With all due respect, I disagree with PythonicCow. And, his advice is neither helpful nor applicable. First, it is internally inconsistent. If the FDIC is going to be overwhelmed, the $ 100K coverage won’t help. So limiting deposits is useless.
And, this type of doomsday argument has been set out every few years for as long as I remember (late 50s till now). The market adjusts and no one can predict all of the things happening between now and the so-called second reset. If folks sell their homes on the normal sale cycle, most of these mortgages will be long retired before becoming due. And, the adjustments of even several hundred dollars can be dealt with from changes to other family habits. If I smoke now, I quit. If I had a boat, the kids are older now and they don’t use it, so I sell it and drop the payment.
He is not “spot on”. And, I submit we all show up here ten years from now and prove it. Will it be simple? No, it never has been simple. Will it be his “revolution” to replace the government? No. That isn’t even an idea worth discussing. Dig in, work hard, be smart. Trust the One who is really running this whole thing. Forget Chicken Little.
May our paths cross in ten years; I hope that you're the one proved right. But I am arranging my affairs for the contrary.
For some, it will be more than a few hundred dollars per month. Alot more.
“If the FDIC is going to be overwhelmed, the $ 100K coverage wont help. So limiting deposits is useless.”
If FDIC is depleted would not the feds provide funds for insuring up to 100K? In this environment I believe maintaining anything over that amount in any one bank is taking undue risk.
I don’t subscribe to a doomsday collapse or revolution but do believe the unwinding of this credit bubble will be painful to many or at least a reduced standard of living for a period of time.
Your points are well taken especially trusting in The One who runs the whole show.
The FDIC was overwhelmed with the S&L crisis. The government gave them the money to pay out insured accounts and not one penny was lost on an insured account. That will happen again. So your statement, “If the FDIC is going to be overwhelmed, the $ 100K coverage wont help. So limiting deposits is useless,” is proven false by the actual history of FDIC becoming insolvent. History will repeat.
I’m curious to know your view on the current liquidity crisis and I would appreciate it if you would answer one question.
Do you agree that this is the worst US financial crisis since the Great Depression, and if you do not, then what was the worst US financial crisis since the Great Depression?