Are you considering what to invest in before a recession?
The Federal Reserve recently released a statement insinuating that the banking system remains well-capitalized. They announced that even under the harshest downside scenarios things are going to be good, everything is fine, and there’s nothing to worry about.
However, the Federal Reserve has also communicated that they will be looking to bring about some new restrictions on stock buybacks and bank dividends. At the end of the day this could essentially prevent banks from passing along their profits to shareholders in the market. These are two very different statements and seem to contradict one another. If things are really going so great, and “The banking system remains well capitalized under even the harshest of these downside scenarios. . .”, then why the need for those proposed changes?
If things are so strong, then the Federal Reserve should not have to make changes looking to restrict what banks might be able to do with their own private profits. This sort of confusion coming from the Fed should not be anything new to us, and it’s not the first time they have contradicted themselves.
Earlier this year the FDIC released a video asking Americans not to panic and pull out funds from their bank accounts.
FDIC Chairman, Jelena McWilliams, says that the bank is the safest place for your money, and that the last thing anyone should think about doing is withdrawing because they are worried about the security of it.
When things have “been fine” in the past, there was not full transparency and we were lied to that everything was “going to be okay”. So when the Federal Reserve (and FDIC) are saying there isn’t any need for concern, it might be reasonable to assume that they wouldn’t tell us even if there was.
So I’ll ask again, do you think we’re in a recession currently, or heading back into one? Take some time to really think about it…
There are tens of millions of people who are still unemployed and tons of businesses that are struggling, with so many others that have closed for good. There is a great deal of economic suffering and we don’t seem to be out of the woods yet. We’re also starting to see a second wave of the pandemic happening now, or right around the corner, just as reopening plans have been pursued in most places. Things are definitely not as great as the Fed might try to have us believe.
Remember back in 2008, there were some well known banks that ultimately failed, and we could easily see that same scenario play out again. There is very little transparency and too many problems wreaking havoc within the system. Countries around the world are highly leveraged in debt, and there is massive risk still facing so many as a fallout from the COVID-19 lock-down.
We don’t know the ultimate exposure that banks might face when it comes to risky derivatives and collateral loan obligations. They have got themselves into trouble before and they just might find themselves in a huge mess again with “we the taxpayers” having to clean it up. We are the ones that suffer at the end of the day because of these toxic monetary policies and the debt that the Federal Reserve is keen on fueling.
The bank wants you to trust them with your money, but those who blindly trusted banks before got screwed. There have been times when depositors looked to withdraw funds and were simply told that their money wasn’t there.
This is a worst case scenario for anyone who has a bank account, you’d never expect that your funds are one day not going to be there, especially when you need them the most.
And what happens if everyone looks to go and grab their funds from the bank at the same time? That would be a massive problem that the banks would have to deal with. We could see an economic collapse speed up extremely quickly, especially after all of these years of living on credit and beyond our means, and it probably wouldn’t take long for things to come tumbling down.
If your money is in a bank today, which is just about everyone, then you might want to pay close attention to which banks to trust with your hard-earned savings. When you’re not sure where to turn, keep in mind the safe havens that have been here for thousands of years…
Precious Metals (Gold and Silver) have been considered money for centuries. These precious metals have stood the test of time in being considered valuable, used as a medium of exchange, and recession proof. With all of the uncertainty that banks pose today, precious metals are looking better than ever, and might turn out to be the safest haven for your money when you need it the most.