Posted on 03/17/2009 12:10:07 PM PDT by arthurus
We all should be painfully aware by now that there is nothing held inside the Social Security and Medicare trust funds but a bunch of IOUs. Monies collected from payroll taxes are treated as general revenues and used in the “unified budget.” But how many of us are aware that the FDIC’s Deposit Insurance Fund works in a similar fashion?
(Excerpt) Read more at seekingalpha.com ...
The FDIC is a sham. There’s no way the government can guarantee deposits up to $100,000 if there were a nation wide bank run.
Then again there is the printing press...
ping
It'll be interesting to re-visit the Social Security issue in light of this whole Porkulus thing - just thinking ahead...
And how about the drain ille - er, I mean 'undocumented immigrants,' put on society? Etc.
Pay no attention to the man behind the curtain!
What man? All I see is a giant skunk.
Temporarily $250,000.
And even if it stays that high, that just worsens the FDIC’s problems by that much more.
The number is 50 trillion give or take a few trillion which is the real deficit when you add ALL of the government obligations. Obama must be on crack if he thinks he’s going to cut the real deficit in half.
The fact that the US Treasury gets cash for the T Bills is irrelevant. It sold bonds it gets cash and wastes the cash on stupid government programs. At no time is the FDIC balance sheet without cash or marketable T Bills. Good thing they don't invest premium proceed in sub-prime mortgages!!!
Run those presses too much and hyperinflation will make the dollars worthless.
I thought they had upped it to $250,000 - still can't cover it but it sounds better.
It’s temporarily up to $250,000.
That’s just going to make the problem worse. I would imagine that those with $250,000 accounts will be the first to get their money out since they probably follow finance more than the average person. The FDIC doesn’t have the money to physically back these accounts up. The fact that it is now $250,000 means that money will get taken out of the system even faster should there be a run.
Milton Friedman called the creation of FDIC the most important legislative innovation of the Depression.
Gotta leave it to the dims ..... they've got all bases covered.
Nam Vet
The FDIC makes an unsound institution look sound. When banks pyramid with a 10% reserve requirement, there is no institution that can bail them out in the case of a massive bank run, except the printing press, and that will completely destroy the value of the currency.
The FDIC is only required to have something like 1.85% (maybe even lower) of total deposits backed. If there were a serious crisis and people withdrew their money thinking it was safe, there would be panic when the FDIC ran out of money. Currently I think the percentage has fallen below 1%. There’s nothing the FDIC can do in the event of a major bank run.
Given that Odumbo the Marxist Imbecile in Chief is a... Marxist, I have to wonder if he wouldn't view that as a positive (if he were to actually see it, which I doubt, given that he seems to be blind to nearly everything going on around him).
For the record, the FDIC’s current insurance fund ratio is 0.40% of all insured deposits, and the minimum is 1.15% as mandated by Congress.
The very benefit of FDIC is that its mere existence serves to discourage bank runs. There is no point in withdrawing funds covered by it. Do you think that Friedman and Schwartz failed to understand FDIC weaknesses that you perceive?
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