March 9, 2009

FDIC is Running Out of Money

Another thing I would like to mention is the FDIC running out of money and now the government is talking about an extra 500 bln. USD line of credit for the FDIC.

The FDIC is running out of money because the trust fund is being depleted by all the banks that are failing.

Everybody believes their accounts are insured because FDIC stands behind all bank accounts but the bottom line is, where is the FDIC ultimately going to get the money if a lot of these big banks fail?

It is going to get it from the government. But where is the government going to get the money? They are going to print it. They may try to borrow it from the chines or borrow it from the japanese, but the final analysis is that they are going to have to print all that money, which means nobody`s account is safe.

It does not matter if you get your money back if you cannot buy anything with it. And that would be what would happen if he had a run of bank failures. The fact that the FDIC was there would be meaningless. Sure you will get your money back, but can`t buy anything with it.

That is the reality. Nobody`s money is safe in US dollars even if it under your matress.
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