The One-Chart Summary Of All That Is Wrong With The US Financial System

Posted by freedomforall 1 month ago to Economics
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In other words, by keeping the pedal to the metal on QE, the Fed is giving the banks all the benefits of money creation (soaring deposits), without any of the risks (loan creation in a record low Net Interest Margin environemnt). Any if you are a major US bank - say JPMorgan - you will be perfectly happy with this arrangement and not seek to lend out any money, as the case has been for the past 12 years. Which means consumers who wish to take out loans to fund ventures and other growth strategies are fresh out of luck, because the banks that ordinarily supply them with this risk capital have simply shut down the process as the latest Fed’s Senior Loan Officer Opinion Survey showed.

And that is precisely the crux of all that is broken in the US financial system, and why the Fed's QE is making things worse, not better, and is progressively destroying the wealth of the middle class, stunting any growth opportunities the US may have, and all the residual wealth is pumped into the hands of those benefiting solely from rising asset prices. The result: as we reported last week, the 50 Richest Americans Now Worth More Than Poorest 165 Million...
... and all thanks to the Fed.
SOURCE URL: https://www.zerohedge.com/markets/one-chart-summary-all-wrong-us-financial-system-deposits-over-loans


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