I Don't Mean to Alarm You, but....

[Lowsix Profile]

The risk here is not the FDIC running out as the prime problem..it would be the consumer run on the banks which devalues further the bad assest/loans the banks are holdings which makes their health weaker which causes more bank failures. And yes a consumer run on the banks would crash the country..and the markets...andthe finacncials (the overseas dollar) so the wave would grow.

NOT that this WILL occur, but that it can, based SOLELY on the confidence people have in the FDIC to protectlarge deposits. And of COURSE they can tap into the treasury, but guess who pays that? Us, just like the stimulus and bank bailouts..we (or rather our children) will be paying this off for a LONNNNNG time....

NOBODY really understands that in practical terms yet, because prices havent shot sky high, nor have taxes..and they will..

Sorry i didnt indicate specifically what the threat was about this situation.
The FDIC is not the Federal Reserve however...

Oh and yes PAtriot, great points,

i misread parts of that..that is EXACTLY the threat..the Debt OTHER countries hold..They are all in a ginat Mexican Standoff right now..first one that blinks and sells dollars will be the only winner.. EVERYONE else gets raped..

[Lucidlemondrop Profile]

What ever happened to that deal with Lee Wanta? Was that just a smokescreen? Has it been resolved, does it somehow play into this scenario?

[Stone069 Profile]

Any good ideas on where to move to? Seriously, maybe a deserted island. At least there i will have control of my own destiny. If all of a sudden I stop posting come visit me somewhere in the carib........close to Jamaica man, your all welcome, except end0fall. (he won't like our cigarettes)

[Lucidlemondrop Profile]

Any good ideas on where to move to? Seriously, maybe a deserted island. At least there i will have control of my own destiny. If all of a sudden I stop posting come visit me somewhere in the carib........close to Jamaica man, your all welcome, except end0fall. (he won't like our cigarettes)

Hahaha! Now that was a good one!

I would like to move somewhere in the ozarks USA.....lots of people off the grid there, bartering and so forth seem to be a way of life, but then they don't take to kindly to strangers!

Maybe Fiji?

[Woodgod23 Profile]

This starts Happening I am moving way way way up north where the trees are 100,000 to 1 human.* Reminds himself to double check the cupboards*

[Stone069 Profile]

Well ozarks are still in US, I am still very proud to be American, even if I am not proud of American government. Still, I may feel safer the further I go. Figured a deserted islend would be a government of ....... Me!!! Anyway I do not mean to lead this thread off topic as it should be an interesting one.

[Lucidlemondrop Profile]

Well ozarks are still in US, I am still very proud to be American, even if I am not proud of American government. Still, I may feel safer the further I go. Figured a deserted islend would be a government of ....... Me!!! Anyway I do not mean to lead this thread off topic as it should be an interesting one.

yeah, and I don't think low would have posted it if there wasn't reason for concern, he isn't what i would call an "alarmist" by any means.

[Nelusmc Profile]

If a bank holiday takes place what are the chances of things getting ugly?

[Drextin Profile]

When you expect things to happen - strangely enough - they do happen.
JP Morgan

"A bank run is a self-fulfilling prophecy. As the probability of bank failure increases, more depositors seek to withdraw their money and fewer lenders are willing to loan short term funds to the bank."
Keith Yost, MIT

one of the top business stories of the day is talking about the presence of foreign banks buying up failed us banks which will cushion the blow to the fdic. Until recently the fdic had balked at this but realizing the potential of letting foreign banks in good standing in america put up the capitol instead of the fdic issuing claims money they have relaxed their concerns paving the way for more foreign banks to bid on the failed ones.

I found it funny that the story is by vox day. Let's take a closer look at vox shall we?

Real name: Theodore Beale
Religion: Southern Baptist

Seems he is a so so scifi writer and so so game designer/author

He is best known for his christian based video game design......didn't do too good as you can imagine.

His most controversial book was called: The Irrational Atheist: Dissecting the Unholy Trinity of Dawkins, Harris, and Hitchens

His most controversial views:

He has called women's rights "a disease that should be eradicated."[21] He also wrote that according to the traditional Judeo-Christian ethic only a woman who is not entertaining the possibility of sex with a man can be considered a "wholly innocent victim under this ethic" should she be raped by that man, and that rape is no better or worse than extramarital sex from a moral perspective because "Christianity knows no hierarchy of sins." [22] In September 2004, Day publicly challenged neoconservative, statist commentator Michelle Malkin to an on-air debate on the Northern Alliance Radio Show after writing a pair of columns criticizing numerous factual inaccuracies in her book In Defense of Internment. Malkin declined the debate. In May 2006, Day was repeatedly criticized on air by national radio host Michael Medved for an article published on WorldNetDaily in which Day argued for the feasibility of deporting illegal immigrants en masse from the United States by saying that the Nazis accomplished a deportation of comparable scale in a few years. Medved called the libertarian Day "Nazi boy" and "Nazi-lover" and claimed that "he was basically taking a Nazi position."[23]


so this is the guy who is spreading the fear about the bank run..............so lets see what a REAL NEWS SOURCE has to say.

http://blogs.reuters.com/felix-salmon/2009/08/17/why-the-fdic-wont-run-out-of-money/

With the FDIC insurance fund running low, there’s a fair amount of confusion out there about whether the FDIC can run out of money. The answer is no, it can’t. The insurance fund might be down to its last $13 billion, but that number is really useful only for accounting purposes. There’s a government guarantee on bank deposits; the FDIC is merely the arm of the government which administers that guarantee and tries to make sure, by charging banks insurance premiums, that it doesn’t cost the taxpayer any money over the long term.

Joe Weisenthal, this morning, says that we needn’t worry about the FDIC’s money running out because “Congress will replenish the FDIC instantly” — implying that there’s at least the possibility that Congress wouldn’t replenish the FDIC. But that’s not the case. In May, President Obama signed a bill providing the FDIC with as much as $500 billion in credit at the Treasury — more than enough to cover anybody’s bank-failure worst-case scenario. That bill is now a law, which means that Congress needs to do nothing in the event that the FDIC’s funds go to zero.

I wish that the reporting on the FDIC insurance fund were clearer on this front: it’s basically just a way of keeping score, and working out whether the cost of FDIC bailouts is greater than or less than the insurance premiums that the FDIC has received from the banking industry. It has no bearing at all on the FDIC’s ability to backstop bank deposits.

[Drextin Profile]

Sorry I should have been more specific. Vox Day reported this story first. Low has posted it from someone else who basically took Vox's cue and research.