August 27, 2008
Last month, following the collapse of Indymac Bank, I wrote a post about the FDIC and how it’s slowly being phased out by inflation, but also observed that the FDIC itself was threatened with bankruptcy. (See FDIC – The Agency That Insures Your Bank Account – Being Phased Out.) Well, folks, it’s here. It’s now clear that the FDIC has nowhere near the funds required to take over the rash of bank failures that’s coming. So the Federal Reserve, itself bankrupt, is now faced with yet another huge bail-out. The Fed will crank up the bond printing machines and essentially borrow the money from our foreign creditors. The only good news in all of this is that these foreign creditors will be the ones ultimately stuck with worthless debt – poetic justice for the global parasites who fed on our economy under the guise of “free trade,” sucking the manufacturing jobs, money and life blood out of our economy.
Oh, and by the way, the FDIC has plans to dramatically increase the fees it charges banks to participate in its insurance program. Coming soon to your bank account: something called an “FDIC surcharge.” Bank on it. Once again, Americans will be indirectly footing the bill for our goofball trade policies.
July 16, 2008
There’s been a lot of talk from government officials, attempting to prevent panic and a run on banks, assuring us not to worry, that our bank deposits are insured by the FDIC up to $100,000. What no one has discussed is the fact that the FDIC is slowly being phased out by inflation. Did you know that the $100,000 limit on insured savings has been in place for 28 years? It was last increased in 1980, from $40,000 to $100,000.
Depository Institutions Deregulation and Monetary Control Act of 1980
This act, which is passed as a response by Congress to get S&Ls out of interest- rate mismatch, is an effort to deregulate S&Ls.
- Increases THE FDIC deposit insurance coverage from $40,000 to $100,000.
Since 1980, the CPI (consumer price index) has risen by 257%. Therefore, the value of deposits insured by the FDIC has declined by 257% since 1980. If this isn’t a gradual phase-out of the program, I don’t know what is.
Also, did you know that the FDIC only had about $52 billion in assets at the beginning of this year? How many bank failures would it take to wipe out that fund? Very few. Then what? Then taxpayers are on the hook – you and I. The government will simply pick up the tab and add it to the national debt for our kids and grandkids to pay.