NO, You should NOT keep all your money with one bank! For Now Is The Time For All Good Citizens To Save Their Cash.
In Gimme My Money, what was written is so unfortunately true: “Hmm, banks and whole towns going bankrupt. I better get a mattress with a lock box.” Daily, more and more banks are going down, people are making increasing runs on their banks, banks are increasingly bankrupt, then taken over by FDIC but only up to a certain amount of one’s money and only in certain financial institutions as not all are covered. Is Countrywide Bank covered? Is that CD you have at State Farm Insurance covered? “The failure of California bank IndyMac, will cost the FDIC between $4 and $8 billion, and they estimate that about $1 billion of IndyMac’s deposits are “potentially uninsured,” meaning that the depositors had more than $100,000 on deposit.”
I say, better make that a fireproof, waterproof mattress with a lockbox. For the comment about buying a $10k money order, my question is “How you going to cash that money order when the time comes that you need the cash?” And if it is cashed, a notice gets sent to the IRS due to the high amount making you out in their eyes, and others of Big Brother, for drugs or terrorism or both.
A small fireproof, waterproof safe, with some concrete screws or long screws for attachment into the floor, along with securing a closet with pinless hinges and a metal cover over the door latch will set you back less than a hundred dollars. For you lucky ones that have more than $10,000 in “liquid” reserves, buy more than one safe to spread your risk around, putting them in more than one secured location, then put the cash away into those safes. Do not use a bank safety deposit box. For that measly .25% Wells Fargo, etc. is paying you, or the loss of principal (your cash) the stock market is returning, that’s a lot safer. For those of you with less than $10,000 in “liquid” reserves, access 100% of your credit card’s cash advances and home equity lines of credit, because Cash Is King and without cash, you’re even more screwed.
Why The American Business System Is Collapsing The fraud in the origination of American home loans guaranteed bank’s debt was secured by a house of cards, nothing more than smoke and mirrors.
I Blame Greedy Home Loan Lenders For Frightening Recession An immediate note modification gives homeowners time until the housing market recovers, the economy recovers, homeowners’ credit can start being repaired to its previous flawless condition, and would not add to the already bloated for sale/rent housing inventory. Since the lenders are not moving fast enough in their note modifications, that guarantees further bank failures and bank runs. That to me make the banks Economic Terrorists when they should be Patriots.
For The Fully Misinformed Investor, which is what the American citizen has discovered they were, wars are bullish as they do create short-term jobs. Wars too quickly turn bearish when power plants, roads, utilities, factories, bridges, schools, railways, water mains, malls, retail outlets, and shoppers are destroyed. Those shoppers that live are either too maimed or too frightened to shop. Wars have always pushed inflation to its highest due to government spending like a drunken sailor on shore leave, whether it was with cash or the credit card. (printing money or issuing debt from Treasury).
History has shown time and time again that wars always result in trade barriers. Trade barriers stifle competition. Wars are so expensive they are paid for with the printing press. That increases inflation and the nation in the war watches its Consumer Price Index escalate up like the latest Batman’s attendance. Inflation is real bad for stocks and the economy. The cost to buy a barrel of oil with the American dollar escalates/inflates way up as the dollar loses value against other nation’s currencies like the dollars on a going down elevator in a Die Hard movie. To make it worse, we have inflation and an economy in recession = stagflation.
Although I do not agree with nor support the monetarist views of ultra-conservative economist Milton Friedman, I do find a statement of his to be true: “We are all Keynesians now.” John Maynard Keynes made an even severer diagnosis of capitalism than Karl Marx ever did. Keynes predicted something that I believe we are today living in stagflation, supporting again the argument for using government to represent the interests of the future to the present.
Here’s Why You Should Wait To Buy A House. Mortgage Fraud Caused The Global Liquidity Crisis. Fallen U.S. home prices and a continuing spike in payment defaults have scared investors away from mortgage debt, including bonds and other securities backed by home loans. Banks, by then, worldwide looked at their portfolios and found massive risk exposure. Hedge funds closed down in an attempt to hold off investors who wanted to redeem their stakes. The result is a modern day run on banks/financial institutions as Now Is The Time For All Good Citizens To Save Their Cash.
As things get worse, I predict that renters and homeowners will increasingly be unable to make their rent or mortgage payments, fill up the car with gas, buy food and medicines, etc., so better start educating yourself now on negotiating note modifications, debt relief, insolvency and bankruptcy.