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| Points 4 & 5:
The capital in our bank remains at about 13% or 14% of total assets depending on the time the year it is. That is an extra measure of safety cushion that we can offer our depositors if there is an economic downturn as the statutory guideline is 8%. We have made bad loans from time to time, but overall our delinquency ratio in the whole bank including those loans that have been originated and sold the Freddie Mac is at .5% whereas the national average is 3% of so. Basically, we offer sound practices to protect our customers. Understanding finance, what is sound, who is performing sound banking practices, are all factors that you should know when choosing where to place your money if you no longer trust the system. Do you understand your bank’s capital position? Do you understand their loan performance? Do you have faith that your bank’s management is more than just paper-pushers who merely adhere to the current status quo in banking? You can check out your bank’s health here:
http://research.fdic.gov/bankfind/
We are at the mercy of the FED and the politicians when it comes to confiscation practices such as printing money, the Cyprus debacle, etc. Our bank has solicited the regulators to include Gold as a tier one bank asset. That request has been denied to date; however, it has been given serious consideration. I am convinced that some type of Gold standard will be offered up when and if our banking system loses all credibility due to the current trends. I am proud to say that I have probably advised more relative customers to include Gold holdings in their personal asset holdings than any other banker I am aware of and I have also shown them personally how to do so (after hours).
I believe your locally owned commercial bank is still the soundest manner to transact business. That is why I can can still come to work each day and do my work despite all the problems we are discussing in the banking world. More than that, is provides income for my family just as the family farm likely does yours. Privately owned local capital that creates loans, develops communities, creates money via the loan creation mechanism, protects depositors wealth in my mind is much preferable than anything else being offered. It can certainly be improved upon with the creation of a Gold backed monetary system. Frankly, the very weakest aspects of the our banking system are those mechanism that are associated with governmental based lending such as Freddie Mac, AIG, GSL’s, TBTF banks that are in basically bed with the government/politicians, Rural Development, FHA, CRA mandates that appear to sacrifice safety and soundness to better promote an unrealistic egalitarian society, etc. Bubble and market inefficiencies are the result of such practices that to not put personally owned capital on the line for each and every loan decision that is made.
Edited by Iowegian 3/26/2013 10:06
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For Iowegian and others Re: Banker conversations.
