Retro-Tech Now Offers a New Type of Burial

Plus: Why did bitcoin rise 25% during the SVB fiasco?

Ric Edelman: It's Thursday, March 16th. All this week, we're focusing on how the future is changing society. On Monday, I told you how the institution of marriage is expanding to include polyamorous partnerships. On Tuesday, I told you how society of the future will welcome people who have a disability. And yesterday we talked about the surge in the number of grandparents and what that all means for society. If you missed any of these shows, go listen to them.

Today we're going to talk about another aspect of society that's changing - the changing nature of funerals or more specifically, burials. New York just became the sixth state in the country to allow human composting as a method of burial. It's already allowed in Washington, Colorado, Oregon, California and Vermont. Some people consider human composting as an environmentally friendly way to have one's remains returned to the earth as fertile soil.

Here's how it works. The body of the deceased is placed into a reusable vessel, along with wood chips, alfalfa and straw. This organic mix lets naturally occurring microbes break down the body. Only takes about a month. The end result? Soil filled with nutrients. How much soil? A cubic yard; about 36 bags of soil. This soil can be used to plant trees or used in forests or gardens in gardens. Doesn't that mean that the vegetables you eat are going to consist of... Never mind. 

This idea is gaining in popularity. Burials are expensive. The cost of caskets, the plot, the headstone, embalming. Cremation uses fossil fuels that leave a carbon footprint. But as you'd gather, like all new ideas, human composting is controversial. The New York State Catholic Conference calls the idea inappropriate, which is a rather polite response, I would think. They say, "Human bodies are not household waste. We do not believe that the process meets the standard of reverent treatment of our earthly remains". Still, you need to be aware that funerals of the future might involve something different from the past.

SVB fiasco: How will it impact crypto?

Before we go today, I need to add a conversation about what's happening in the world of crypto and related to America's banking scenario: the continuing fallout from the SVB fiasco. One question that has come up is why did Bitcoin rise 25% during the banking crisis of this past week? And what about the story that crypto companies are being shut out of the US banking system?

Yeah, Silvergate was shut down by banking regulators that led to Silicon Valley Bank's collapse. First Republic was threatened with collapse and now Anchorage Digital Bank has announced it's laying off 75 of its staff, despite the fact that its assets are an all-time high. Anchorage Digital is blaming their problem on regulators. The OCC has accused Anchorage Digital Bank of not having proper controls to prevent money laundering. Many in the crypto business community are feeling like the regulators are targeting them and trying to kill their companies by excluding them from the banking industry. If you can't open or maintain a bank account, you really can't operate your business.

When Signature Bank was shut down by New York regulators, a lot of people said New York shut the bank down out of malice and retaliation. The claim is that regulators hate crypto and Signature was serving crypto companies, so the regulators shut it down.

That's what happened with the cannabis companies 10 years ago. Cannabis wasn't legal in many states, so cannabis companies couldn't open bank accounts. Instead of declaring that something is illegal, you just shut them out of banks. That essentially shuts down the businesses without ever actually saying you're shutting them down.

Barney Frank, he's a former member of Congress. You remember him? He's the guy who wrote the Dodd-Frank Act that created tough new banking regulations. He's left Congress and he's now on the board of, you guessed it, Signature Bank. He went on CNBC this week and he was interviewed by Politico. He's been saying publicly everywhere that he thinks regulators shut down Signature specifically because Signature was servicing crypto companies. Here's what he said on CNBC, "I think part of what happened was that regulators wanted to send a very strong anti-crypto message. We became the poster boy because there was no insolvency based on the bank's fundamentals". That was Barney Frank.   

There are so many people making this accusation that it got to the point that Adrienne Harris, the superintendent of the New York Department of Financial Services - that's the regulator that shut down Signature Bank, she had to officially deny the accusation. She said this week that her decision to shut down Signature Bank was not because the bank was serving crypto companies.

And after she made her statement, she had a spokesperson from the Department of Financial Services make an additional statement saying, and I quote, "The decisions made over the weekend were not crypto related. Signature was a traditional commercial bank with a wide range of activities and customers, including small businesses like food vendors, residential mortgage banking, and commercial real estate, to name a few. The Department of Financial Services has been facilitating well-regulated crypto activities for several years, and it is a national model for regulating the space and the bank had significant withdrawal requests over the weekend, which forced New York to close the bank."

His statement went on, "The bank failed to provide reliable and consistent data, creating a significant crisis of confidence in the bank's leadership. The decision to take possession of the bank and hand it over to the FDIC was only made when it was clear the bank would be unable to do business in a safe and sound manner on Monday. The department continues to work with federal regulators, in addition to other officials, to review and fully investigate the events that have unfolded and hold people accountable." 

That's a statement from the New York Department of Financial Services. So what is really going on? Are the regulators, crypto haters? Are they shutting down banks that are doing business with crypto companies as a way of sending a message to all banks not to do business with crypto?

Well, apparently not. Digital Currency Group is one crypto company and it was doing business with Silvergate and Signature. And so it's been looking for a new bank and according to internal memos that have now gone public, Digital Currency Group says they have found lots of banks, big banks that are willing to let them open accounts. This list includes Santander, HSBC, Deutsche Bank, BankProv, Bridge Bank, Mercury, MultiBank, Series Financial and Western Alliance. There are also a lot of banks overseas that are happy to do business with crypto companies, including Revolut in the UK, United Overseas Bank in Singapore and Bank Leumi in Israel.

And that's really the point. If US banking regulators try to kill crypto by refusing to let banks do business with them, they can't kill crypto. All they can do is send the crypto economy overseas. China banned crypto and crypto didn't care. All the Bitcoin miners in China, they simply left China. They went to the US. We created massive numbers of new jobs, good paying jobs, green jobs, all to China's loss. 

But if those Bitcoin mining companies can't maintain a bank account in the US any longer, they'll just move their operations to yet another country and we will lose those jobs and the innovation will occur elsewhere instead of here. We'll lose our leadership position on this new and growing technological innovation.

The same thing happened with stem cell research back in 2001. Remember that President George W. Bush killed funding in a political backlash (stem cells from fetal tissue) against what was then a new technology. Well, that didn't stop stem cell research. It just sent all those US scientists to other countries.

So guess who became leaders in stem cell research for the next decade? Iran. South Korea. Australia. China. Spain. Israel, India, Canada, Germany, Malaysia, Panama, the UK and Hong Kong. They picked up where the US left off. Congress, the White House and state regulators cannot kill crypto. All they can do is send the tech and the jobs and the investor dollars overseas. The US will be the loser, not crypto.

Just look what's been happening worldwide in crypto this week. In the middle of the bank meltdowns and accusations that US regulators are trying to kill crypto companies and the banks that serve them, Australia's Treasury Department and Central Bank met with Coinbase and other crypto companies to work on developing regulations that will allow crypto to operate safely and welcoming in Australia.

So US regulators, make my day. Tell crypto companies they're not wanted here. Go ahead. Shut down crypto banks. The irony is that while you're busy doing that, you're telling consumers that the money they have in banks isn't safe.

So guess what those consumers and investors have been doing? They've been buying bitcoin. Yeah, the price of bitcoin rose 25% this past week because if you own bitcoin, you're beyond the reach of New York state regulators. Your money's available to you 24/7. You don't have to wait till Monday to get your money. You don't have to hope that some government-controlled bank is allowed to open for business. I'm amazed at how narrow-focused and short-sighted some of these banking regulators are. Eventually, Congress is going to overrule them with laws that will stop these Wild West regulators in their tracks.

For now, you really have to ask yourself, which is really riskier - bitcoin or your bank? Oh. One final comment. I've been talking about the stupid behavior of regulators who are trying to kill crypto, but guess who else is being stupid? Some investors.

Just look at what's happened to bank stocks this week. It's even spilled over to brokerage firms like Charles Schwab. Schwab's stock fell 19%. Trading was halted because of the freefall in the aftermath of the Silicon Valley Bank shut down. Schwab wasn't the only one. In fact, there were dozens of bank stocks that fell sharply and had trading halted. Western Alliance, PAC West, Zions, OceanFirst, Customers Bancorp, East West Bancorp, Metropolitan Bank, First Horizon Regions Financial, Comerica Bank of Hawaii, Keycorp, Texas Capital, United Community Bank, Coastal Financial, Huntington.

All these banks had trading halted at one point this week. Investors clearly panicked. They sold their shares at a big loss, out of fear that the nation's entire banking and brokerage system was about to collapse. I can't think of anything dumber than that. Neither can Walt Bettinger. He's the CEO of Schwab. What did he do when Schwab's stock fell 19%? He bought 50,000 shares. I think maybe he knows something you don't. Remember, if you're thinking of reacting in a panic, fools and their money are soon parted.  

Lastly, Jean and I are headed to Dallas today. Jean is speaking at the Barron's Independent Financial Advisor Summit on the advisor's role in helping clients achieve emotional and financial wellness. The audience are a group of selected invited financial advisors, some of the top advisors in the country. It's invitation only. Sorry you can't be there. What you can do, though, is listen to Jean every week, including on her podcast today. Self-Care with Jean Edelman goes live every Thursday at 1 p.m. Eastern. You can listen to all of her shows on YouTube, Apple, Google, wherever you get your podcasts. You can also follow Jean and her podcast on Instagram and Twitter. Check out today's show notes for all the links so you can follow Jean.

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