Actually in the 1920's leading up to the day before the stock market crash and subsequent bank runs, the powers that be did in fact calm the public with "everything fine.. seriously.. what could possibly go wrong?"
I think, some "doom and gloomers" are professional, semi professional players in the financial world.. most know what they are talking about. As I said before, we see the same numbers and come to different conclusions.. I do not put my faith in ANY government structure to ensure... anything quite honestly. Let alone the economy.
Of course you have the people who don't know what they are talking about, and yes, even those who openly wish for a collapse to happen..
I think I am fairly certain you are intelligent enough to know the difference..
Fact of the matter is, there are a very large population of citizens with 100k+ in accounts .. through CD's and so forth .. unsuspecting people.. in my office I heard regular stories of people who talked to farmers and factory line workers with well over 200k accumulated in accounts just sitting there..
ANY bank collapse, of a major institution anyways, is cause for SERIOUS concern .. I have not gotten over the Fire Sale of Bear Sterns lol .. no doubt they have plans in the works for Indymac .. and several other major institutions threatened by the current crisis .. which it is a crisis ..
The Fed no doubt may be readying to give the financials a couple billion more to speculate in the energy markets..
mybigunit:
The FDIC was never intended to "insure" the economy.. it was designed to pacify the people into thinking they are safe..
It is also designed for small localized banks, who only have regional influence.. smaller credit unions for instance..
Bigger banks with tens of billions in holdings... the FDIC can handle one, but more then that? .. I would hazard a guess that if we saw two or more major banks collapse .. assuming it survived the first major bank .. the FDIC would go belly up, and a true economic collapse would occur..
Of course, they can always flood the market with cash .. yes your numerical number in dollars is saved .. but the economy collapses anyways and we end up needing a wheel barrel full of Dollars to buy a loaf of bread..
LID:
Indymac would be entirely secured by the FDIC however, Indymac is also primarily a loaning institution .. imagine Bank of America going under or Fannie Mae, Chase .. these institutions are feeling the most pressure from the current crisis and not even the FDIC would save it..
Not that it matters .. a major bank failure would incite a massive run on the banks .. not to mention the economic fallout ..
FiatLux:
Interesting .. you believe in the concept of "fiat money" .. Assuming you know the Latin behind your own screen name, Fiat money is quite literally "value by decree" .. sponsored by a person or entity that can enforce the value by any means necessary.
Gold is a Fiat currency because to use Gold or Silver as a standard there needs to be a Governing Mandate, or Fiat, to administer the value of the metals..
In other words, it works the exact same way as Gold ..
You have 1 dollar and you buy a pound of rice to eat .. the rice seller takes your dollar because he paid 50 cents for the pound which he paid to the grower who paid 10 cents for the seeds. Because the seeds where bought in dollars, the grower sells in dollars to buy more seed, the buyer then sells in dollars because he gets his produce that way, via dollars, and the buyer getting that pound of rice uses dollars because it's the only way he can eat. Everyone thus takes dollars..
So does the dollar have value? Absolutely. Just a government mandate? Doesn't matter.. it's still accepted and thus has a perceived value. The value of one dollar then decreases or increases depending on the readily available supplies of dollars.
Take the same scenario .. and take out all the words "dollars" with "ounce of gold"
Same thing.
Gold inflates, deflates and crashes just like any other currency .. in fact, the Great Depression, which is essentially a title, it was a Depression, was not the first in American history..
Dollars by issue of a Fiat is not the problem in this society .. it is instead Credit which is the problem in this society..
It has only the value based on whether you can pay it back. If you can't, it's no longer worth anything ...
Insert banking crisis.
And yes, the Great Depression was not caused by Dollars by Fiat but rather over extended Credit, in which the Government then tried to tie off and limit, resulting in massive buying power reductions and consequently a collapse of the economy ...
Which is why the Fed sacrificed the Dollar to inflation, because to restrict Credit entirely would have created a Great Depression.
Isn't economics fun?
