From Birch Gold Group
Donald Trump caused a stir on Monday when he said he’s considering a breakup of Wall Street’s biggest banks. Assuming Trump is serious about this, and assuming he succeeds in breaking up the big banks, it would drastically change the financial landscape in America.
With that in mind, it’s important that you know how the change could affect your savings strategy.
No More “Too Big to Fail”
On the campaign trail, Trump promised numerous times to reexamine Wall Street regulations.
Now it looks like he’s attempting to make good on that promise. Significant deregulation by dismantling the notorious Dodd-Frank legislation passed under Obama is already on the table. But a new regulation could be around the corner too.
There’s no official news yet, but Trump says he’s considering new rules — mainly a “modern” version of the Glass-Steagall Act — that would keep banks from being “too big to fail.”
What does that mean exactly?
Well, the Glass-Steagall Act was passed in 1933, and it prohibited banks from combining their commercial and consumer operations. As a result, it kept banks smaller and prevented them from gambling the financial security of average Americans on their commercial investments.
But Glass-Steagall was repealed in the late 1990s.
Can you guess what happened? It led to the emergence of the massive mega banks that landed us in our last financial collapse.
Banks were allowed to become “too big to fail.” By letting them put commercial investments in the same bucket as consumer investments, they became ticking time bombs.
That’s why the government was forced to bail them out. Americans’ savings were held hostage. Without the bail out, these megabanks would’ve taken down consumer investments along with their bad commercial investments.
With this stated intention to reinstate Glass-Steagall, Trump’s message to big banks is that he won’t let that happen again.
But how will that impact average Americans? Is it all good news?
What Could Go Wrong
It’s a mixed bag for the financial sector. On the one hand, Trump wants to drop regulations by scrapping Dodd-Frank. On the other hand, he could put the squeeze on big banks by bringing back a new incarnation of Glass-Steagall.
At first, it seems like there’s no way this could be bad for Americans. Rolling back Dodd-Frank could stimulate growth, and beefing up banking regulation should keep Americans safe.
But there’s another possibility…
Removing the regulations provided by Dodd-Frank could make it easier for Wall Street to start playing with fire again. And bringing back some form of Glass-Steagall could be Trump’s way of saying he won’t stand for another bailout when things go south next time.
They say that the road to hell is paved with good intentions. Trump’s heart might be in the right place, but these policy changes could be setting us up for yet another crash. And if the government does nothing for banks during the next crash — as Trump’s comments imply — it could be far more damaging than 2007-08.
During that last crash, when the government did intervene, gold and silver continued to climb higher.
What if the government doesn’t intervene next time? Things could be even worse for the markets, and even better for gold.
If you don’t already have some of your savings in precious metals, years from now, hindsight may ultimately prove this a great time to do so.
Birch Gold Group helps Americans protect their savings with physical gold and silver. Clients can purchase precious metals for physical possession, or move their IRA or 401(k) into a Precious Metals IRA. To learn more, request a free Info Kit on Gold – there is zero cost and zero obligation to you. All you need to do is enter your details at www.birchgold.com
The right and proper move is to audit, then abolish the Federal Reserve with a followup of charges for their trillions of dollars in theft and illegal activities. Once they are out of the picture, followed by the abolition of the crime of fractional reserve banking, the big guys will fall away in short order. Their monopoly, just like every other, is ONLY maintained by the presence of the federal government protectionist system.
Mac liberty ,and most importantly there would be no need for the Damn IRS. At least not the way it’s structured now.
It’s just a pitch to get you to buy gold-not a bad idea. but the banks will crush him like a bug.
This, like every other ‘new version’ of old laws is nothing but a con. See, like the original tax form back in 1900, simple is always better. With every complication comes the guarantee that someone, somewhere is getting a hand out. The ‘new’ tax system, created and modified a hundred times, has turned in to nothing but a confusing mess of nonsense, that most people have to hire an entire, billion dollar industry every year just to understand. And even those tasked, and paid handsomely to understand, very rarely do. Why? Because, in reality, the tax code is just a collection of complicated ways to hide theft, grift and giveaways to industries that can pay for lobbyists to make sure they get exceptions that the people don’t understand are exceptions, because of the complication. The original Glass – Steagall act was very simple. Essentially, it worked for 80+ years because of it’s simplicity. If you were Goldman, you had to use your own money. It was that simple. If you failed, then you bankrupted yourself, and you lost. I GUARANTEE the new ‘version’ of Glass – Steagall will only be rammed through to the sheeple as that in name only. Just so people can identify and support it. It, like Obama Care will be a machination of at least 2000 pages, that will spell out (and carve out) every conceivable way for a bank like Goldman or Chase to screw you over, but do it in a way that is so complex that they will be able to do it, and you won’t even realize you have been scammed. I have zero hope for this whatsoever. Does anyone with critical thinking skills actually believe that an organization (US Government) that is literally bought and paid for by the industry funding every single war since WW II is going to all of a sudden just say – sorry, no more fun, and take away the punch bowl? Yea, right. Not likely. You have better odds of driving down to the local gas station and winning the Powerball this morning – by finding the winning ticket on the ground by the front door.
It’s going to crash anyway – it can’t NOT crash. Too many idiots made too many bad bets, thinking they were smarter, tougher and better-informed than reality. Sorry, everybody, reality wins – reality ALWAYS wins, and we are too overspent / underinvested to carry on like we have.
Blame Trump, he’s trying to fix it, sort of. Blame Pelosi / Dodd / Frank / Clinton / Obama / Geithner /Bernanke / Yellen & Co. ( I view that list as interconnected / interchangeable); they failed to fix it when they could (it would just have crashed then instead of now).
Blame Bush / whoever his Treasury secretary was / Ryan / McConnell / Mnuchin / Greenspan & Co. (I’m tired of naming suspects) because they failed to fix it when they could have (same as above).
But you really should be blaming Goldman Sachs / J. P. Morgan Chase / every Wall St. charlatan you have and haven’t every heard of, because THEY bought the politicians who gave it to them, and still are; and when it does, finally, crash to the ground and start burning THEY will be the ones who insist they are innocent, unaware and unconnected to the plunder they achieved.
Clawbacks are in order, for the next ten generations (if any of the bankers live that long).
James, I understand your sentiment, but ‘blaming’ all and sundry solves nothing. IMHO the problem is the system itself. Given that individuals will act in their own best interest, then if the system allows, the individual will use all means to gain advantage. For example, you say, in effect, that the mega banks have bought the politicians – correct – but how? The system has allowed this to happen and because Congress is part of it, they are not about to change it – turkeys don’t vote for Xmas. Same argument for most of what’s wrong with the system. As I see it, we all have a clear idea of how to solve the problems but have no way of invoking a radical change to the system; they are all avoiding to even look at the problems.
So, where to from here? Just as the Air France airbus crashed because the pilots where looking in the wrong direction so too will this system crash and then a new replacement will emerge: See Jim Rickards: “The Road to Ruin” and his idea about ICE9