bostonbubble.com

melonrightcoast · Joined: 22 Feb 2009 Posts: 236 Location: metrowest

"The federal agency that insures bank deposits... is facing a potential major shortfall in part because it collected no insurance premiums from most banks from 1996 to 2006.

The Federal Deposit Insurance Corporation, which insures deposits up to $250,000, tried for years to get congressional authority to collect the premiums in case of a looming crisis. But Congress believed that the fund was so well-capitalized - and that bank failures were so infrequent - that there was no need to collect the premiums for a decade, according to banking officials and analysts."

Wow. So now, our money in banks isn't even safe. I wonder how many people will start pulling their money out of the banks now...

http://www.boston.com/news/nation/washington/articles/2009/03/11/now_needy_fdic_collected_little_in_premiums/?p1=Well_MostPop_Emailed7
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melonrightcoast · Joined: 22 Feb 2009 Posts: 236 Location: metrowest

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WestCoastXPlant · Guest

It's been done for years in Eastern Europe...apparently here during the GD too --
[url]
http://www.foxnews.com/story/0,2933,449114,00.html[/url]
http://globaleconomicanalysis.blogspot.com/2009/03/are-mattresses-safe-cash-stash.html

There is always the backyard too Smile

There is a reason crime rises really fast in hard times -- people keep more money on hand, more people are desperate for cash, and police is usually stretched thin. I do very much doubt that the US will let depository banks fail though -- I know of countries where the banks can't get people to bring their money in a decade after the last failures. I bet if it comes down to that they will print in earnest.

gnulnx · Guest

I agree with trying to find somewhere safer to put money these days. I'd also avoid gold since it's at an all time high like a previous poster said. But what about oil? Oil is a finite resource just like gold...only we use oil much faster than we use gold.

Also the best kicker is that oil is at a serious low right now. Sure it could move up and down, but I'm willing to bet you have a better chance of money in oil being profitable (or even at worst) in 3-5 years from now.

i think oil goes back up to 50-75 range on it's own even in a down economy. When the economy starts it's recovery (if it starts it's recovery) will push oil higher. We are essentially at peak oil right now...give or take 5 years.

melonrightcoast · Joined: 22 Feb 2009 Posts: 236 Location: metrowest

melonrightcoast · Joined: 22 Feb 2009 Posts: 236 Location: metrowest

gnulnx · Guest

Oil is liquid depending on how you look at it. You can buy the USO ETF which tracks the price of oil pretty well. As far as paying with oil...you have a point there. Ultimately everything in this country is payed for in dollars (for the time being) so I guess you just sell oil and get cash.

I do agree that real long term oil won't be a good play because governments will have to intervene to keep the price down at some point. For now oil seems as good as anything else....almost as good as that matress!

Oh what interesting times we live in.

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john p · Joined: 10 Mar 2006 Posts: 1820

This is more serious than I imagined. I thought we had some pretty smart people running things. It is kind of shocking.

This also aligns with my theory about how properties go through a metamorphis of state. The whole shift in properties from one state to another i.e. how ice has structural properties, water has buoyancy, and vapor is gaseous. Just like Clinton wanted to hit the "Reset" button with our relations with Russia, this whole deformation of fundamental properties sort of cleans the slate.

I know this sounds crappy, but quite frankly, people want health care and they haven't saved any money. How do you figure that one out. You can't get elected if you tell people that you can't get services that you don't pay for so what do you do? It seems evident that we need to make the mistakes first miserably and then we readjust. The day of reckoning has come and our solution is to dillute the poison and not bite the bullet and take the pain and amputate / make poisoned banks or those that overreached go bankrupt. It is definately unfair, but like someone on this blog told me, democracy is two wolves and a sheep voting for what to have for dinner. The responsible people lost the election. Many of the responsible people thought their candidate won, but will find out pretty quickly that they chose wrong as Obama breaks promise after promise after promise. It is awful that he signed the Omnibus Bill. He promised to stop earmarks during his campaign and now he says earmarks are good. He said that business as usual will end, but then he hands the reigns to Pelosi and Reid and they go on a spending frenzy. Ask yourself, is it a good idea to borrow more money when you're already in debt? Can you build a society based on those values?

Sadly, civilizations never learn. People vote their self interests and peacetime usually ends when people's industrious values dissolve. At first, you get mob rule and the masses demand entitlements and when they eat through all of that there is one last reset button.

That reset button is War. That is how unsustainable policies play out. People need to start being predators. War is when people can't or won't do for themselves and the food runs out and they need to take their neigbors. It is not heartlessness that people don't want to spend, it is realistic understanding of how this whole thing plays out.

Alan Greenspan wrote a piece in the WSJ yesterday because he was pissed that people were blaming him for this crash. He basically said what many of us are saying, that we didn't get trickle down economics because all the wealth went to China.

The only other peaceful solution to all of this is the change of state and reset of the values of currency. If people in the international community agree to other nations dilluting their currency in order to dillute their debt which will of course create winners and losers, WW III might be avoided. Given the fact that we can't even rely on the Western Europeans to support our spending/ currency manipulation policy, I'm fearful that the US will be encircled.

melonrightcoast · Joined: 22 Feb 2009 Posts: 236 Location: metrowest

GenXer · Joined: 20 Feb 2009 Posts: 703

Nothing is immune. We must allow for a small chance that anything can happen, which is a lesson reinforced by this recession. If all your money is in a bank, you basically are not diversified enough! The money can be safe and insured, but it is probably a better idea to spread your money around a little bit. Investments in the stock market can be a part of your portfolio. So can different types of bonds. Cash in the bank is another investment, and money market accounts in big mutual fund companies (such as Fidelity and Vanguard) are also a good thing to have.
Buying oil or any other commodity is the least safe approach (guaranteed to lose money). If treasuries are good enough for Chicoms, they are good enough for everybody else.