I sometimes think that we’ve gotten too comfortable in the United States. As long as we can go to the mall, drive our big SUVs, eat good food, download our favorite music from iTunes, pay our big credit card bills and all the other cushy trappings of the American way of life, we can simply ignore the rhinoceros head in the corner.
In recent weeks, there have been a series of articles and commentaries which have taken a hard look at economic reality in this country. They have also provided a basis for why NOW more than ever it’s time to consider creating your own privatized banking system. We’ve divided it into a three-part series so you’ll have time to think about what each author is saying and how it applies to YOU. Here’s reason #2.
Reason 2: The Bigger The Bank, The Harder They Fall
The Dodd-Frank Wall Street Reform and Consumer Protection Act was passed in response to the Great Recession of 2008/9 to:
Promote the financial stability of the United States by improving accountability and transparency in the financial system, to end “too big to fail”, to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.
An April 13, 2016 New York Times article reported that the both the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) both gave failing grades to the 5 biggest U.S. bank’s plans to wind themselves down in another financial crisis without creating panic.
Times reporters Nathaniel Popper and Peter Eaves opening paragraphs offer bad news for taxpayers, consumers and the world in general:
The nation’s top bank regulators have added an unexpected voice to the growing chorus of critics worried that the biggest American banks, nearly eight years after the financial crisis, are still too big to fail.
The Federal Reserve and the Federal Deposit Insurance Corporation said on Wednesday that five of the nation’s eight largest banks — including JPMorgan Chase and Bank of America — did not have “credible” plans for how they would wind themselves down in a crisis without sowing panic.
That suggests that if there were another crisis today, the government would need to prop up the largest banks if it wanted to avoid financial chaos.
With the potential for another inappropriate lending scenario, coupled with the lack of investment in growth industries (see Reason # 1 post), to drive the economy into another major recession – this recent news means that main stream America is in for another big hit.
Why is it that the banks are all making money, while the average American continues to see his/her monthly pay check shrink? They say we are not in a recession and inflation is under control but let me ask you – exactly how far are your take-home dollars actually going?
I remember that just a few years ago, $50 at the grocery might get you 30 or so items. That number has almost been cut in half, as we see the price of basic staples – bread, milk, eggs, cheese, bacon, etc. – continue to rise.
How ready are you for another banking/financial system bailout??
For more information on privatized banking and how you can avoid being caught in the next financial system bailout, contact Julie Ann Hepburn at National Private Client Group today.