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How the Banking Collapse will Affect You and Your Finances with James F. Locke #5801 · Financial Survival Network

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  You were listening to Carrie Letts's Financial Survival Network, where you get valuable information
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  you just can't find anywhere else to thrive in today's trying times. You need
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  the Financial Survival Network now more than ever. Go to Financial Survival Network dot
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  com and get your free newsletter and gift. Financial Survival Network now more than
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  ever, and welcome. You aren't listening to watching the Financial Survival Network,
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  I'm your host, Carrie lets Well. Federal Reserve has a created turmoil in
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  the banking sector, and the turmoil inevitably is going to spread to the broader
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  economy. We just had the second largest bank failure in the United States history.
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  I would just qualify that by saying the second biggest bank failure where the
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  government actually took over and auctioned off the bank. We've had other larger failures
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  where the government just bailed it out, but everybody wants to forget about that
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  and with us now. Is James F. Locke financial expert at Pool Locke
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  and you find him at Pool p O O L E L O c k
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  E. That's too ease where you wouldn't have expected them. And hey,
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  if you got a question where James or myself just shoot us an email k
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  l at Kerreltz dot com and James so bank banking collapse, banking failure,
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  banking turmoil. What does that do to you as an investor trying to line
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  up a retirement, trying to get to the promised land, and all these
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  obstacles are falling in your path. Yeah, the banking failures is it's a
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  difficult one because you and I say, when you're in the industry, you
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  look at these things, you're diving into them a little deeper, and we
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  see these as real risks. Right. A lot of times people that are
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  just let's just say, walking the street with their four oh one k say
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  the bank isn't going to fail or the government's there behind it. And yes
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  they are to a degree, and that's that's actually very very important. But
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  I don't think people realize exactly how dangerous it is when you start taking these
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  banks, especially such as big you know, as what we've had, and
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  consolidating them. Now, every time there's a problem in the future, it's
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  it's exemplified that much more, right, it becomes worse and worse. And
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  like you said, this is uh, you know, banks, banks fail
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  more than we think right, or at least they have to get bailed out
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  by each other. So something needs to change in order to help everyday people
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  will understand that, you know, we are living in a dangerous time.
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  Yeah, that we are very dangerous to your wealth. This is all predictable.
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  The legislation that was passed to deal with these future bank failures back after
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  the last financial collapse was Dodd Frank. They've basically thrown Dodd Frank to the
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  wind because Dodd Frank said that there would be bail ins and that the depositors
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  would be responsible for bailing out the bank, not the federal government now here.
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  I mean, Dodd Frank was totally idiotically conceived, because look, when
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  you've got a banking system where all the banks are insolvent, the only thing
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  that keeps everybody running to the bank or going on their app to transfer the
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  money out is the fact that government is backstopping, is standing behind it to
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  allow a widespread bank panic. So you know, yelling. She initially stuck
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  to Dodd Frank, and that lasted for five minutes when they realized that,
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  hey, if we don't guarantee all bank deposits, every bank, we're going
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  to have a massive collapse on our hands, a massive banking failure, and
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  nothing is going to stop it, and all the banks will go down.
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  So but the question is can they really stop what's happening now? Yeah,
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  how far will they? Got multiple sides to this too, since you kind
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  of you just talked about the Ellen, you know, just yesterday she came
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  out and said, you know, we're only good on debt until June first,
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  June first, you know what I mean, Like that's insane. So
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  the the the debt ceiling, which you know, knock on wood, the
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  government's going to you know, pass something to raise the debt ceiling, and
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  we have to we have to get you know, from under ourselves in that
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  sense. It's not a Republican Democrat thing. I mean, it's going to
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  have to happen otherwise you know, you're gonna if if we got I mean,
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  heck, you know, back the last time we had you know,
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  a serious credit problem and the US credit rating was dropped. You know,
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  when you kind of do the math that downgrade cost the Treasury, they said,
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  you know, one point three billion dollars you know, because we got
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  downgraded, Like it's like spiding, you know, cutting over your nose despite
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  your face a little bit here. Uh, you know, it's it's it
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  just doesn't make any sense to be shooting yourself in the foot. So we
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  got to like a lot of factors at play here. You got the Federal
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  Reserve, which you know, to be clear, this is all their fault.
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  Right now, I don't I'm saying it's their fault because they're the only
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  one in the position to do anything. And I'll asterix stat because Congress can
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  do a lot, but they just don't. But the Federal Reserve has one
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  bullet and it's gone, and that's raising interest rate, and it's going to
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  keep firing it. And you know, they pushed it up so much that
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  we've seen you know, three banks fail and that's really the bottom line.
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  Now, the banks clearly could have had better leadership, you know, even
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  better oversight loosely speaking, but at the end of the day, this was
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  caused by the federals as unprecedented ramming up of interest rates so fast that you
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  know, the banking world couldn't handle it. And in fact, just today
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  you now have lawmakers coming out and saying, hey, Fed shouldn't raise rates
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  tomorrow, right, which you know, If I'm a betting man, I
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  love it. They're raising rates tomorrow. It's going up a quarter point baked
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  in the cake, it's baked in. Yeah, I would be shocked if
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  they didn't raise rates. If they didn't raise rates, it means that there's
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  really there's actually some problem. Right, And if they raise rates more than
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  a quarter percent, all hell's going to break the loose to the downside,
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  you know, I mean, and it'll settle eventually. But essentially they're trying
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  to tell the Fed, Hey, like this is what it sounds like.
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  It sounds like the Congress is okay with inflation and wants to avoid a recession
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  at all possible costs. Right, Yeah, well that's why the FED runs
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  the money supply. At least your theory they did, right, But you
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  know, whether that's the case or not. We could debate that it's supposed
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  to be removed from all politics, but we know about that. But so
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  quarter points baked in. But if they'll do the quarter point because there's no
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  risk to it. Basically, when they got to start cutting, they got
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  that much more to work with, right, Yeah, let's hope that the
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  language. You know, they're going to be very careful in the language that
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  they speak, and you're probably it's probably gonna I would imagine it to be
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  mixed in. Some people are saying, you know, maybe we're going to
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  slow down, but we're going to be quick to jump in if we find,
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  you know, numbers show that you know, there is you know,
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  too much growth in the economy and things like that. We're still trying to
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  cool this off. Yeah, and so you know that I'd be surprised if
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  they come out and be like, yep, job's done, everything's perfect,
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  you know, then that would be the stock market will star rally and something
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  fierce. But you know they're not going to say that, that's for sure.
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  And what's interesting is in history, if you go back and look at
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  all the times the Fed has kind of reached their number and basically said,
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  okay, we reached on number, we feel things are pretty good. It
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  doesn't always mean that stocks rally, you know, historically speaking, you know,
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  you don't you don't always see that. And we've been looking for clearer
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  signs of a slowdown and easing inflation to kind of justify the end of this
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  rate increase. But what could end up happening is the dreaded stagflation. Right,
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  So now you're going to have slower growth combined with that inflation content continuing
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  on. And Congress is okay with that because they just want to spend money,
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  right, And that's why I say this is all fed created. Yeah,
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  but it's only because the Congress, the one who really controls everything.
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  If they could cut spending, that would actually play a much bigger factor than
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  Federal Reserve with their you know, silver bullet of interest rates. Right.
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  All right, Well, it's going to be interesting to see how where they
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  finally end up on this, but I think at some point basically the end
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  of the rate hikes are going to be there. Look, if they hadn't
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  stuck to the transitory inflation thing that was a problemity to year earlier, easy
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  enough to paper off the mortgage backed security purchases and doing a quarter quarter twenty
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  five basis points every other month, right, would have been a gentler curve
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  and we'd be in the same place where we are now. But the market
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  would have been able to adapt to it. Yeah, that they had happened
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  slower, right, you know, we have you know, we're we're all
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  emotion here, it's all it's all, oh my god, inflation's out of
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  control. We need to do something. And then all right, we gotta
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  take interest rates up on precedented levels. And you know, there's pain,
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  there's pain that's happened, and we're seeing it in the banking world. We
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  still don't know that we're out of the woods yet, doubt it. Yeah,
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  but there will be a Hey, who knows, maybe in six weeks
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  they'll have to cut rates by a whole percentage point or one and a half.
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  You know, if they get desperate, what else can they do?
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  Yep, that's the only that's the only bullet they have in their in their
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  chamber, right, That's that's ultimately the problem. That's why I said it's
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  more than everyone looks to the Fed to solve the problem. But if if
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  Congress could, you know, adjust their spending, that would actually be a
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  bigger a bigger change to the economy for sure. And you know, if
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  the if the Fed does cut rates later this year, which you know,
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  there's still some some numbers out there saying that we're going to see rate cuts
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  in twenty twenty three, you never know, but it's it's coming. It
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  has to, you know, this can't continue. This way forever. I'm
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  a surprised you know, you know, you would not surprise me anything.
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  Nothing surprises me at this point, James. So when we talk next month,
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  what do you think the landscape is going to look like then? Assuming
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  the language comes out neutral, which I I think the FED has to kind
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  of hedge their bet on that. So we're going to raise a quarter point.
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  That's you know that's going to happen. So assuming the language comes out
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  in neutral, um, I have no reason to believe that this stock market
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  can go up based on the FED being neutral, right, So it's really
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  going to be We're gonna have to wait and see what CPI comes out.
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  So we continue to have inflation under control, and we're probably going to continue
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  to bounce around in this kind of SNP range, you know, thirty eight
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  to forty whatever, forty two or something like that until we come out of
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  the earnings season and all that and and see, you know, hey,
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  our company is actually making money. What's the strength of the dollar doing.
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  We still have a complete lunatic over in Europe with a war, right Like
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  that's a that's a you know, unknown variable there with with putin and all
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  that. Good about the lunatic here. You know we're talking. There's enough
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  to go around, right, Uh yeah, I mean, like I said,
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  just just just today, Congress is telling the Fed you know, what
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  to do, and you know, I wish, I wish the Fed would
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  tell Congress sometimes. You know, maybe they will one day, but not
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  today. Right, Yeah, I don't see any change in in thirty days.
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  We're going to continue to float sideways. We have to get more definitive
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  information on what's happening with our economy where the dollars floating, and you know,
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  what's happening with interest rates because because excuse me, with inflation, because
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  if inflation continues along and continues to drop a little bit, well then you
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  know we're going to start moving towards you know, maybe interest rates dropping a
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  tiny bit, right, and they're being a more predictable pattern of of economic
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  growth. All right, Well, Hey, we appreciate your input here and
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  your opinions. James, as always, and again the site to go to
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  is pull lock that's full with Ane Lockwinne dot com. And if you've got
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  a question for James myself, shoot me an email al at carry Lutz dot
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  com and James, we'll talk to you again in June. Thanks Carry,
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  thanks for listening to Carry Letts's Financial Survival Network, your solution to today's trying
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  times. For the latest, go to Financial Survival Network dot com. Financial
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  Survival Network now more than ever,