The Great Cashtration

Rising rates + Basel IV = Cashtration [Altucher Confidential] May 08, 2023 [WEBSITE]( | [UNSUBSCRIBE]( There’s a one-two punch coming for the economy a la Basel, Switzerland. [Hero_Image] The Great Cashtration By Chris Campbell [External Advertisement] [Cancer shocker] Cereal for breakfast? There’s a city in northern Europe where cancer rates are [4X LOWER]( than they are here… And researchers have traced it back to [what they eat for breakfast.]( See what this popular cereal can do to cancer cells right here: [1 common breakfast cereal reprograms cancer cells?]( The cancer-fighting secret in this cereal used to be on every breakfast table in America…until it was abandoned for something more “convenient.” [See it here.]( [Chris Campbell] CHRIS CAMPBELL Dear Reader, Cashtration - a term that sounds far from innocuous. And for good reason. [ALC] The Fed’s rate hikes, of course, are a form of cashtration. Those with variable-rate loans, like credit cards and adjustable-rate mortgages, are taking the brunt of the hit -- like a punch in the gut from Mike Tyson. Consider, the average credit card interest rate is now over 20%, an all-time high. At the same time, a record 36% of US adults now have more credit card debt than savings and 73%(!) millennials say they are living paycheck to paycheck. [ALC] Compare that chart above to this one of a year prior, January 2022. (H/t to @KobeissiLetter on Twitter for the charts.) [pub] Meanwhile, the mortgage market has gone buckwild. The average rate for a 30-year, fixed-rate mortgage is now 6.5%, up from a mere 3.25% a year ago. The auto loan market is definitely feeling the burn, too. The average rate for a 5-year car loan now is 6.9%, up from 4.5% not too long ago. The interest rate on federal student loans? It’s already risen to 5.0% for the 2023 academic year, and any loans taken out after July 1 will be higher still. But that’s not all. There’s a one-two punch coming for the economy a la Basel, Switzerland. Have you opted-out of the radical democrats “green new scam”? If you live in any of the following 43 states… [Click here to learn more]( You need to [click here and prepare for Biden’s next attack on American patriots.]( Cashtration 2.0 In the next three weeks, the Federal Reserve will be releasing information on new Basel IV regulations and guidelines for the banking system. As you may be aware, Basel is a term commonly used to refer to a collection of international banking regulations called the Basel Accords. These accords are named after Basel, the capital of Switzerland and the location of the Bank of International Settlements (BIS). The Basel Accords set out a framework of regulations for banks to ensure their stability and prevent financial crises. The regulations cover areas such as capital requirements, risk management, and supervisory practices. Basel III was introduced in response to the global financial crisis of 2008 and was intended to improve the resilience of the banking system. The next set of regulations, Basel IV, are coming down the pike. Though Basel IV regulations are set to be implemented in the US in 2025-2027, banks will be scrambling to adapt to these regulations the moment they hit. And though there’s an emphasis on “global systemically important banks” (GSIBs), all US large-cap banks will be affected One way Basel IV could affect the economy is by making it more difficult for small and medium-sized businesses to obtain credit. The proposed changes would require banks to hold more capital in reserve, regardless of the actual risk of their loans. This could mean that banks have to charge more for low-risk loans, like mortgages or loans to healthy businesses, to make up for the extra capital they need to hold. And while this may not sound like a big deal, the consequences could be vast. Many businesses, especially small and medium-sized enterprises, rely on these low-risk loans to keep their operations running. Families looking to buy their own homes could also be affected. Zooming out, the end result could be that large banks and financial institutions will face additional pressure to consolidate and merge in order to meet the new capital requirements. And smaller banks and credit unions will inevitably struggle to compete, leading to a further concentration of power in the banking industry. But this consolidation won’t just happen in the banking industry. In fact, James has been anticipating 2023 as a blowout buyout year… And he’s putting the final touches on a way for readers to get ahead of the curve for massive potential profits. Stay tuned for more to come this week. Until tomorrow, [Chris Campbell] Chris Campbell For Altucher Confidential --------------------------------------------------------------- Attention! 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