A few weeks ago, CNBC ran an article talking about what they are predicting to be a booming economy. According to JP Morgan Chase CEO Jamie Dimon, U.S. consumers are ‘coiled and ready to go’. He mentioned that consumers have $2 trillion more now then they did before the pandemic, they have paid down their debts over the last year and are now ready to start spending again because they have so much money in the bank.
This all sounds really good but is it? Are we entering a booming economy or are we about to enter a major financial meltdown similar or worse then we saw in 2008?
On the surface this sounds really good. I mean who doesn’t love a booming economy. But if you look slightly below the surface you will discover something very concerning and the signs are pointing to another crash worse then we saw in 2008. The signs are all pointing to this house of cards to come crashing down in the near future.
Overall consumer debt may be down but so are loans. Consumers are depositing that money in the bank, but are taking out fewer loans. The amount of loans that are being taken out has dropped so low that it is now lower then it was before the 2008 crash.
Banks need to loan this money out to make their money but no one is buying these loans. So all of this money that the Federal Reserve printed is now just sitting there. So what are they doing with all of this money? Since no one is buying these loans, they are pumping it into the stock market? That sounds like a good idea (me in my sarcastic voice).
JP Morgan Chase has also announced that they are going to cease all small business lending until the PPP funding is exhausted. Commercial lines of credit normally equals $1 trillion per year because businesses take out these 30, 60 or 90 day loans to pay payroll. This year that will be less then $100 billion. JP Morgan is telling you to just get the money from the government because government is now just giving the money away.
The banks are guaranteed 6% return for making PPP loans. They aren’t loaning to small businesses because they are guaranteed 6% return on these PPP loans. If someone doesn’t pay these PPP loans back, the bank isn’t on the hook. The government is, meaning YOU.
What is currently happening with the banks is unprecedent and severely dangerous. Never before have banks been able to make this amount of money while not selling loans.
I think there will be a short boom and probably a melt-up in the markets. The economy is going to look great…for a short time because of all of this money suddenly flooding in the system. But it’s not going to last and then things will crash quickly.
You need to get your financial house in order, now! We are headed for serious problems soon and the dollar will collapse. Make sure that you have your money in a safe bank for when this all comes crashing down and it will come crashing down at some point. Get away from the major banks and move your money into a local or regional bank. I would recommend spreading your assets out between a few banks so that you aren’t in a position where you lose everything if your bank does fail. Back some of your dollars with gold and silver so that you have something of value when the dollar collapses. Get your financial house in order before this collapse begins because as we have seen in history, when bubbles pop they pop fast.
I would also recommend food storage so that you have one less thing to worry about when things get tough because tough days are coming. I am proud to be able to welcome them as a new sponsor but this is a company that I have spent thousands of dollars with over the past six or seven years. Make sure that you are prepared for what is coming.
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