All they need to do to have the cash on hand is print money, which is EXACTLY what they will do.
Get your cash outa the bank.
If your bank is on the problem list you sure might want to do that.
So how do I protect myself?
My immediate concern, should the FDIC find itself short of cash, is that it will simply turn from dragging its feet on closing banks to dragging its feet on paying out depositor claims. This means that if you have money in a failed bank, it could be tied up for quite some time.
Here’s the advice I gave last year when I wrote about the FDIC:
Do not keep more than $100k in any one bank account (okay, no genius insight there…)
Always keep 1-2 months worth of basic living expenses, in cash, out of the bank but in a safe place. This way, if the banks close down, the ATMs aren’t working, and checks won’t clear, you’ll still be able to go on with things as the crisis gets resolved. And don’t worry; you won’t be losing much in the way of interest payments on that cash.
Be prepared to run, not walk, down to the bank to remove your funds if the bank looks like it’s going down. Being one step ahead of the legal machinery could save you a lot of anxiety, if not your money. Here I would keep a sharp eye on the bank’s stock price, because that will give you the earliest possible warning. The FDIC is notorious (and for good reason) for keeping mum about a troubled bank prior to seizing the assets.
All banks are NOT created equal. Only keep your money in a Blue Ribbon bank (as rated by Veribanc in their Blue Ribbon Report ) or in one that is rated “B+” or higher by TheStreet.com. If need be, separate your holdings across several banks to assure your risk is not overly concentrated. Also, just ask around – some banks play a riskier game than their local brethren, and knowing who’s who could be a real life saver.
Another great place to check on your bank is to see if it appears on this unofficial list of troubled banks maintained at Calculated Risk. If my banks were on that list (I use several, all highly rated, to spread the risk), I would switch to a different (highly rated, naturally) bank.
You might also want to read my prior report on the FDIC, because it covers the legal language from the FDI Act, which unequivocally states that depositors may only be paid from money that exists within the insurance fund (which is now depleted).
http://www.chrismartenson.com/blog/fdic-broke-now-what/25274
http://www.chrismartenson.com/martensonreport/how-safe-my-fdic-insured-bank-account
RE: “All they need to do to have the cash on hand is print money, which is EXACTLY what they will do.
Get your cash outa the bank.”
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And put cash WHERE?????? I am too old for stock market and don’t trust it anyway. Don’t know much about gold/silver etc. or how it is purchased or even how safe THAT is.
What to do with savings???