What a Bank Failure in Paraguay Says About Counterparty Risk

In this appearance on the And We Know show, Dr. Kirk Elliott looks at the failure of a large app-based bank in Paraguay that he says left a majority of the country's adults without access to their money, and explains how bad and insider loans at a digital-only bank allowed the damage to spread so quickly. He connects that story to recent declines across cryptocurrency markets and a reported hack of the Binance exchange, and explains why he believes people should be careful about holding too much of their wealth in digital form or in banks that are thinly capitalized and highly leveraged. He describes how physical gold and silver stored at home carry no counterparty risk, and how metals held in a depository in the owner's name alone remain the owner's property even if the facility changes hands. He then turns to the midterm election results and the swing in stock markets that followed, what a divided government with a presidential veto could mean for economic growth, the cost of new spending proposals such as universal healthcare, and Treasury Secretary Scott Bessent's comment that higher interest rates may not be all bad. He explains why manufacturers and central banks may increase their metals buying in this environment, frames physical gold and silver as assets investors may want to consider for the long term, and invites viewers to schedule a consultation with the KEPM team.