Fdic - Your Dollars are Safe!

July 5, 2001

Most of us have insurance. Auto insurance especially, since accidents do happen, and one can never predict when some nutty, pimple faced, testosterone soaked, teenage male will attempt to test GM's differential gears with his hopped up V-8, and lose control of it. Most of us have hospitalization, some have life insurance, (I hope not whole life) and most of us have a homeowners policy, which covers fire, accidents, and broken pipes, among others. It is said that the insurance companies have assets the equivalent of 82% of the value of American properties. This is an impressive figure…to put it mildly. My claims on insurance in my entire life have been less than $800, so they have made out fine on my account. I hope you have been as careful and lucky as have I!

Then there is the so-called "Social Security" system, installed by FDR and his Democrat Congress. (FDR is probably the worst president we have ever had, or if not, is at least on a level with LBJ and Abe Lincoln.) Social Insecurity is a better term for it, as it is nothing more than a fantastic Ponzi scheme. It is said that much of today's youth believes it will never receive a cent of the massive amounts of dollars extracted from their paychecks every week to fortify this boondoggle. I think they will get it as promised, but of course perhaps in worthless greenbacks.

However this is about dollars in the bank you deal with, not Social Security; although they are interrelated. Interrelated, because both are programs sponsored, administered, and funds paid, by the federal government. Other insurance companies are owned and operated by the private sector, and aside from an occasional glitch, they seem to operate satisfactorily. Of course no insurance company will insure you if they think you may actually use it, as the pay-outs would bankrupt them. Actuaries determine, based on actuarial tables, how much you pay in premiums, and if you get insurance at all. If there is a pretty good chance you will use the insurance, you probably won't be able to purchase any. This is why insurance companies are so wealthy. When hurricanes blow Florida away, the losses for insurance companies are huge, and after paying legitimate claims, many refuse to insure Florida any longer. It's the same reason that teen-aged boys have a hard time getting their cars or themselves insured. There's just too much risk.

It's fun to go to the bank with a deposit, and look at the lovely, impressive, imprimatured sign boasting that the bank has insurance with the FDIC (Federal Deposit Insurance Corp.) to the extent of $100,000 on each account. It sort of gives you a sense of strength! A sense of security…and, well…just a happy feeling of permanence, and rock solidarity. Gee Dad, it's a Wurlitzer! Ain't life grand, knowing your dollars are safely tucked away in the vault, and that the FDIC will shoulder any chance of a financial meltdown, crooked bank officers, bad loans, or other mayhem? Really?

Let me assure you that this institution

enjoys the full backing of the US government.

We have already looked at the private insurance companies and their assets, so we know that if we get burned, flooded, or in some way inconvenienced, we will be taken care of; but how about the FDIC? A few years ago, the FDIC had less than a nickel tucked away for each $100 worth of insurance, and now it may be no more than a penny or two; non copper pennies, of course. Does it make you feel secure to know that your bank deposits are insured by an insurance company with a cent or two on deposit for each $100 worth of insurance? Not me, but then I never have any dollars in a bank other than "float" between checks and cash being deposited and withdrawn a few days later, when the checks are paid to another bank. A thousand or so maybe, but no savings accounts, CD's, or the like. When I get extra bucks, I immediately turn them into something tangible, like the old Mercedes I spoke about in a former piece, but mostly more gold and silver. Understand, gold and silver owe nothing. They don't have to pay up, or be insured, because they themselves are the value.

So, if the corner bank goes belly up, what happens to your deposits? They will be paid by the FDIC, of course. It happens a couple of times a week somewhere in America, and it is promptly paid. The FDIC hasn't had a run that taxes its reserves as the FSLIC (Federal Savings & Loan Insurance Corp.) did a few years ago, which broke it. But it still paid. The pressman pushed the "start" button, and the payments rolled off the presses. If there were ever a major dollar meltdown, and banks everywhere were insolvent, the same thing would happen, so your dollars are safe. As long as there are trees to cut, paper to make, and ink and presses available, you will be secure in your dollars. Oh yes, I forgot to tell you: Since the dollar has lost most of its purchasing power anyway, what began as a $3,000 FDIC insurance on your deposits, became $10,000, was raised to $40,000, and then to the current $100,000. When a pack of cigarettes has gone from 13 cents to $2.25, gasoline from 19 cents to $2 a gallon, and homes in the same ratio, the "insurance" on your account had to be increased. It's a simple proof that dollars are a poor way to save! The FDIC is only a pseudo insurance company. It would fail any test of a legitimate insurance institution, as it has virtually no assets to back its insured. Like Social Security, any major claims would be paid via bookkeeping gimcracks and the printing press. All Social Security involuntary withdrawals from your paycheck, are simply used to pay current bills, and there isn't a silver dime in the entire Social Security "trust fund," as they like to call it. The FDIC has a few million dollars stashed away to satisfy the few bank failures that occur every month, but if a massive meltdown occurred, your deposits would be paid in bright, stiff, uncirculated, bills, fresh off the presses. And with the presses running night and day to pay your dollar deposits, their purchasing power would be vanishing like the Indian Monkey Boy, when an intelligent person with a camera tries to find him. A pack of Marlboros will eventually cost $20. That sounds as silly as telling someone in 1955, when they were 13 cents, that eventually they would cost $2.25. My Mom and Dad, bought the 6 bedroom, 4 bath, 3 storey, brick home in which I was raised in the northwest section of Washington D.C. for $3500 in 1935. If you told them it would sell for 70 times that, 60 years later, they would have thought you to be balmy! When they bought their new 1940 Plymouth for $660, they would have you committed if you told them that a new Plymouth would cost 30 times that 40 years later.

For you non thinkers who keep saying, "My heavens Ermatrude, bread has gone up again," STOP AND THINK. PRICES DON'T GO UP. DOLLARS GO DOWN. STOP SAVING IN DOLLARS! But don't worry about it if you do save in them, because the NUMBER of dollars is secure. It's the PURCHASING POWER of them that is as secure as a noise ordinance on the 4th of July. Yes, Ermatrude, your savings account is secure, and the dollars will be paid if the bank goes under. Yes Hortense, the FDIC is there to make your dollars secure from bank shenanigans and robbers. All will be fine if it is dollars you save in, and depend upon for your security. And of course your Social Security checks will be issued, you young whippersnapper. After all, don't you know that the monetary system is based upon "The Full Faith and Credit of the U.S Government?" What more could you ask?

I depend upon things I can see, touch, feel, and admire, and you should also. I depend on my home, tangibles in all forms such as my tools, that old Mercedes, my safe full of goodies, my pistols and other firearms that remain loaded, and my intelligence and fortitude. I save in gold and silver, which owe no one, and don't depend on fallacious promises, contracts and "insurance" issued by the fatuous fatheads in D.C. After all, can this nonsense continue much longer? Will our dollars be further diluted with a pointless war somewhere in the world, as has happened several times already? They will continue to be diluted by the ever larger bureaucracy's payroll and reckless spending, that's for sure. When government spends $2 trillion, and collects $1.7 trillion, they print the balance, thereby diluting the existing dollars. It's as if you watered down your Jack Daniels. It just doesn't have the strength it had before dilution. The Black Jack doesn't kick, and the buck doesn't buy. Protect yourself.

According to the Talmud you should keep one-third of your assets each in land, business interests, and gold.

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