The CEO of JP Morgan, Jamie Dimon, said the U.S. banking crisis is not over, that it will linger for years, and that America is moving into a “vicious cycle.” NTD speaks to Vance Ginn, the president of Ginn Economic Consulting, for analysis.
Ginn points to several factors that contributed to this. Those are years of low-interest rates, liquidity injected by the Federal Reserve, and excess spending by Congress which adds a lot of treasury securities debt into the marketplace.
This is passed on to the banks, he says, and to get a higher rate of return, the banks were taking riskier investments. This creates a boom period but it also leads to a bust, according to Ginn. He warns of more bank failures as a result, in addition to a prolonged period of economic slow growth and a recessionary period, which could hit Americans hard given inflation and fewer jobs in the marketplace.