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Like The Great Recession? Banks Raising Lending Standards

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EDITOR NOTE: The author’s point below seems to balance on a single point (which we phrase in the form of a question): Should banks be more accountable to shareholders or their customers? Banks tightening the credit spigot has less to do with survival than it does with sustaining profits. Meanwhile, everyday people and small businesses are having a hard time getting loans. The author below calls for a new financial infrastructure. We won’t argue against that per se, but shouldn’t everyone have allocated a portion of their assets to money outside of the system (gold and silver), so as to not get stuck as a result of the system?

Traditional finance is dead. Let it die.

There is absolutely no reason that you should have to wait for the money that you need in a global pandemic. Especially if you’ve spent your time and emotional capital building relationships with financial institutions only to get the cold shoulder when you actually need them. Why does our $20 trillion society joke about banks only loaning money to folks who don’t need it? It’s funny until it’s true for you and your family — when someone has a serious health problem or the breadwinner loses their job.

Banks are already tightening the spigot on credit even though they have received billions of dollars to lend. The Federal Reserve has even promised to limit bank risk on these loans. Banks continue to sit on the money and raise lending standards, just like they did during the Great Recession.

I think we can also agree that $400 per week for the rest of the year from the federal government is not enough. Trump was smart enough to step in front of Congress with an extension on the eviction ban and a payroll tax holiday. People still have to pay their bills at some point, though.

A New Financial Infrastructure

Fortunately, we have a new financial structure that is rising to replace the old. Up and coming companies realize that people are opting out of the traditional nonsense. We are all tired of the horror stories of filling out hours of paperwork and waiting for weeks to get the wrong answer.

Even though we are in a pandemic, financial liquidity has never been stronger. The stock market seems to be just fine, with the NASDAQ now at all-time highs. The Fed has promised to do anything to prevent a depression, including buying corporate bonds (read: bailing out failing companies) and keeping interest rates as low as possible (read: bailing out banks and rich borrowers).

But how can you get your hands on some of that liquidity? Banks seem to make it their business to keep it from you. What is the end-run around the greed of the traditional financial structure?

Originally posted on Yahoo! Finance

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