are and we might have to find other vendors or workarounds to keep the ship afloat.
The greatest risk for a medical freedom focused online doctors office is of course the banking system itself deciding we don’t belong and taking away our ability to accept payments from patients.
There are fledgling workarounds like crypto currencies, especially the highly distributed, censorship resistant bitcoin that has allowed outfits like Wikileaks to survive. But as we saw with the Canadian truckers fiasco if Bitcoin needs to be donated via a centralized authority and converted to and from dollars at any point then it is as susceptible as any government backed currency. Also most patients, especially the elderly ones, are simply unable to make payments in cryptocurrency in 2023.
Perhaps Gab pay or Elon Musk’s fantasy super app may help some outfits for a time, but they are still plugged into the broader legacy banking system, so ultimately they are not robust solutions and if anything more likely to simply provide services for convenient controlled opposition type companies – it looks like their stepping out of line and speaking truth to power, but if they go too far and start calling out the DOD, or pointing out other inconvenient truths, they will also be silenced.
At the moment there is no solution for a telehealth company that is targeted by authorities. There has been some anemic pushback so far against isolated, individual physicians, but if the government really wanted to shut down the medical freedom movement it would be laughably easy: just lean on the banks.
Most of the doctors who are treating Long COVID and Vaccine injuries can switch to treating local patients and taking cash, but that leaves most of the spike protein injured population without effective treatment options, because there are not enough clinicians willing and able to help in all the communities around the country.
If it did happen I would hope the market would provide a solution: as more and more patients demand meds that actually work for their illnesses, perhaps more and more clinicians will rise up to throw off their shackles and provide the necessary care – it would require many to cut ties with their employers and strike out on their own, usually without a safety net, but if there was enough demand the supply would follow. This might even be preferable to the online world we’re relegated to now.
It’s not just SVB that’s in a pickle. Every other bank and sovereign wealth fund has some degree of exposure to the US treasuries risk and even those that have “insurance” may not escape unscathed if everything suddenly unwinds – insurance just passes the risk along to the insurer, if they have to cover more than they expected they go out of business and then what? The Fed can lower interest rates again to fix the pricing problem, but that will speed up inflation. We’re stuck between a rock and a hard place and theres no getting out. The monetary system is headed for a fall sooner or later.
The ultimate long term solution is a sound money that is censorship resistant like Bitcoin, or an electronic payment network backed by physical gold: sound money and payment networks that resist state control are the basis of free commerce, without which societies are always liable to state sanctions. Sound money also solves the problem of rising time preference that makes people more barbaric and less concerned with long term planning for themselves and the world at large.
The more virtualized the economy and the money, the easier it is for the state to yoke us all. CBDCs would be the ultimate expression of economic slavery. Step out of line and your money stops working. Buy too much hamburger and your card will only allow soyburgers until next month. Drive too far from home and your car will simply turn itself back around.
True medical freedom requires monetary freedom: money is not a state good, it is the ultimate market commodity, in which all other commodities are priced. Money is your labor, your economic energy, your distilled effort, your saved up capital – that you can choose to exchange for other goods and services.
Control of money means control of people.
Fix the money, fix the world.