(Mises)—Bank CEOs always have their heads in the clouds. First, pessimists never earn a seat in the corner office. Plus, it takes a good-sized ego to climb to the top of a bank bureaucracy. A person running a bank believes they can sail the ship through any stormy economic weather.
Take John Allison. He’s the chairman of a bank holding company, Home BancShares. He told the Wall Street Journal about a time when the regulator of Home BancShares, the Federal Reserve, was badgering him to slow down on real-estate lending in 2019. “They’re telling us the construction lending space is going to blow up . . . and the world is coming to an end,” Allison recalled. “And I said, ‘You know what? I don’t see it.’”
A CEO I worked for was pithier when the regulators sang the same tune about his bank’s growth. “What do you want me to do, close at noon?” he said. A decade later his bank failed.
Mr. Allison’s Home BancShares is the holding company to Centennial Bank, based in Conway, Arkansas, which is a “big funder of developers building luxury skyscrapers in New York and Miami. Construction loans are among the riskiest types of real-estate lending,” report Shane Shifflett and Konrad Putzier for the Wall Street Journal. “If the big, bad wolf shows up it will hurt a lot of banks, but it won’t hurt Home BancShares,” Allison said in a recent interview.
It’s hard to imagine a bank in Conway funding big deals, or at least pieces of big deals on tall buildings in places like New York and Miami. But how much loan business can there be in Conway? And you can tell from Allison’s quotes that he’s a guy who wants to grow his business, so his bank went where the loans were. This isn’t It’s a Wonderful Life, and Allison isn’t George Bailey.
Shifflett and Putzier tell us banks smaller than $250 billion in assets held about 75 percent of all commercial real-estate loans as of the just completed second quarter of this year. These banks (like Allison’s) accounted for nearly $758 billion of commercial real-estate lending since 2015, or about three-quarters of the total increase during that period. That loan volume pushed up commercial real estate prices by 43 percent from 2015 to 2022, according to real-estate firm Green Street.
While Mr. Allison figures his bank is bulletproof, commercial property sales in July were down 74 percent from a year earlier, and sales of downtown office buildings hit the lowest level in at least two decades, according to MSCI Real Assets. “When deal volume picks up, deals will be made at far lower prices, which will shock banks,” said Michael Comparato, head of commercial real estate at Benefit Street Partners, a debt-focused asset manager. “It’s going to be really nasty,” he told the Wall Street Journal.
And then there’s coming maturities. Each of the next five years has $400 billion to $500 billion in loans coming due, with many of these projects being uneconomic (or underwater) at current interest rates, not to mention higher rates.
Of course, Mr. Allison may not be aware of, or refuses to believe, this bad news because real estate developers are as optimistic as bank CEOs, or more so. The developer tells his loan officer everything is going to be okay and talks about leases that will never be signed and other rose-colored vignettes. The loan officer relays to his or her department manager the happy news, which trickles up to the bank CEO who wants to believe everything he or she touches will turn to gold. No big, bad wolf is gonna blow CEO Allison’s bank door down.
But as Murray Rothbard wrote in the Mystery of Banking, “Fractional reserve bank credit expansion is always shaky, for the more extensive its inflationary creation of new money, the more likely it will be to suffer contraction and subsequent deflation.”
A bank’s loans may be on big, tall buildings, but fractional reserves make any bank a house of cards.
About the Author
Douglas French is President Emeritus of the Mises Institute, author of Early Speculative Bubbles & Increases in the Money Supply, and author of Walk Away: The Rise and Fall of the Home-Ownership Myth. He received his master’s degree in economics from UNLV, studying under both Professor Murray Rothbard and Professor Hans-Hermann Hoppe.
Bypass Big Tech Censors
Why Bullion Beats Numismatics and Collectible for Your Safe or IRA
Precious metals continue to attract Americans seeking reliable ways to protect their wealth amid inflation, geopolitical risks, and stock market swings. Whether stored in a home safe or held inside a self-directed IRA, physical gold and silver deliver tangible value that paper or digital assets often lack. Yet investors must choose carefully between bullion—pure bars and coins valued mainly for their metal content—and numismatics or collectibles, where rarity, history, and collector demand heavily influence pricing.
Advisor Bullion serves as a dependable source for straightforward, high-quality bullion. The company specializes in physical gold, silver, platinum, and palladium, emphasizing transparent pricing and products that deliver maximum metal content for every dollar spent. This approach makes it ideal for both personal holdings and retirement accounts.
Bullion consists of refined precious metals in standard forms like one-ounce coins (American Gold Eagles, Silver Eagles, Canadian Maple Leafs) or bars. Their value tracks closely to the current spot price of the metal. A typical gold bullion coin trades near the live gold spot price plus a small premium. This structure keeps costs clear and predictable.
Numismatic coins and collectibles add substantial value from factors such as age, rarity, minting errors, or historical significance. A pre-1933 U.S. gold coin or graded proof piece can carry premiums of 30%, 50%, or even 200% above melt value. While this appeals to hobbyists, it creates complexity. Pricing depends on subjective grading, collector trends, and auction results instead of daily spot prices.
For investors focused on wealth preservation and retirement security rather than building a collection, bullion often delivers better results.
Lower Costs and Better Liquidity for Home Storage
When keeping metals in a home safe or private vault, liquidity and efficiency count. Bullion offers clear benefits:
- You acquire more actual gold or silver per dollar invested. Numismatics divert a large share of your money into rarity premiums and massive sales commission, reducing your metal exposure.
- Selling bullion involves tight bid-ask spreads, so you recover nearly full spot value with minimal fees. Collectibles require finding the right buyer and may sell at a discount if demand for that specific item weakens.
- Bullion prices remain transparent and update with global spot markets. You can track gold near current levels or silver accordingly and know exactly where your holdings stand. Numismatic values are priced by the Gold IRA companies with hefty margins applied.
- Standardized coins and bars store efficiently and divide easily for partial sales. Rare coins often need protective slabs and controlled conditions, adding hassle and expense.
- Bullion enjoys worldwide acceptance. A 1-oz Gold Maple Leaf or Silver Eagle sells quickly to dealers anywhere. Niche numismatic pieces may appeal only to limited buyers, slowing liquidation when speed matters.
In times when quick access to value becomes important, bullion’s simplicity stands out.
Stronger Fit for Precious Metals IRAs
Precious metals IRAs continue gaining traction as investors diversify retirement portfolios beyond stocks and bonds. IRS rules permit certain bullion products in self-directed IRAs if they meet purity standards (.995 fine for gold, .999 for silver) and are held by an approved custodian. Eligible items include American Gold and Silver Eagles plus many generic bars and rounds from recognized mints.
Numismatic and most collectible coins generally face heavy scrutiny from custodians due to valuation disputes and elevated markups. These higher premiums mean less actual metal ends up working inside the account.
Bullion avoids these issues. Its value links directly to verifiable spot prices, which simplifies reporting and lowers the risk of regulatory challenges. More of your IRA contribution purchases real metal instead of dealer profits or speculative upside. Over time, owning additional ounces that appreciate with the metal itself can create meaningful outperformance compared with high-premium alternatives that deliver fewer ounces.
Regulatory guidance from the CFTC and state securities offices repeatedly cautions against aggressive sales of expensive numismatics or “semi-numismatic” coins for IRAs. For retirement planning, transparent bullion from established providers reduces risk and aligns better with long-term goals.
How to Get Started with Bullion
Begin by clarifying your goals. Are you protecting savings in a safe, or moving part of a retirement account into a precious metals IRA? Focus on the number of ounces you can acquire at current prices rather than chasing marked-up collectibles.
Diversify sensibly: use gold for core preservation and silver for its blend of industrial and monetary qualities. Mix coins for easier divisibility with bars for lower per-ounce costs on larger buys. Arrange secure storage—whether at home with proper insurance or through professional facilities.
As economic uncertainties linger and faith in conventional assets erodes, bullion continues proving its worth as a dependable store of value. Its direct approach avoids the hype that sometimes surrounds collectible markets and keeps the focus on the metal itself.
For investors prepared to strengthen their portfolios, Advisor Bullion supplies the expertise and selection needed to acquire high-quality bullion efficiently. Whether building personal holdings or integrating metals into an IRA, their emphasis on transparent, investment-grade products helps secure more ounces today that support greater financial security tomorrow. In a complicated financial landscape, bullion’s clarity and reliability make it the smarter foundation for protecting what matters most.