Ø If all the bank loans were paid up, no one would have a bank deposit, and there would not be a dollar of currency or coin in circulation. This is a staggering thought. We are completely dependent on the commercial banks for our money. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money, we are prosperous; if not, we starve. We are absolutely without a permanent monetary system. When one gets a complete grasp upon the picture, the tragic absurdity of our hopeless position is almost incredible – but there it is. It (the banking problem) is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it is widely understood and the defects remedied very soon. – Robert H. Hemphill, Credit Manager of the Federal Reserve Bank of Atlanta
Trump’s words of advice are if you have the money, this is a great time to buy a home or condo. Home prices are low but they are rising, which means great things for the housing market.
As for commercial real estate, Trump believes that the government needs to step in and tell banks to loosen up on their standards for people looking to build commercially. Without more commercial business development, the economy will remain stagnant. Without growth, new jobs won’t be created, which will further inhibit the job market.
While Trump has some solid points in his remarks., you have to think about the Bank’s point of view. Due to the recent recession, many of the Banks are still living in fear of what might happen again. Since Commercial Real Estate is giving Banks the shakes, many of the Banks are reluctant to lend…and the Regulators are being exceptionally tough on lending standards.
What do you think? Are the Banks being too cautious? Do we need more Government intervention?
I suspect that a good percentage of very successful Developers would NOT be approved for loans today.
I welcome your opinions…..America’s Real Estate for the most part has been built on a risk-reward basis. ( Credit To Home Space)
Enjoy Your Day!