What happens if our banking system fails?

Discussion in 'Politics' started by tinytim, Sep 25, 2008.

  1. tinytim

    tinytim
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    I know account holders are insured up to $100,000 by the Fed. Government through FDIC... but the pledge, "Backed by the full faith and credit of the United States government" Seems kinda empty right now...

    I know I am not a math whiz... and I could be off my rocker but here is what I figured out a few minutes ago... (If someone has more concrete facts, please share them) but...



    US Population = 242,677,893 age 16 and over… (CIA fact book… July 2008 estimates)
    If only ½ of them have a bank account.. = 121,338,946.5
    IF only ¼ of those with accounts have $100,000 in the bank… That would be $3,033,473.662,500
    3 TRILLION DOLLARS!
    And what about people with more than $100,000 in their accounts?

    Where would this money come from?

     
  2. KenH

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    What happens if the banking system fails? We start over.

    And I am not convinced that this bailout plan will stop it from eventually happening.
     
  3. exscentric

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    Heard on pbs that fdic has a fund that took a huge hit already and that it had 84 billion left and WAMU failing would take 40+ billion to cover - and the thought was what then.

    I don't know what happens when the fund goes empty - assume that the congress has to lay in a big pipeline to it.
     
  4. Crabtownboy

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    So, should we all get a fair amount of cash and stash it in a safety deposit box?
     
  5. Major B

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    If the banks collapse, currency will be worthless.
     
  6. tinytim

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    Can you, or someone explain this to me?

    I have never understood our banking system.
     
  7. Major B

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    How Our Banking System Works (or don't)

    It all started with the fact that a shepherd's wife, a long time ago, had a cold, so she wanted some chicken soup. The sheperd went to market that day to trade for some chickens, but found that it was very difficult to make change for a sheep, and the chicken merchant only had two yardbirds, so the shepherd got a really bad deal. Because of things like this, people started using money. At first it was copper, because that is all they could work, then it moved to Gold, Silver, and Platinum, then, for a long time, it was paper, then plastic, then the ultimate medium of exchange, the PIN number.

    When we were trading sheep and chickens and other stuff, they called that "bartering" (which I thought at first had something to do with a bar, but it does not). The only way that a market could collapse then was if the tent pegs got loose, but we had to have civilization so we could charge a huge flatscreen with our PIN number and use the screen to watch every NFL game at the same time. This is why we developed civilization (but if we had known that civilization included Paris Hilton, Britney, and Jerry Springer, we would have stayed primitive).

    So, how a banking system works is this:

    1. Stock brokers have to wear suits that cost more than my car and cars that cost more than my house, and houses that cost so much that the subprime loan stock market (no relation to the USDA Prime steak market though they sound alike) got all messed up from them floating bad paper. Now, if they'd have asked me, I would have told them that paper did not float, good or bad.

    2. Then investors got really scared, because actually, the money is not theirs, it belongs to that nice Mrs. Finkelstein, who buys a new caddy every Fall and drives to Fort Lauderdale (which doesn't have a fort any more, but has a lot of people named Finkelstein and Rubenstein, and Stokylivich). If the subprime beef market smells bad, she won't be able to get her caddy and will have to settle for her old caddy.

    3. So, Mrs. Finkelstein called Bill O-Reilly and Larry King on the phone and complained, but they had a lot of money in the market too, which is how we got from making change for a sheep to not being able to finance Mrs. Finkelstein's annual trip to Fort Lauderdale, that place in Florida which doesn't have a fort any more, but it does have a lot of very nice older Hebrew People who now think Alan Greenspan is a Yutz.
     
    #7 Major B, Sep 25, 2008
    Last edited by a moderator: Sep 25, 2008
  8. ReformedBaptist

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    If you have more than $100,000 in a bank account, then move your money into more than one bank.
     
  9. Major B

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    If I put it in a mattress, is there a limit per matress?
     
  10. ReformedBaptist

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    :laugh:
    yes, one must include my own. Please IM for mailing directions. :laugh:
     
  11. tinytim

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    lol:laugh:
     
  12. poncho

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    #12 poncho, Sep 25, 2008
    Last edited by a moderator: Sep 25, 2008
  13. betterthanideserve

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    The same place that money has always come from! "OUT OF THIN AIR"

    Our financial system was doomed to fail from the start,it is and always has been a poncy scheme-pyramid scheme ,and now since they have run out of dumb participants they decided to involve" international investors" The idea of a Global economy?"
    we haven't used real money since the gold standard was eliminated,and now we are paying the HIGH price of FIAT money.
    Every nation that has or does use Fiat Currency is bound to failure!
    [/COLOR][/QUOTE]
    Oh Yea, by the way everything that has happened in the last week was accidental.....
    NOT!
     
    #13 betterthanideserve, Sep 25, 2008
    Last edited by a moderator: Sep 25, 2008
  14. TomVols

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    Our banking system is a little too complex for just one post. This site has a rudimentary explanation: http://money.howstuffworks.com/personal-finance/banking/bank.htm

    Let me say this: if the banking system fails as a whole, then the FDIC is probably doomed, too. The top three banks alone in this country have a combined $6 billion in deposits. Another 3 billion in banks 3-7. There's an awful lot of coin in America's banks.

    This "FDIC only covers you up to $100,000" is not true. You are insured up to $100,000 per depositor per joint account and $100,000 per solo account. And you can have an additional $250,000 in a bank deposit IRA. And you are entitled to more if you have beneficiaries, a trust, and in other ways. There are people who have $600K in one bank and it's ALL insured because of the way the accounts are set up. Check out more at www.fdic.gov Their "Edie" tool is a good way to see how much protection you have.
     
  15. LeBuick

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    Interesting, so the economy fell because Ms Finkelstein didn't go to the missing Fort to buy her annual cup of coffee...

    interesting... :thumbs:
     
  16. LeBuick

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    Then why do we need to give $700 billion?

    That's about $99,800 more than I need insured.
     
  17. LadyEagle

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    So, maybe we should withdraw our money and put it under our mattresses. Some really old timers never trusted banks. Now I know why.
     
  18. Major B

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    No, it was because of the cancelled Streisand concert...
     
  19. tinytim

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    NO.. that's the worst thing someone can do...

    It's hard to sleep with all that cash under you! YOur matress will get lumpy :laugh:
     
  20. ReformedBaptist

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    Have some money in the banks, invest money. There are a lot of cheap stocks out there right now!
     

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