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Appears? It is all he has done in Economics threads for quite some time. Better yet he doesn't discuss or show any knowledge, he just pastes stupid articles written by far fringe websites. At times the articles are entertaining purely from the "people really believe that?" perspective.
Quite so. I have mostly given up on challenging or rebutting him. His beliefs about the coming collapse are more like religious beliefs - not suseptible to rational analysis.
so wait... what you're telling me, is that when I opened an account up at a bank and I agreed to their terms but didn't actually read of it, this is what I'm subject to!?! OH THE HORROR!!!
or maybe it's in plain english that your money, up to 250k is back in full faith by the us government. So if there is a bank run, or bank collapse, or anything like that, if you have 250k or less money in the bank, you will not lose a penny of it. Those that have more, will lose what they have, greater than 250k. That's written in plain english.
Also, for those that don't know what a bank actually does with their money, should read up a little bit. The thought that it is common knowledge that banks actually only have a cash reserve of something like 9% of total deposits is, I guess not common knowledge even though it's been in the media like crazy as of late.
The idea that you can get a percentage of interest on your money while just putting it in to the bank without them using your money to make more money is just silly. That would be the equivalent of you putting 100 dollars under your mattress and then a year later you now have 110 dollars. It just doesn't work like that.
I'm going to assume that this article is soon going to be posted on infowars if it isn't already. This article just cries spinning words and hyping the public over nothing other than a conspiracy theory.
Fact is that America has what is called "fiat" money. Our money is not worth the paper it's printed on. THAT is the facts. The only way our money has any value or buying power is because "we" believe it does.
Any money in any savings instruments are slowly devalued (loses buying power) until it gets to zero. That plus inflation drives up the price of everything in the chase to keep up which today is impossible.
So yes, your mattress is a good place to keep you money since it matters not if your money is in a bank or under your mattress.........it will lose value and buying power either way.
OK everyone, I know this is chicken little wrapped in tin foil, but I found this fringe site called "http://fdic.gov/" and I think it might be worth taking a look at.. I know, these guys are a bunch of extremists with no credibility, but this paper that they put out at the end of last year is interesting nevertheless: http://www.fdic.gov/about/srac/2012/gsifi.pdf
The paper is about how the FDIC plans to deal with a failed "Globally Active, Systemically Important, Financial Institution" (G-SIFI). Helpful hint: you can remember this acronym with the mnemonic "Goldman Sachs Is F'ing Insolvent". An overview of their solution is as follows:
Quote:
In the U.S., the strategy has been developed in the context of the powers provided by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Such a strategy would apply a single receivership at the top-tier holding company, assign losses to shareholders and unsecured creditors of the holding company, and transfer sound operating subsidiaries to a new solvent entity or entities. (page 2)
In other words, the FDIC would take over the failed institution and split it into a "good bank" and a "bad bank". In this scenario shareholders would likely be wiped out, and any losses that they could not cover would be borne by the "unsecured creditors" (depositors and bond holders). This means that the financial institution would be allowed to continue its zombie existence a little bit longer until the next time it experiences a financial crisis, when it can once again cannibalize its shareholders and depositors for more capital.
You may ask, who would re-invest in such a financial institution? Cleverly, they have devised a solution that actually turns the money creditors are owed into equity of the zombie bank itself:
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The claims of the failed G-SIFI’s unsecured creditors will be converted into equity and, as a result, the former creditors will become owners of the new private sector operations.
It is unclear to me if the equity stake of the depositors means that the FDIC does not have to pay out. However the paper suggests that up to $250,000 would be covered in FDIC insured accounts.
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But insofar as a bail-in provides for continuity in operations and preserves value, losses to a deposit guarantee scheme in a bail-in should be much lower than in liquidation. Insured depositors themselves would remain unaffected. Uninsured deposits would be treated in line with other similarly ranked liabilities in the resolution process, with the expectation that they might be written down.
The $250,000 protection would only be a small solace to people who had any funds over this limit I suspect, and would be useless in the case of investment accounts. Also, even in an insured account like an IRA logic suggests that you could still face losses if you own shares or bonds in the failed institution, or if you own a fund that does.
Furthermore, the ability of the FDIC to protect depositors in a case like this is very suspect. According to the FDIC website, at the end of 2011 (the date of the most recent annual report posted, FDIC: 2011 Annual Report) the Deposit Insurance Fund could only cover 0.17% of insured deposits.
If a G-SIFI goes under - for example, in the unlikely event that a company like JP Morgan with a $70 trillion notional derivative book makes some bad bets - the miniscule $12 billion insurance fund balance would be wiped out instantly multiple times over, and it stands to reason that they would not even be the only institution in trouble. To put this in perspective, according to the FDIC website, at the end of 2011 there were almost $7 trillion in insured deposits and according to a recent Bloomberg article about half of the deposits in the US are at the 8 largest banks (JPMorgan Leads U.S. Banks Lending Least Deposits in 5 Years - Bloomberg). If one of these big 8 fails, the shortfall for covering depositors would need to come from the Treasury - and of course the federal government is already insolvent as well. I believe it is much more likely that the government would claim that the equity created in the new private sector institution, as described above, would replace any deposit insurance claim that an individual might bring.
I'm not pointing all of this out to be alarmist and say that we should all take our money out of the bank, out of brokerage accounts, and out of IRAs and stuff it under the mattress. I'm just saying it does appear the agency supposedly protecting assets on deposit at banks is confirming the OP's assertion that bank accounts can be seized, and that there is insufficient insurance for the amount of money that is supposedly protected. Thus, it might be wise to diversify into assets that are outside the financial system such as unmortgaged real estate, fine art, fine wine, collectible cars, gold, silver, basically anything tangible that does not carry a large amount of political or currency risk.
I'm not pointing all of this out to be alarmist and say that we should all take our money out of the bank, out of brokerage accounts, and out of IRAs and stuff it under the mattress. I'm just saying it does appear the agency supposedly protecting assets on deposit at banks is confirming the OP's assertion that bank accounts can be seized, and that there is insufficient insurance for the amount of money that is supposedly protected. Thus, it might be wise to diversify into assets that are outside the financial system such as unmortgaged real estate, fine art, fine wine, collectible cars, gold, silver, basically anything tangible that does not carry a large amount of political or currency risk.
It is a well known fact that the FDIC is but one of the Gov't propaganda mills used to convince the people that the money is "safe" and all is well. When the truth is just the opposite. The money is fiat and all is not well.
However, the public must continue to believe in the fiat currency or the whole house of cards will collapse around our ears. So the public plays along with the lie and uses fiat money simply because they have no other choice. Civilization demands the use of money to exist so it matters not if it's fiat or solid gold.
It is a well known fact that the FDIC is but one of the Gov't propaganda mills used to convince the people that the money is "safe" and all is well. When the truth is just the opposite. The money is fiat and all is not well.
However, the public must continue to believe in the fiat currency or the whole house of cards will collapse around our ears. So the public plays along with the lie and uses fiat money simply because they have no other choice. Civilization demands the use of money to exist so it matters not if it's fiat or solid gold.
Certainly from the very beginning when the FDIC was created in 1933, its purpose has been to prevent a bank run by giving people confidence that their money is safe in the bank. Apparently they've done a good job because so far there have not been systemic runs on the bank in the U.S. since 1933. Or maybe people just aren't paying attention...
I too believe there is a significant amount of evidence to suggest that economic collapse is possible, maybe even imminent. It's up to everybody to decide for themselves how to best plan for the future. If a collapse occurs it will be worse for some than it is for others and the main determinant of peoples' prosperity in any scenario will be knowledge. The part I find frustrating is that people are required to dig for a lot of the important information, because mass media has an agenda to maintain the status quo, especially the financial media. Unfortunately the status quo is the ongoing transfer of all real wealth from the middle class to the global elite and the institutions they control.
If someone believes that his or her best strategy is to count on the current system remaining in its present form, of course they'll think all of this is tin foil hat conspiracy theory. But being absolutely positive about anything is often a sign of hubris and could be a very costly mistake. One need not be a complete doomer to protect himself against "tail risk".
Fact is that America has what is called "fiat" money. Our money is not worth the paper it's printed on. THAT is the facts. The only way our money has any value or buying power is because "we" believe it does.
Any money in any savings instruments are slowly devalued (loses buying power) until it gets to zero. That plus inflation drives up the price of everything in the chase to keep up which today is impossible.
So yes, your mattress is a good place to keep you money since it matters not if your money is in a bank or under your mattress.........it will lose value and buying power either way.
No currency in the world is anything, but FIAT money. Tell me something that I don't know already.
I believe the Swiss Franc was at one time partially convertible to gold. Switzerland stopped doing this back in the 1980's. Since that time, every currency in the world has, in essence, been a "fiat currency".
America has not been on the gold standard since 1933. That's eighty years of use of a fiat currency. The only thing that has changed is that despite periodic recessions, there has been no repeat of the Great Depression of the 1930's. Please no one tell me today that what we are going through is worse than the Great Depression. Eight percent unemployment doesn't compare with 25% unemployment in a society with no social safety net.
Eighty years, Gramps, where's that monetary collapse you keep talking about?
This has been an interesting forum, for sure. I can think of loads of things to say, but I won't bore all of you with it- however, I do want to say one thing, which, for me, sums it up pretty well; prudence is to be able to see the writing on the wall, and to never tell yourself that "it could never happen".
Thus, it might be wise to diversify into assets that are outside the financial system such as unmortgaged real estate, fine art, fine wine, collectible cars, gold, silver, basically anything tangible that does not carry a large amount of political or currency risk.
This I think is good advice because I think it is possible that we could have a currency or stock market collapse and if that did take place at least you would be holding tangible assets. Myself, since I am poor the only thing I have is good farm land and tangible assets.
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prudence is to be able to see the writing on the wall, and to never tell yourself that "it could never happen".
I agree with this instead of it could never happen I live by what if it did happen and what can I do to prepare myself with the resourses I have. Out of the two scenerios who would be hurting the most if they guessed wrong? answer the "it could never happen crowd".
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