October 01, 2008

So, what would you do if the banks were ordered closed, and you had no access to your cash? Well, in 1933, that happened. And it can happen again.

There is or was $6.6 trillion on deposit at US banks, but over $2 trillion of these are UNINSURED - over the FDIC limits.

Eventually the sheeple who own that $2 trillion will WAKE UP and start pulling it out of the banks, if they aren't doing that already today. And so will people and businesses with deposits that are even FDIC insured, as they trust their mattress more than their bank.


So, get ready for Congress to change the FDIC limit to $1 million or more - or all of it, putting the taxpayer again on the hook for trillions.

Otherwise the real bank run starts right now. And unlike 1933, there won't be lines outside banks. Bank runs today are done right here, on the internet, where they can't be seen but they can sure be felt.


If that online bank run is already underway, which based on the near 0% short term t-bill rate it is, and Congress doesn't raise FDIC, then get REAL worried about the banks closing, by order of the government. Get worried about not having access to your money.

Here's FDR in '33 on the banks. Enjoy. Get some cash and cash-equivalents. And get some popcorn.

37 comments:

DAve said...

FDIC insures depositors against bank failures. It provides in its present state insurance for up to $100K each depositor.

The latest brilliant idea is to up the limits from $100K to $250K each depositor.

FDIC DOES NOT HAVE ENOUGH MONEY TO COVER THE DEPOSITS IT ALREADY HAS AND NOW THE PLAN IS TO INCREASE ITS (WHICH MEANS OUR) OBLIGATIONS AND EXPOSURE ALMOST THREEFOLD.

Check out the amount of money FDIC actually has versus how much it will have to pay if only a few more banks fail. It doesn't even have 1/10th of what it could need. And many more banks WILL fail guaranteed.

This seems like just another back door way to trick us into bailing out big money players.



Our representatives are not supposed to be our enemies

Anonymous said...

Microwave another bag of popcorn, and turn on the T.V. to watch the panic BANK RUNS.

...and the DOW shed thousands in the process...

Hank said...

Ok, so you don't want to keep your money in the bank Keith. Where do you put it so you have physical access to it? In your roof rafters? Buried in your backyard? Would someone still have access to a safe deposit box in a bank in the event of a bank run?

keith said...

I've got money in banks too. But I've spread it around, it's all FDIC, and some obviously is outside the US

I'm just letting you know what to watch for. I think the bank run is happening right now, Congress, the Fed and Bush know it, and you'll see FDIC limits radically altered within hours.

If not, trouble.

But it's always good to game out scenarios and plan ahead. If they don't change FDIC, and do decide to shut the banks down, what do you do? If they don't alter FDIC, and your bank fails, are you protected?

Just think it through, for your unique situation, and prepare as best as you can

And think, in your wildest nightmare, what happens if it ALL breaks down, the government loses ALL control, and all the banks all over the world fail..

Something to think about.

Anonymous said...

My partner went into a SunTrust branch yesterday to withdraw $9000...they said that they didn't have it. She then asked, "Can I get $6000?" No. "How much can I get?" "We might be able to give you $2000" the branch manager said, adding "we have more on order but it hasn't come in....maybe later in the week....."

Anonymous said...

FDIC DOES NOT HAVE ENOUGH MONEY TO COVER THE DEPOSITS IT ALREADY HAS AND NOW THE PLAN IS TO INCREASE ITS (WHICH MEANS OUR) OBLIGATIONS AND EXPOSURE ALMOST THREEFOLD

But FDIC's close relative, Uncle Ben has a magical printing press, and he can provide all the money they will ever need.

There is no need to confiscate gold today, but that doesn't mean they will not do it.

A month after the communist FDR made this speech, he ordered the confiscation of gold from the subjects of the United States.

Anonymous said...

Keith my man, I have been along side you and the readers of this blog for years now.

I do not see a panic or bank run occurring because the govt. will throw everything they have at this and worry later about consequences.

FDIC to $250k or even $1m-check
1 Trillion $ bailout-check

The unfortunate part is that the govt. is propping up the wealthy and not allowing the ups and downs of a true market which allows new individuals to become wealthy. If the DOW hit 6000 many idiots that did not manage risk would be wiped out, and people like me could come in and purchase stocks at better values and gain wealth when stocks rebound. But the govt. is intent on propping up the market with tax payer money, so if you are in the wealthy boat you get to stay, and if not then do not count on the opportunity of getting in but only of paying for them to stay.

Bush in his speech yesterday stated that over $1 trillion was lost in the stock market drop at the fault of congress not passing the bailout of $700 billion. It is clear that their intentions are for a market that only goes one direction and will use tax payer money as the means.

No longer is opportunity a possibility for all, but now a right for the few wealthy and supported by the rest of us.

Reality said...

Can't wait for them to declare bank holidays. See, if they do that, the fiat banking system will be finished. People will have to accept each other's real bills with forward discount at first, then quickly rediscover precious metal as currency.

Anonymous said...

Reliable word that Bank of America branch managers just received a letter or memo from the USFed instructing them to perhaps be ready for a one-week universal shut-down of the banking system, including access to checking accounts, savings accounts and credit cards. Reliable word has it that BofA bank branches received a shipment of signs last week, reading “We're sorry, but due to circumstances beyond our control, we cannot be open at this time.”

Maybe I'm wrong, but it appears to me the Feds will hold our money captive until this bill is passed.

Paulson is creating panic, but lying about the reason.

Anonymous said...

Eventually the sheeple who own that $2 trillion will WAKE UP and start pulling it out of the banks
---------------------------------

it is already happening, which is what is causing the current panic.

all that is left now are the clueless idiots that some how managed to accumulate more than the FDIC limit.

Anonymous said...

A month after the communist FDR made this speech, he ordered the confiscation of gold from the subjects of the United States.

---------------------------------

amazing how people forget. And that was liberal good guy FDR! Imagine what will happen when Dr. Evil Bush (or Dr. Idiot, I can never keep tract, one minute he described as an evil genius, the next an idiot) decides to go to that level.

JL in Miami said...

For those of you who value Gold, please note that it can be confiscated and ordered to be a worthless commodity.

Several gorvernments in Latin America have done this in the past... and I do not see why they US could not do it.

After all we are living in interesting times!

Anonymous said...

Maybe I'm wrong, but it appears to me the Feds will hold our money captive until this bill is passed.

Paulson is creating panic, but lying about the reason.
----------------------------------

you know, if that happens perhaps works should take a holiday and spend a week in DC. I will pack my tent and pitch in there by the pretty reflecting pool.

Agent 99 said...

Dave,
FDIC does not insure $100K per depositor. It insures up to $100K per account. If you have $200K in a joint account PLUS $100K in your own account you are individually covered for $200K and your spouse for $100K. Total deposits $300K, total insured $300K.

Anonymous said...

Congress is in a hurry to push through the FDIC limit, because it is aware that we are in the midst of a global bank run.

That my friends is the biggest threat right now.

Keep some cash and food in your home. This bank shut down can happen within days.

Agent 99 said...

Here it is ladies and gentlemen:

KeithPANIC

(and he's right)

Anonymous said...

Took some money out of Wachovia last Friday just in case they went under. Didn't want any hassles regarding access to my cash in the event of any failure/FDIC takeover over the weekend.

The rest, as you know, is history.

kilgore said...

THere's a scary article in the WSJ about all the prime brokerage assets that were held at Lehman that are now frozen. Apparently these are highly leveraged accounts held by hedge funds that have been frozen indefinitely. So the hedge funds can't sell the assets that are levered, and it's illegal to short those assets in another account. So these funds are evaporating as the underlying assets are losing value.

Crazy!


http://online.wsj.com/article/SB122160220329345047.html

Anonymous said...

.




I remember watching Roosevelt on T.V.

explaining the depression!


.

k.w. - Southern Ca. said...

Just listen to Franklen D. Roosevelt! A man of real intelligence!

It's a disgrace that we really have well-dressed fools running this country (into the ground) these days.

Sure, all of his decisions weren't always the best choice, but he did they best he could in SAVING THE COUNTRY.

What are our representatives these days - our employees - now doing for us as a nation?

We still have the vote, so let's use it VERY WISELY from this point forward, or none of us - Democratic, Republican or whatever party affiliation - won't have a nation worth fighting for any longer.

San Diego Native said...

"The FDIC does not and will not run out of money. Like all federal trust funds, the FDIC's insurance 'trust fund' does not exist. The reserves shown in the fund simply evidence the amount of money contributed by the banking industry into the fund. Like all federal trust funds, the cash raised by FDIC insurance premiums goes into the Treasury's general fund. When the agency needs cash, then the Treasury makes the money available. When the positive balance shown in the FDIC insurance fund is depleted, the FDIC simply runs a negative balance with the Treasury, a loan that the banking industry will repay over time. Indeed, the FDIC is preparing to raise the industry's insurance premiums to generate even more cash to deal with the rising levels of bank failures. Also, in the remote chance that the FDIC ever reached the statutory borrowing limit from Treasury, the Congress will simply raise the limit."

- "Institutional Risk Analytics" 9/26/2008

Basically, you're (FDIC insured) money is safe - but it will be worth less (not worthless) in the (likely) event that the treasury needs to lend more money to the FDIC.

goldman sux said...

FICTIONAL Reserve Lending will become the banking standard.

The NEW Goldman Sachs Banking Model.

GUARANTEED TO FAIL, but not before they've skimmed more 'untold' billion$ from the U.S.Treasury.

Hank & Da Boyz at 'GS National Bank' have sealed the fate of our country.

We are 'unofficially' bankrupt.

Anonymous said...

Yes, it happened in 1933. So did many things that parallel today.

And yet, realtors were not forever discredited, the most shameless RE pumper's name is lost, the world did not change forever, the country didn't collapse....so why is it supposed to happen this time, again? Because HPers said so? LOL

Lady Di said...

Roubini states that a silent run on the banks is underway. It is global in nature. Ireland plans to insure ALL bank deposits. England is following step. These countries are in triage mode.

Per Roubini only 63% of domestic deposits are insured. $2574bn of deposits are not insured.

He is calling this the "mother of all bank runs."

When Roubini speaks, I listen.

Anonymous said...

For those of you who value Gold, please note that it can be confiscated and ordered to be a worthless commodity.

Several gorvernments in Latin America have done this in the past... and I do not see why they US could not do it.


You don't have to go to Latin America. On April 5, 1933, The evil commy bastard Franklin Delano Roosevelt ordered confiscation of all gold held by Americans to be confiscated (minus a few family heirlooms). Gold backed our currency then and people were reimbursed $20.75 for their gold. Upon completion, gold was revalued at $35 an ounce. Those who gave up gold lost some 40% by giving in FDR. Huge amounts of gold left the country prior to the order. Compliance wasn't exactly high.

Anonymous said...

The wife has been hitting the ATM regularly and we've pulled two months worth of cash out in case they decide to lock the banks and ATMs for awhile. I have four buckets of junk silver quarters purchased back in 2002 for about $12K, and today they are worth $37K. The freezer is full, the guns are loaded, and our only exposure in the market now is BEARX.

Should be an interesting Winter after the elections...

FlyingMonkeyWarrior said...

I have cash on hand as of a month ago.

Anonymous said...

Keith,

What do you think about the safety of
SLV shares in a brokerage account. Can they be wiped out too due to insufficient insurance?
Are silver coins or cash the only way to go? It's hard to imagine having to hoard so much in one's house.

Anonymous said...

Reliable word that Bank of America branch managers just received a letter or memo from the USFed instructing them to perhaps be ready..."

This is a word for word quote from

http://www.gold-eagle.com/editorials_08/willie092408.html

Gold-eagle.

A gold bug site.

Take it with a huge salt lick...

-Lee.

Anonymous said...

"So, what would you do if the banks were ordered closed, and you had no access to your cash? Well, in 1933, that happened. And it can happen again."



and joe biden said he remembers president FDR coming on TV telling people not to panic when they closed the banks in 1933.

Anonymous said...

Check out the amount of money FDIC actually has versus how much it will have to pay if only a few more banks fail. It doesn't even have 1/10th of what it could need. And many more banks WILL fail guaranteed.

=====================================

no problem, the FDIC can just go borrow the money

Anonymous said...

The wife has been hitting the ATM regularly and we've pulled two months worth of cash out in case they decide to lock the banks and ATMs for awhile. I have four buckets of junk silver quarters purchased back in 2002 for about $12K, and today they are worth $37K. The freezer is full, the guns are loaded, and our only exposure in the market now is BEARX.

Should be an interesting Winter after the elections...
--------------------------------------

hmmm, i have been pulling cash out too.

it will probably be idiots like us (pulling cash out) that forces their hand in closing banks for a holiday....

Anonymous said...

Buy BerkShares.
http://www.berkshares.org/

bank dick said...

"Reliable word that Bank of America branch managers just received a letter or memo from the USFed instructing them to perhaps be ready..."

The new banking laws passed a couple of years ago give branch managers the authority to limit customer withdrawals to amounts they deem "reasonable", and if a customer demands to close their account, the banks have up to 25 days to refund the deposit. Even then they can pay depositors with a bank check to settle the account, no cash needed. Oh, and any balances due on credit cards held with that bank can be deducted from deposits before the payout.

In a bank panic/run, depositors will be hard pressed to find another bank that will convert another "foreign" bank's check into cash. The only real recourse for many will be to march over to a Federal Reserve Bank and stand in line there.

Live hundreds of miles from a Federal Reserve Branch? Have your credit card with the same bank as your checking/savings accounts? Owe more on the cards than you have on deposit? Better get right with God real soon.

Got cash?

Andrew Hac said...

Now the Emperor is swimming naked on the beach.
Now the grim Reaper is wielding his mighty scythe.
Now the beast is slashing its talon at the prey.
Now the Americano is toasted.

How toasted, you may ask ? They will be toasted nicely, goldenly and juicely like the good old snapper turtle skewered on a green Chinese bamboo stick from head to ass all sizzling with that nose tingling aroma in the air, fat popping, juices dripping over a bed of red hot charcoal fire.

This snapper turtle toasting feast had been foreseen a while ago, preparing for the ultimate banquet. The banquet of death.

This comes from driving a big-ass hunker Escalade while making $30K per year as a sale manager at McDonald.
This comes from dining out at Red Lobster while making $40K per year as a cellular phone saleman.
This comes from indulging in McMansion, boat, water skii, sea-doo, flat screen TV, grantite countertop kitchen, stainless steel refrigerator.
This comes from believing madly that the Iraqi possessed a WMD, thus the invasion of the Iraq nation and the slaying of countless of innocent Iraqui citizens.
This comes from Grandma, Grand, Mom and Pop, teenagers swarming the Walmart filling up shopping cart with junks.
This comes from fat-ass, stupid, ignorant, blindly patriotic, American Idol watching, CSI devotee, beer guzzling belly, obese Americano with a pea-size brain.

Now it is the time to pay the Piper. Yes, Uncle Sam can default on the Red China and Japan foreign loan, but then after that, who would lend Uncle Sam more money ? Can Uncle Sam lend Uncle Sam himself some money ? Or wait... Perhaps The Great Snapper Turtle can lend Uncle Sam its roasted ass !!! Heeeee. Haaaaa. Hooooo. Weeeee !!!

So, is the Americano toasted already ? Let's feast !!!

Anonymous said...

Went to Home Depot and saw a larger group than usual down an aisle.

Five people all looking at safes, just before closing.

Interesting.

Anonymous said...

No matter how bad the housing market is, real estate will always be a good investment because it is tangible.