Posted on 03/11/2023 3:47:01 AM PST by EBH
Fortunately, bail-ins do not apply to deposits under $250,000, which are protected by FDIC insurance. That is true in theory, but as of September 2021, the FDIC had only $122 billion in its insurance fund, enough to cover just 1.27% percent of the $9.6 trillion in deposits that it insures. The FDIC also has a credit line with the Treasury for up to $100 billion, but that still brings the total to just over 2% of insured deposits.
If just one or a few banks become insolvent, the FDIC fund should be sufficient to cover the insured deposits (those under $250K). But under the 2005 Bankruptcy Act, derivatives creditors (which are considered “secured”) are first in line to recover the assets of a bankrupt bank; and the Dodd-Frank Act followed that practice. So if a bank with major derivatives risk collapses, there might be no bank assets left for the non-insured creditors; and a series of major derivative cross-defaults could wipe out the whole FDIC kitty as well.
As of May 2022, according to the most recent data from the Bank for International Settlements (BIS), the total notional amounts outstanding for contracts in the derivatives market was an estimated $600 trillion; and the total is often estimated at over $1 quadrillion. No one knows for sure, because many derivatives are “over the counter” (not traded on an exchange). In any case it is a bubble of ominous size, and pundits warn it is about to pop. Topping the list of U.S. derivatives banks are J.P. Morgan Chase ($54.3 trillion), Goldman Sachs ($51 trillion), Citibank ($46 trillion), Bank of America ($21.6 trillion), and Wells Fargo ($12.2 trillion).
(Excerpt) Read more at scheerpost.com ...
“We have had this problem before. The last one happened on October 24, 1929.”
_______
Yeah, some are noticing similarities to 2008, and I was as well, at first. Now, I’m starting to see scary similarities to 1929. Fortunes, big and small, are going to be lost.
“Problem is, will an FDIC bailout even be worth it?”
My view is that Congress must bail out the FDIC as needed.
They have no alternative.
No incumbent Congress-critter wants to be sitting there when the economy crashes and burns.
They will always choose kicking the can down the road.
That said—no currencies or economies last forever.
They all die eventually.
My view is that we are just not there—yet.
“They could boost FDIC insurance to $500,000 on all small and regional banks”
That is the move I would expect. Inflation is already eating away the usefulness of the $250K limit anyway.
“I don’t think any money should be guaranteed.”
In theory I agree with you.
However in practice it will not work with the Homo Sapiens species.
The banking system will collapse immediately—since the modern economy depends on trust—and we know lots of folks cannot be trusted.
As news of SVB’s failure trickles down through the news to reach consumers over the weekend, and those who seldom pay attention to stories of the day, I suspect there will be lines at some banks come Monday morning.
Here is some of the lines from yesterday. It looks relatively small, but how often lately have you seen that many customers in a bank lobby at one time?
Well that’s true. No trust whatsoever in any government agency. They did it to themselves.
Great chart.
My view is that you want your money in the banks with the largest derivatives exposure.
They are absolutely too big to fail—if they fail the entire national and in fact world economy collapses—and your bank account will be the least of your problems.
You do not want to be the bagholder in a smaller bank that can be allowed to fail.
My response, with that sentence above, was meant to reflect if more & more banks start falling into insolvency. The only way FDIC could possibly meet the insurance obligation is for more money to be printed. As more money is printed to pay the insurance obligation, it devalues the worth.
Thus, 250,000 would be nothing more than a hollow representation of its self, a.k.a. worthless.
My view is that Congress must bail out the FDIC as needed.
Well, Congress need not do anything. FDIC must & will payout the insurance. If they do not have the money within FDIC, then that becomes a much different issue, for it raises the awareness that we have a society built upon a sandy foundation, which will have drastic consequences around the world.
“it raises the awareness that we have a society built upon a sandy foundation, which will have drastic consequences around the world.”
I promise you that there is not one sophisticated investor on the planet that does not already know “we have a society built upon a sandy foundation”.
They don’t believe the lies—they never have.
I sense some tongue-n-cheekness, however, great way to look at things.
Yes, but out of epic failure of fiat currency comes a brighter day.
NESARA/GESARA.
If what you said were true, we would have never become a powerful nation.
In fact, until 90s we were a rock solid nation built upon a firm foundation. For that foundation was built upon the belief in the Lord. The erosion of the belief in the Lord is what created the sandy foundation. That erosion began in earnest in the 50s and progressed slowly until the 60s where it picked up more steam, and is now all but evaporated.
But I do see signs of a regeneration beginning to occur, because people are finally starting to see what the consequences are, when the human experience is devoid of the Lord.
People are awakening. While we still have a long way to go, the first steps are being taken.
“I’m starting to see scary similarities to 1929.”
I am also but the biggest I see is this fantasy a few people being able to get their money out of the bank is going to support an economy. Those people won’t be able to get things shipped if there’s no gas or trucks and all the dominoes behind that. Cash will be incidental as the stores and businesses won’t have any either to supply products or services as important as for food, clothing, and heat for the home.
And speaking of heat, if our dollar deflates enough with this delusion of printing more paper to cover the same dollar twice, even Russia won’t be able to sell US natural gas and our prices for food, petroleum and other major exports has got to go up. And it will inflate the world into a financial disaster and wars to try to stay in the hunt for living. And again, it isn’t a first.
When the Great War began, the U.S. economy was in recession. But a 44-month economic boom ensued from 1914 to 1918, first as Europeans began purchasing U.S. goods for the war and later as the United States itself joined the battle. And the ‘29 failure wasn’t settled until after WWII. Besides, where are the waring nations going to buy the gas to run the tanks? When you have lemons...
And again, can someone remind me of how much weaponry we’ve sent to the Ukraine? Lemons.
wy69
If you believe in that. Most people probably have no clue what that even means, so for their sake I will let them know what you are saying.
National Economic Security and Reformation Act = NESARA
Global Economic Security and Recovery Act = GESARA
Or sometimes referred to as:
Global Economic Security and Reformation Act = GESARA
National Economic Security and Reformation Act was a suggested economic reform put forth by a private citizen, Harvey Francis Barnard, during the 90s. The proposals were to abolish income tax, replacing it with a national sales tax. Getting rid of compound interest on secured loans and returning fiat currency to being backed up by precious metals as it originally was. There were other suggestions as well, but that was the main meat of it.
Global Economic Security and Recovery Act was just a sort of extension added to deal with nations beyond the U.S. (Like that would ever be accepted)
Sounds a lot to me like "The Great Reset" being put forth by the world's elites. Main difference is that the elites would reap all of the benefits, and the peons of the world, you & me, would have nothing and will supposedly be happy, under "The Great Reset". While some peons would get screwed, and other peons would be rewarded under the NESARA/GESARA scenario.
The peons rewarded would be those who consistently lived well beyond their means, while those who lived within their means would be screwed by having lived within their means.
The latter would end up with less toys, lesser accommodations & transportation modes, in other words.
If we went back to the fiat currency being backed by precious metals, the problem now is that we do not have enough gold & silver to cover all of the fiat currency in circulation, in this country, let alone the world. Back when it was originally suggested it might have still been possible, but would have come with many pains as well.
So, while you may try put a positive spin on it, the reality comes far from coming up as roses. Bottom line, is it will be extremely painful, and will not be limited to just the U.S. either.
I only wish your positive thinking could be the reality. I sincerely do. But reality sucks sometimes, and it will suck unfairly as it usually does as well. There are too many examples to know that there is no soft landing.
This is why I believe they are trying to start WWIII, as it provides the only way to exact the pain and cover up their sins & crimes in the process.
Any solution “great reset” like involves more fiat. That could be a CBDC, which if fiat will not solve anything for peons like you and I.
A PM-backed solution in my book is “great awakening” like, and a necessary means to begin to address a great many evils that we face - the debt being 120%+ of GDP, stolen elections, naked short sales on wall street, the evils of fractional-reserve bankstering, the crimes of the non-federal bankster-run FED.
In the “great awakening” arena as stated above, NESARA/GESARA is the means to accomplish the above.
The system as we know it is completely opposed to NESARA, and has put out lots of rationale to make it appear evil. Typical of the left to denigrate to prevent things opposed to their agenda.
While I will agree with you on that point, as well as, that money must be tied to precious metals for it to have any real value attached to it. But it was taken off of the PM standard because it made growth much harder. It limited the ability to expand the economy. So, it was good in some aspects, but also very dangerous in other aspects.
The worse thing that could happen, did. Politicians realized they could use that expansion of easy money to their personal advantage, and they didn't hesitate to do so.
Going back to precious metals now, creates the same inability to grow economically unless vast reserves of PM are uncovered, or the list of precious metals expands with, oh I don't know rare earth minerals. But that would entail digging up the earth to find & mine them.
You see, there are no more really easy choices for politicians, once runaway inflation began to take hold, becoming even harder to regain control of it when you are so buried in debt that was recklessly not addressed when it could have been addressed with far less pain.
They kicked the can down the road, and now the can has become hard to kick because it has eroded so much over the years of being kicked down the road.
That is why they want WWIII. It's their only way out. Less people down the road, and if we can win we obtain the spoils.
But even more foolishly, they have eroded our military capabilities along the way also, because they were taking bribes from the elites to deliver this country to them, for their one world governmental wet dream.
In short, we have been ruled by idiots. Donald John Trump was the only one who intervened in the insanity for the sake of the people, which is why they had to steal the election. It never ceases to amaze me the number of people on this board who still fail to see that fact.
That will help consumer confidence, but I doubt it will be sufficient for business’ confidence.
Businesses or anyone with more than $250k in an account, has got to be thinking about taking the excess out and spreading it to other banks
I think the Federal Reserve needs to announce that it will loan funds against any long term Government bonds to insure bank liquidity. Or just buy up those bonds as necessary.
I think that would go a long way to eliminating any panic.
They need to seriously look at ways to shore up banks that are having runs, without takeovers. I think it would be far less disruptive and less expensive if they can do that.
There are plenty of PMs to anchor a new PM-backed financial system.
As for concern about the quantity of metals above ground, I’ll submit to you that there are a LOT more metals than we’re publicly told, and that a key part of NESARA/GESARA is to move towards “1955 prices”, before the bulk of the runaway inflation we have experienced of the last 80 years.
Many CBs have been voraciously “stacking” gold, including BRICS+++ nations.
Yeah, but how about us?
I’m all for us, not necessarily “joining” BRICS+++, however becoming BRICS-like, PM-based financial system and jettisoning the FED, banksters, fiat, fractional-reserve bankstering.
If we do, we might as well be a BRICS member.
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