CNN – Problem bank list climbs to 829:
More money in the kitty. The FDIC reported a second consecutive increase in its deposit insurance fund, which covers customer deposits when a bank fails. The fund, which had been dwindling for two years, grew by $5.5 billion, but it still operates in the red, with a deficit of $15.2 billion.
“As we expected, demand on cash have increased this year,” said Bair. “But our projections indicate that our current resources are more than enough to resolve anticipated failures.”
Right. Your insurance program is underwater, but you have plenty of reserves. No worries.
Kidding aside, the government has bailed out everything else. There’s no doubt in my mind they’ll bail out the agency in charge of bailing out bank depositors as long as they’ve got a penny they can borrow. It’s just that this can’t go on forever, which means it won’t.
Short term – no worries. Medium to long term – I have some nagging concerns about the FDIC getting in over their heads in a black swan-type event.
That makes this post from last year timely again - Where do you put money if you’re concerned about bank failures? I’ve added a few updates. Another reason it’s timely again – gold is heading back into new record highs.
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I was watching the old Hawaii Five-O show the other day, and the bad guys were trafficking in gold. $35.00 an ounce.
I wish I had the source handy, but recently read an article which related the price of gold with ordinary commodities (gasoline, food, tools, etc.)
It was amazing how over the past century, a given qty of gold had roughly the same conversion to goods.
A similar parallel exists for quality firearms.