Private Lending: The Next Financial Crisis? + Gold at a Special Discounted Price
A new kind of lending called private credit is now making headlines- and not for the right reasons. Once praised as a smart new source of profit, it’s now raising alarms among analysts who see troubling similarities to some of the financial crises in the past. Private credit refers to lending by unregulated financial institutions to subprime or riskier companies- borrowers that often can’t obtain traditional bank loans. It has surged in popularity as investors search for higher returns and businesses seek easier access to capital. But history shows this may be dangerous. In 1929, excessive margin lending helped inflate the stock market before its crash and in 2008, bad mortgage-backed securities were the main cause of the housing market crash. Similarly, private credit is lending large sums to risky companies outside traditional regulation, creating the potential for widespread defaults that could affect the whole financial system. Moody’s is raising alarms that banks now have roughly $300 billion in exposure to this growing sector. Recent failures, including auto retailer Tricolor Holdings and auto parts manufacturer First Brands Group, have prompted JPMorgan’s CEO Jamie Dimon to caution that these may be the first “cockroaches” of a broader problem. Could private credit be the next trigger for a financial crisis?
Meanwhile Bank of America analysts remain optimistic about gold’s long-term outlook, predicting prices could reach $5,000 per ounce in 2026 despite the recent pullback below $4,000 per ounce. In its latest report, the bank noted that gold’s sharp rally this year, over 60% year-to-date and briefly above $4,300 per ounce, has been driven by a mix of global economic uncertainty and market volatility- conditions in which gold typically thrives. It’s emphasized that the current correction is normal compared to past bull markets since 1970 and expect prices to climb again once they stabilize. Bank of America encourages investors to diversify their portfolios with 60% equities, 20% bonds, and 20% gold.
This week Goldline’s Deal of the Week offers you the opportunity to purchase PCGS or NGC graded MS-65 1924 $20 Saint Gauden gold coins at a special discounted price. Please note, we only have a small batch of these gold coins and they are likely to sell out quickly.
Call 800-827-4653 to take advantage of this deal.
Below you can find news that may be influencing your investment decisions.
