More Signals of Economic DEFLATION: Wells Fargo will be shutting down all existing personal lines of credit in the coming weeks – July 12, 2021,
Although the mainstream media is trying to frame the Wells Fargo line of credit closure around the fact that some people’s credit scores will be affected, the truth of the matter is the reason why Wells Fargo has to legally state this is because there were enough people who had their lines of credit MAXED OUT and were probably already taking advantage of any available debt servicing deferral available to them.
Now, the long-term outlook for the U.S economy based on the proposals of the Joe Biden administration looks dire at the moment. I’m an optimist, so who knows maybe things will work out great, but the EMPLOYMENT numbers at present look horrible, and Democrats have already proven that when their policies fail they blame the private sector. Joe Biden ran on taxing the rich, not only did Joe Biden run on taxing the rich, but Joe Biden also ran on a climate change agenda, which is ANTI-CONSUMER and pro-big-business and big government.
Labor unions have this slogan which goes something like this, if you can’t afford the union wage, you don’t deserve to be in business, in actuality that’s a corporatist slogan, labor unions love big government and big corporations because there’s more for them to extort, but if you’re a financial institution and you’re noticing the DEFLAIONARY cycle we’re headed towards, I’d say it’s smarter to cut your loses and focus on where the money is going.
Unless interest rates are going to rise, Joe Bidens going to have to keep sending Americans checks to keep the economy afloat, which means a lot of people applying for lines of credit as well as people with existing lines of credit, probably won’t have a job That’s a lot of future risk for Wells Fargo and because of this new carbon credits fraud, if I were a bank I’d shift my capital in the direction Joe Biden throwing the most money.
The truth is the loans should be reserved for business people only, consumer loans are a horrible idea because the entire purpose of a loan is to grow your business. Consumer loans are in many ways DEFLATIONARY because a lot of the people in CONSUMER debt don’t have the business acumen to multiply their money.
Now that Joe Biden is openly paying people not to work, more and more people who have existing consumer debt are taking Joe Biden up on that offer. Regarding the Wells Fargo line of credit lowering some people’s credit scores, I assume a lot of people are going to default on their Wells Fargo lines of credit and I also assume Wells Fargo has already sold off that debt to a third party.
I forget which credit card it was, but a credit card company some years back, had some financial difficulties and simply forgave all the debt on their customers’ credit cards, meaning all the people with that credit card had their debts forgiven. I suspect Wells Fargo even if they sell or already sold the debt to some company probably won’t care if the debt is paid back.
But to incentivize people to pay back the Wells Fargo line of credit I assume Wells Fargo made that statement in hopes some people will pay back the loan to save their existing credit scores. This could be a one-off event, Wells Fargo has had problems in the past, but it wouldn’t surprise me if more financial institutions begin restructuring their business models to cater to big business, because the Federal Reserve and the Federal Government have backed themselves into a corner in which all they can do is incentivize commercial banks to lend out money.
Now, if I’m a commercial bank, I’m not lending money to consumers, my lending would be reserved for businesses, because if this virus and lockdowns problem makes a comeback, as a financial institution most of my consumer debtors will have the support of the government not service their loans payments.
Furthermore, a lot of consumers don’t have to return to their jobs and can’t be discriminated against for being unemployed during a pandemic. I’m not entirely sure why Wells Fargo didn’t what it did, but I suspect they see where the economy is heading and they’re simply cutting their losses.
Wells Fargo tells customers it’s shuttering all personal lines of credit | cnbc.com
Interesting times ahead!