By Justin Spittler
I recently received a disturbing email.
It came from one of the smartest and most respected analysts I know. All it said was “Ugly…”
Below the ominous message was a series of charts. I couldn’t believe what I saw.
These charts prove that the U.S. banking system is in serious trouble.
I’ll explain what I mean in a minute. But you first have to see these charts for yourself.
As you’ll see, we may be in the early stages of a major banking crisis.
If you own any stocks, bonds, or real estate, I encourage you to read this Dispatch closely. It may be the most important piece of research we’ve shared all year.
• Let’s start by looking at those charts…
The first one shows the percentage change in commercial and industrial loans over the last five years.
When this line is rising, it means the growth rate for commercial and industrial loans is picking up. When it’s falling, loan growth is slowing.
You can see that the rate of commercial and industrial loan growth has plummeted since the start of 2015. It is now less than half of where it was two years ago.
• You don’t have to be a banker to see that this is a serious problem…
Businesses borrow more money when the economy is doing well or likely to get better. They borrow less money when the economy is weak or likely to weaken.
This makes a lot of sense. After all, you wouldn’t take out a huge loan if you thought the economy was going down the toilet. You would borrow less money.
And that’s exactly what’s happening right now.
Companies are borrowing money at a far slower rate than they were a couple years ago. This could mean business owners are worried about the future. It could even mean that the economy is careening towards a cliff.
• Unfortunately, that’s not the only indicator screaming danger right now…
Look at the chart below.
It shows the percentage change in loans and leases issued by commercial banks. When this line is falling, it means banks are issuing new loans and leases at a slower rate than they did a year ago.
You can see that this line started plunging towards the end of last year. It’s now at the lowest level since 2014.
• Here’s another “ugly” chart…
This one shows the annual rate of change for real estate loans.
Like the two charts above, you want to see this line rising. It’s a bad sign when it’s falling.
Unfortunately, that’s what’s going on right now. Real estate loan growth has slowed to a crawl.
• Consumers are also borrowing less money …
You can clearly see this in the chart below.
Just like commercial, industrial, and real estate loans, consumer loan growth has plummeted in recent months.
The email I received contained three more charts like this. I could share them with you, but I think you get the picture.
Banking activity is stalling.
If this continues, the U.S. economy is going to have BIG problems.
That’s because credit is the oil that runs the economy. When credit is flowing, the economy fires on all cylinders. When it dries up, the economy can grind to a halt.
• This is the kind of situation that could go from ugly to downright gruesome almost overnight…
And there’s little the Federal Reserve could do to stop it.
After all, the Fed is already holding its key interest rate near zero. It’s trying to flood the economy with cheap credit.
But this “stimulus” measure isn’t working like it has in recent years. Consumers and businesses simply aren’t borrowing as much money.
This is a serious matter. But the mainstream media has barely said a word about this. Maybe they don’t know what’s going on. Or maybe they’re ignoring it.
• In any case, you shouldn’t wait until this is front-page news to take action…
You need to protect yourself today. Here’s how to get started…
Lighten up on bank stocks. You should especially avoid regional banks if you can. These lenders make most of their money issuing loans. So, they could have serious problems if consumers and businesses continue to borrow less money.
Own physical gold. Gold is the ultimate safe-haven asset. It’s held its value through every sort of financial crisis. It’s also one of the only assets that can rise when stocks, bonds, and real estate prices fall.
If you haven’t already, I encourage you to buy some physical gold today…while it’s still cheap.
You see, gold is already up 11% this year. And it’s now at its highest level since just before Election Day. This tells us investors are more nervous than they’ve been in months.
If you already have 10% to 15% of your money in gold, good for you. You’re in a much better position than most investors.
Delray Beach, Florida
April 12, 2017
We want to hear from you.
If you have a question or comment, please send it to [email protected]. We read every email that comes in, and we’ll publish comments, questions, and answers that we think other readers will find useful.