A SIMPLE QUESTION

[Mortblanc]

The situation we have here is that the banks are insured for the deposits they hold.

If a bank goes under the assets, liabilities and accounts are merged into another insured bank and you never know your bank failed unless you read it in the news. Your bank statement just comes to you on a new letterhead next month.

And it is an insurance program. The banks pay premiums based on their stability, size and loan values.

Over here we had a major melt down back in 1991-1992. More banks failed and were "bailed out" by the insurance program than were before or have been since. I believe it was more than 3,000 individual banking corporations. It left the program with its funds depleted, but intact.

What was the result?

The insurance premiums were increased.
The individual deposit insured were increased from $100,000 to $250,000.
More types of deposits were included in the insured class.
Many smaller banks were consolidated into larger organizations by the new costs.
Rules allowing our individual states to regulate banking were almost eliminated and National rules written.

Regular depositors did not lose a penny of their insured funds. The biggest losses were to individuals with uninsured funds and assets. Banks were selling bonds, Certificates of Deposit and offering various high yield accounts that were exempt from the insurance. When the banks went under that was wiped out with no compensation for the depositor. Don't gamble with what you can't afford to loose.

My own bank account is the place where my pension check is deposited. The amount left is not enough to worry about.

If by good fortune I wind up with a surplus from month to month, above my emergency fund, I withdraw it and buy something durable. That is why there is an RV, garden tractor, shed filled with garden tools, SUV x2, fishing boats x2 a nice TV and a very comfortable leather recliner to rest in.

Occasionally I will even take a holiday.

Precious metals are not something for one to consider over here if they have a brain in their heads. We do not have a history of our government confiscating bank accounts but we do have a history of our government confiscating precious metals!

Yep, they will make ownership of precious metals a crime with confiscation of the wealth and prison time attached. Ownership of gold bullion was illegal between the 1930s and 1970s. Only gold jewelry of specific carrot limits was allowed.