The International Monetary Fund, or IMF, has issued a frightening new report warning that a third of biggest banks in the world are so weak, that their problems could not be solved even by a recovery and rising interest rates. In other words, nothing can save the banks. The IMF’s report makes it clear why the banks are failing: the Fed’s zero-interest-rate policy has killed bank profits. And this time, the Fed and Treasury don’t have the ammo to bail out the banks when they collapse. So if you want to protect your savings & retirement before the next banking collapse, you better act now.
The Global Banking System Is in Deep Trouble
According to the IMF’s shocking new report, about a third of European banks, with $8.5 trillion in assets, and a quarter of U.S. banks, with $3.2 trillion in assets, are “too weak to recover.” “Too weak to recover” is regulator-speak for “doomed.” Yes, the IMF is warning that a third of the world’s major banks are doomed.
And why are they doomed? Because weak bank profitability has emerged as a key challenge that won’t be solved by a cyclical recovery. In fact, European banks are earning less than half their 2004-2006 average profits.
Why is this happening? In part, because the global economy is in the tank, regardless of what politicians and Wall Street cheerleaders keep telling us. But also, because central bankers have imposed zero interest rates and negative interest rates on the world which have killed bank profits. The banks simply can’t earn enough money from loans with interest rates being so low.
The other problem – which is hard to sympathize with – is that the pitiful banksters simply aren’t allowed to do all the exotic types of gambling they were doing prior to 2008, which earned them a lot of money. That is, until the whole Ponzi scheme came crashing down and we were forced to bail them out.
Can Anything Be Done to Save the Banks?
The IMF report calls for urgent and comprehensive action, stressing that reform, especially in many European countries, “can no longer be postponed.” What reform are they referring to? For one, they’d like to see interest rates rising again. But with the global economy in the tank and central banks scared to death to raise interest rates, don’t count on rising rates anytime soon.
The IMF would also like to see world governments weaken regulations on the banks – the same regulations slapped on banks only a few years ago to prevent them from taking down the entire global economy again!
So think about it. We’re faced with two frightening options: let the banks fail and endure another global economic collapse, or let the banks return to the casino and take down the world economy again. That’s one hell of a choice.
And what happens if we do nothing? The IMF warns, “In some cases, weak banks will have to exit and banking systems will have to shrink.” That’s such a nice way of saying “a huge segment of our global banking system will collapse and take down the world economy!”
What Happens When the Banks Fail?
The writing is on the wall, and even the IMF sees it: the banks are going to fail. It’s not a matter of if, but when. And the scary reality this time is that the Fed and Treasury no longer have the ammo to bail out the banks when they do fail.
The Fed already spent trillions bailing out the banks a few years ago, and the Treasury has already pumped up our national debt to nearly $20 trillion in a desperate effort to save the economy and the stock market. There is simply no ammo left to fight this war. Our economy is doomed.
Act Now While You Still Can
The good news is, you don’t have to go down with the banks this time. Get a portion of your savings & retirement in the one asset class that thrives when the global financial industry tanks: gold & silver.
We all remember what happened the last time the global banking industry came crashing down in 2008. Gold DOUBLED in the years after the crash, while silver increased over 5 times during the same period!
So protect your savings & retirement now, before you have nothing left to protect.