Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: markomalley

The Federal Reserve makes my head hurt trying to make sense of it. Please advise when we should start stuffing cash in our mattresses withdrawn from our banks.


10 posted on 01/06/2014 5:08:33 PM PST by Refugee From NYC
[ Post Reply | Private Reply | To 1 | View Replies ]


To: Refugee From NYC

“Please advise when we should start stuffing cash in our mattresses withdrawn from our banks.”

Limiting the business you transact with banks is a good idea anytime.

Here is what you need to understand about being a depositor at a bank: you’re an unsecured creditor. That means that if the bank goes bankrupt, you’re last in line to get paid. That’s where the FDIC comes in with deposit insurance. The FDIC protects your deposits. The problem is that the total amount in the FDIC insurance fund is $25 Bil. The total amount of deposits in commercial banks is $9.3 tril (or $9300 Bil). So, the FDIC can cover less than 3/10 of one percent of bank deposits in the case of widespread bank defaults.

OK. So let’s say that we have a situation where there are widespread bank defaults. That came very close to happening in 2008. It’s assumed that FDIC would be backed by the Federal government if the insurance fund were to go bust. That’s assuming of course that dear leader, nancy pelosi, john boehner, and harry reid would all go along with that.

Is it worth the less than 1% interest you get on bank deposits to take that risk?


14 posted on 01/06/2014 6:06:14 PM PST by RKBA Democrat (Having some small say in who gets to hold the whip doesn't make you any less a slave.)
[ Post Reply | Private Reply | To 10 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson