“Banking System Urgency: Deposits Now Override Loans”
April 21, 2021
“There was a remarkable disclosure in the latest JPMorgan earnings report: the largest US bank – an entity that historically has best been known for making loans to the broader population – reported that in Q1 its total deposits rose by a whopping 24% Y/Y and up 6% from Q4, to $2.278 trillion, while the total amount of loans issued by the bank was virtually flat sequentially at $1.011 trillion, and down 4% from a year ago.
In other words, for the first time in its history, JPM had 100% more deposits than loans, or inversely, the ratio of loans to deposits dropped below 50% for the third quarter in a row after plunging in the aftermath of the covid pandemic:
An even more stunning divergence between total deposits and loans, emerges at Bank of America where deposits similarly hit a new all time high of $1.88 trillion, even as the bank’s loans have continued to shrink at an alarming, deleveraging (and deflationary) pace and are now at $911 billion, below their level during the great financial crisis: in other words, there has been 12 years with zero loan growth at Bank of America!…
The above also explains why even as the Fed has pumped trillions in reserves into banks, which by transformation have ended up as deposits on bank balance sheets, the velocity of M2 money has plunged to an all time low (and will soon drop below the fractional reserve system singularity of 1.0x), as loan demand is nowhere near enough to offset the Fed’s forced deposit creation which incidentally ends up not in the economy but in capital markets, resulting in broad deflation offset by asset price hyperinflation...”
https://gsiexchange.com/banking-system-urgency-deposits-now-override-loans/
You know I have a theory about the leading currencies around the world. (the top 4 or 5) I think they will never be allowed to enter hyper inflation because things like real estate would be immediately paid off. This in no way benefits banks. Because of this I think every recession or depression we see will end in the result of deflation for the average person. In general banks benefit from the public being in debt. Removing that debt in first world countries will never be in the interest for banks. Basically what I’m saying is no matter how the economy implodes financial institutions will figure out a way to leave the average person with as much debt as possible.