Wednesday, September 17, 2008

Putting on a Brave Face but the FDIC is Quaking in its Boots!

I watched Sandra Thompson from the FDIC on CNN this morning assuring viewers that their deposits of up to $100,000 are "safe and sound" because they are insured by the Federal Deposit Insurance Corporation (FDIC).

Well folks, here are the straight goods!

In actual fact, the FDIC has only ONE-CENT in reserves for every dollar that it is responsible for ... ONE PENNY ON THE DOLLAR! As of today, the FDIC is responsible for insuring $8.6 TRILLION DOLLARS OF YOUR MONEY! You do the math.

The FDIC lacks the capital to fully insure your money. If the banking system continues to crumble, the U.S. government will be forced to BAIL-OUT the FDIC with funds which the government DOES NOT HAVE!

They will have to create more debt by printing and selling more bonds to meet the demand, which will then become the obligation of American taxpayers. My gosh, what a surprise!

Since these bonds will be immediately monetized they will be highly inflationary.

The possibility of Washington Mutual (WaMu) joining the ranks of the bankrupt has the FDIC quaking in its boots. With WaMu being the nation's largest savings and loan, a bankruptcy puts $310 billion in assets at risk, making the FDIC liable for stepping up to the plate. The question is, will they even have a bat?

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