<p>this thread is ridiculous, honestly.</p>
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I have a substantial amount of scholarship money plus a good season's wages sitting in my bank account. To me, the only real advantage of keeping that in there is the convenience of online-banking and buying cheap stuff off of eBay
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<p>Where else would you put it? A jar in your backyard? You are using scholarship money to buy things off ebay?</p>
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And according to a recent Rasmussen poll, 66% of people have essentially no consumer confidence.
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<p>honestly... think about how stupid the average american is. think about it.</p>
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Having watched my bank's stock plummet 60% in the last month,
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what does this have to do with anything? </p>
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and not knowing if FDIC really has the funds to cover 300 million Americans,
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<p>the FDIC guarantees all money up to $250,000 (it was $100,000, but it increased with the bailout bill... without charging banks more money for the increased coverage, but that is another thread. if you want more coverage, you pay a higher premium... that's how insurance works. See if you can get more health insurance without paying more). So, unless you have more than $250,000 in your bank account, it will all be covered. Period. Do you honestly think the federal government will fail?</p>
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and having watched bank after bank collapse, would it be wise to pull out before this crisis starts affecting commercial banking?
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banks collapse every year. Why would you pull out of the banks? Explain your reasoning. What would be the positives? If you can't list the positives, then there is no reason to take your money out. As has been stated, your money is insured and backed by the federal government.</p>
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"But how do all these bank failures affect you? No big deal as long as your money is FDIC-insured right? Yes and no. As this credit crisis continues, it won't take long before the FDIC runs out of funding! There is approximately $53B available for bank failures and IndyMac has already consumed about $8B of it. So it could be entirely possible that the FDIC experiences funding problems in the near term which could be trouble for millions of depositors. The banking system is all about confidence. So if that confidence is lost, this could lead into a massive global bank run which obviously is not a desirable situation. But I think this scenario is highly unlikely as the government will not allow the FDIC to fail. The only viable solution is to print more dollars to fund FDIC on an as needed basis which eventually will drive the value of the dollar even lower! So yes, you'll get your insured money back, but quite frankly, the value of your money won't amount to much since price inflation would be rampant by then."</p>
<p>Financial Cents: What Happens to the U.S. Dollar if the FDIC Fails?
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<p>Your are quoting a blogspot.com post for national economic advice, from an SQA Engineer. That said, he states simple facts from introductory macroeconomics, including that the FDIC will not be allowed to fail. However, his post fails when he leaves the world of facts you can learn in textbooks and he starts looking for real world solutions. The federal government takes in roughly $2,700 BILLION ($2,700,000,000,000) per year in revenue, and state governments take in another $1,500 BILLION ($1,500,000,000,000), and local governments another $1,100 BILLION ($1,100,000,000,000) (remember this next time someone wants to raise taxes). Money can be moved from other projects to cover the banks. Banks are the foundation of the US economic system. They will not be allowed to fail as an industry. The ones who do badly will fail, and people will get their insurance, and the failed banks will be bought by others if there is something worth buying (see WellsFargo and Citibank fighting over who got to take on the assets of the "failed" Wachovia).</p>
<p>And, if the solution is to "print more money" (which it obviously should not be), then you will feel the results of the inflation whether or not your money is in the bank. It will make no difference.</p>
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Seriously though? I'm prepared for a massive bank run. I've already figured out the locations to the ATMs owned by banks where I have money (although if I was really desperate, I could just run to the nearest Citibank and withdraw money from both banks) and I'm not spreading money out anywhere so that I'll be easily able to get cash out.
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<p>you haven't thought this plan all the way through. Have you also hired someone to stand by the ATMs 24/7 who all have access to your information so they can get your money out for you as soon as you send a mass text message giving them the 'go' signal?</p>
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I'm also thinking about buying precious metals.
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<p>have you looked at a graph for precious metal prices over the past 10-20 years? If you look at one, and still think that now is the time to buy... I don't know what to tell you. "Buy low, sell high". Not "buy high, and hope it goes higher".</p>
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I have zero confidence in the banking system. I'm thinking about diverting money to some other country (i.e. Switzerland maybe).
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<p>While swiss bank accounts are known for their stability, if you think the banks there will be unaffected by an economic collapse of the world's largest and most influential economy (USA), IMO you are misguided.</p>
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My grandpa had a 10K college fund for me, now it is considerably less. He believes the economy will pick up eventually, I can't say I believe him.
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<p>Look at the long term graph of the stock market</p>