The following excerpt from the latest Bloomberg Businessweek seems to signal a stimulated economy.
Deposits in banks … soared 15 percent last year, to $3.9 billion, after rising 27 percent in 2011, according to preliminary data from the Federal Reserve Bank of Minneapolis. “By any standard, deposits are exploding,” says Ron Feldman, senior vice president for supervision, regulation, and credit at the Minneapolis Fed.
The surge has attracted investors and developers eager to meet the rising demand for housing, retail, entertainment, and other services. Since 2009 the number of new businesses has grown by almost 50 percent …, according to Federal Reserve data, compared with 5 percent growth for the rest of North Dakota and 3 percent nationally.
For rural banks, where agricultural loans remain a mainstay, that’s brought a gusher of out-of-town customers such as Mark Bragg, who moved to North Dakota from Palm Springs, Calif., less than two years ago. Bragg is planning the largest mixed-used development in Watford City, a $250 million project spanning 320 acres and featuring apartments, hotels, single-family homes, offices, and a shopping center. “California is in such financial trouble,” says Bragg, president of Bakken Housing Partners, which has loan proposals pending with First International Bank and other lenders. “I had to go somewhere else, where they are welcoming the economic activity.”
At McKenzie County Bank in Watford City, where the lobby walls are decorated with clients’ hunting trophies—bear, deer, and buffalo—people come in the door almost daily, looking for loans for projects ranging from hotels to auto repair shops.
Is this the result of government spending? Of course not.
The North Dakota setting probably gives you enough information to determine the true source of the economic stimulus. If not, you should know that filling in the first ellipsis in the quotation above provides a valuable piece of information: Deposits soared in banks “with branches in the Bakken shale region.”
Yes, this real economic stimulus results from fracking.
