July 24: How Much Of Your Money Is Safe?
It happened so far away people might not have noticed the IndyMac bank closed its doors three hours before closing time last Friday. No one at the door could get in to get their money.
Monday the bank opened under supervision of the Federal Deposit Insurance Corp.
All banks are created equal. There is a local bank with a board displaying ranking of all banks in Tyler. Only one has a rank of "A," the bank with the display.
If some do not know, on a bank account with more than $100,000, the balance above that amount is not insured. That amount is all you are guaranteed if the bank closes its doors.
Suppose you are a large employer and run your payroll through a local bank that closes. Someone will not get their pay because of this limitation. A business account is the same as a personal account, no insurance above $100,000.
In addition, the FDIC used up 10 percent of its reserve to take over IndyMac. A large regional bank failure could wipe out FDIC reserves, which are held in Treasury Notes and have to be sold to get cash for saving a bank.
Almost no bank has adequate reserves for a run on the bank. We have a fractional reserve banking system brought about in 1913 by enactment of the Federal Reserve Law, our newly formed central bank. It is owned by large money center banks and foreign banks and even some high powered money brokers. It is not a federal agency in spite of its name.
It is not subject to audit or oversight. It was created for the sole purpose of inflating the money supply and to stiff the people at the end of the daisy chain - that is us.
I made three trips to one bank to be sure all five accounts I have there are insured. I received three different answers, so am making changes on my money deposits. Maybe you should also if you care about your wealth. Will Rogers said he was more concerned with return "of his capital" than "return on the capital."
Jack Ludwick
Tyler
Tyler
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