Trying to extrapolate this into "the entire banking system is gonna fail and the FDIC is screwed" is dangerous, and can influence behavior and critical thinking.
But it is different when the FDIC influences behavior and critical thinking by falsely leading everyone to believe they can cover all of our deposits in the bank. Sure than can cover 100% of yours and they can cover 100% of mine, but they are far from prepared to cover 10% or more of all the deposits at one time. Consider it "fractional insurance." LOL
Sorta reminds me of the "fractional" gold and silver in COMEX vaults. Come to think of it it seems our entire financial system is suddenly based on fractions.
Natural forces of supply and demand are the best regulators on earth.
Trying to extrapolate this into "the entire banking system is gonna fail and the FDIC is screwed" is dangerous, and can influence behavior and critical thinking.
But it is different when the FDIC influences behavior and critical thinking by falsely leading everyone to believe they can cover all of our deposits in the bank.
Well, this is your perception. And we know what you think about that.
But to take it further, why would it matter? You says the dollar only has value because we think it does. Others make think gold only has value because they think it does. I know the 5000 year blah, blah, blah....but think about it. If the world got so bad that the dollar was worthless, are you confident you (and a counterparty) will be able to place an agreeable value on gold? Because if you cant exchange that gold for something you need to survive, then what value is it?
There is nothing but faith backing any nonproductive asset, beit gold or dollars.
Faith my man, faith. It is always what you make of it.
More than one-third of the banks failed prior to the creation of the FDIC in 1933. Note that the FDIC does not keep banks from failing. It attempts to insure deposits held in failing banks. If the FDIC had been in place when 1/3 of the banks failed, the amount of money involved would have caused the FDIC to fail. Purpose of the FDIC is to provide the perception that deposits are safe. And yes, they are financially prepared to handle claims up to $250K per account, but only on a very small scale such as when a single mismanaged bank fails. The FDIC is in no way prepared to handle a panic run on the banks, it's sole purpose is to try to control perception by fixing very small cracks in the system.
They should include a disclaimer, "Since 1933, the FED has been able to prevent a run on the banks." Guess what happens when a currency approaches its breaking point . . the ultimate game of musical banks chairs begins.
Natural forces of supply and demand are the best regulators on earth.
But to take it further, why would it matter? You says the dollar only has value because we think it does. Others make think gold only has value because they think it does. I know the 5000 year blah, blah, blah....but think about it. If the world got so bad that the dollar was worthless, are you confident you (and a counterparty) will be able to place an agreeable value on gold? Because if you cant exchange that gold for something you need to survive, then what value is it?
There is nothing but faith backing any nonproductive asset, beit gold or dollars.
Faith my man, faith. It is always what you make of it.
Historically, all fiat currencies are abused to the point of eventual failure. I'm not foolish enough to believe the dollar is any different. To do so would require blind faith. Especially in the face of it's increased abused since 2008.
I am confident there will be an agreeable value on gold if and when the dollar reaches it's breaking point. After all, gold has survived the breaking point of all previous dead currencies.
Natural forces of supply and demand are the best regulators on earth.
There is no math to do. If airlines can get "money out of thin air" then so can the FDIC. If the Kennedy Center can get "money out of thin air", then so can the FDIC. We can go on and on about this.
derryb, knowing that the Fed is now bailing out hedge funds and junk bonds, I would surmise that the FDIC can get any amount of "money" on an as needed basis on short notice.
In other words, the fraud continues and "we will insist that you disavow any negative thoughts about how the financial system's increased abuse has magnified since 2008."
Q: Are You Printing Money? Bernanke: Not Literally
Comments
But it is different when the FDIC influences behavior and critical thinking by falsely leading everyone to believe they can cover all of our deposits in the bank. Sure than can cover 100% of yours and they can cover 100% of mine, but they are far from prepared to cover 10% or more of all the deposits at one time. Consider it "fractional insurance." LOL
Sorta reminds me of the "fractional" gold and silver in COMEX vaults. Come to think of it it seems our entire financial system is suddenly based on fractions.
Natural forces of supply and demand are the best regulators on earth.
Well, this is your perception. And we know what you think about that.
But to take it further, why would it matter? You says the dollar only has value because we think it does. Others make think gold only has value because they think it does. I know the 5000 year blah, blah, blah....but think about it. If the world got so bad that the dollar was worthless, are you confident you (and a counterparty) will be able to place an agreeable value on gold? Because if you cant exchange that gold for something you need to survive, then what value is it?
There is nothing but faith backing any nonproductive asset, beit gold or dollars.
Faith my man, faith. It is always what you make of it.
Knowledge is the enemy of fear
My perception is based on the facts.
per the FDIC they had a receivership funding budget of $145 Million in 2018.
per the FED there was $1,522 Billion dollars in bank demand deposits in 2018.
Do the math.
More than one-third of the banks failed prior to the creation of the FDIC in 1933. Note that the FDIC does not keep banks from failing. It attempts to insure deposits held in failing banks. If the FDIC had been in place when 1/3 of the banks failed, the amount of money involved would have caused the FDIC to fail. Purpose of the FDIC is to provide the perception that deposits are safe. And yes, they are financially prepared to handle claims up to $250K per account, but only on a very small scale such as when a single mismanaged bank fails. The FDIC is in no way prepared to handle a panic run on the banks, it's sole purpose is to try to control perception by fixing very small cracks in the system.
They should include a disclaimer, "Since 1933, the FED has been able to prevent a run on the banks." Guess what happens when a currency approaches its breaking point . . the ultimate game of musical banks chairs begins.
Natural forces of supply and demand are the best regulators on earth.
Historically, all fiat currencies are abused to the point of eventual failure. I'm not foolish enough to believe the dollar is any different. To do so would require blind faith. Especially in the face of it's increased abused since 2008.
I am confident there will be an agreeable value on gold if and when the dollar reaches it's breaking point. After all, gold has survived the breaking point of all previous dead currencies.
Natural forces of supply and demand are the best regulators on earth.
There is no math to do. If airlines can get "money out of thin air" then so can the FDIC. If the Kennedy Center can get "money out of thin air", then so can the FDIC. We can go on and on about this.
While i understand your concern, it is misplaced.
Knowledge is the enemy of fear
derryb, knowing that the Fed is now bailing out hedge funds and junk bonds, I would surmise that the FDIC can get any amount of "money" on an as needed basis on short notice.
In other words, the fraud continues and "we will insist that you disavow any negative thoughts about how the financial system's increased abuse has magnified since 2008."
I knew it would happen.
In the end, it's all under control.
That's a scary thought. LOL.