We clarify the picture for you to make the best decision.
In addition to the current inflation and instability in the countries of the Americas, there is also a financial factor that adds to the doubts of citizens, whether they have experience in investments or not.
Jim Powell, the Federal Reserve chairman, said this week, just before raising U.S. interest rates another 0.25%, that he would like to have a painless way to fight inflation, the problem is that there is no such way.
The collapse of banks in the US has been in the news recently. Apparently, it involves two mid-sized banks in the U.S., so what’s really the big story here?
The truth is that the failure of SVB and Signature Bank is just the tip of the iceberg. The Federal Deposit Insurance Corporation (FDIC) estimates that U.S. banks have lost approximately $600 billion in “unrealized losses,” and it’s time to explain what it’s all about.
An “unrealized loss” is a loss that occurred “on paper” but has not yet occurred in real life.
We will give an example to explain what it means:
Let’s say you bought a share at a cost of 100 units per share and the share price dropped to 90 units. In fact, you have not lost money because you still own the shares and, in practice, their price can go up again, but “on paper” you lost 10 units because the value of the shares decreased.
Banks invest in bonds and stocks. If their value increases, banks make a profit, but if their value decreases, banks lose money, and if people panic and decide to withdraw money from the bank (in herd behavior, as happened with SVB borrowers) the bank runs out of cash flow and has to sell its holdings at a loss to recover money for customers who want to withdraw their money from the bank.
According to the leading business daily “Financial Times”, the following happened.:
The collapse of SVB (the largest bank to collapse since 2008) and significant damage to the financial strength of Credit Suisse created a ripple effect that affected all U.S. banks.
Wall Street’s six largest banks lost about $165 billion in the last month, a loss that represents about 13% of the banks’ combined value.
CityGroup and Morgan Stanley banks suffered a decline in the value of their securities.
The value of Bank of America’s stock is at a two-year low.
How does it really affect us?
In practice this does not only affect banks.
It affects you, your family and your investments.
If this happens to several banks at once, it will create a big problem for the economy, and if you have money in bank deposits, you are not sure it is the safest place to keep your money?
To get out of the crisis they have to print more money to help the banks recover the money and, in fact, the value of your money goes down.
We are at an economically critical point, and if economic events spread and expand to other banks, we are on the threshold of a global economic crisis….
So, what should you do with the money?
Take the available cash flow and invest it in the production of real estate assets that will generate more cash flow!
This is exactly the time to think smart and invest your money in a place that will maintain its value and even increase it over time.
U.S. properties have been and will continue to be the best option.
This is the time to learn how to maintain your investments and increase your capital, especially in a time of economic uncertainty.
Do you want to invest in profitable real estate projects that increase the value of your capital?
Schedule a meeting at Your Real Investment and see how with smart investments over time you can increase the wealth you have and not depend on an economic situation or any other situation.
