By Cornelius Christian
Michelle Makori – Wednesday May 3, 2023<\/p>\n\n\n\n
JP Morgan Chase bought the beleaguered First Republic Bank over the weekend, making First Republic\u2019s failure the second-largest bank collapse in U.S. history.<\/strong><\/span><\/p>\n\n\n\n According to Andrew Axelrod, global macro expert, the banking crisis is just getting started. He highlighted that many banks are exposed to commercial real estate, a sector which is expected to collapse due to remote work and companies downsizing their assets.<\/strong><\/p>\n\n\n\n \u201cWith the simple fact that remote work is such a big deal, that means there are a lot of open office spaces,\u201d he told Michelle Makori, Lead Anchor and Editor-in-Chief at K-News. \u201cWhen it comes time to rolling those mortgages over, they\u2019re not going to do that\u2026 Within the banks, their collateral layer is starting to come apart.\u201d<\/strong><\/p>\n\n\n\n Axelrod\u2019s comments echo those of Tesla CEO Elon Musk and Berkshire Hathaway\u2019s Vice Chairman Charlie Munger, who have both warned of the risk from commercial property loans. Musk, in an April interview with now former Fox News host Tucker Carlson, forecast that commercial property is the \u201cnext anvil\u201d to drop in the ongoing banking crisis.<\/strong><\/p>\n\n\n\n As people withdraw money from banks to place them in T-bills, which carry a higher yield, and as mortgages mature, Axelrod said a \u201cmassive problem\u201d could manifest.<\/span><\/p>\n\n\n\n Gold Rally<\/strong><\/p>\n\n\n\n As gold continues to hold above $2k, Axelrod suggested that the rising economic uncertainty could send it to $3k within the next 12 months.<\/strong><\/p>\n\n\n\n \u201cI don\u2019t think $3k is crazy,\u201d he said.<\/strong><\/p>\n\n\n\n Axelrod\u2019s prediction comes in the midst of a gold-buying frenzy, which saw 2022 as the best year for central bank gold purchases.<\/strong><\/p>\n\n\n\n Fed \u2018money printing\u2019<\/strong><\/p>\n\n\n\n As banks fail and the economy slows down, the Federal Reserve will turn on its \u201cmoney spigots\u201d and use quantitative easing to bail out the economy, said Axelrod.<\/span><\/p>\n\n\n\n