Loading ...US Studying Guarantee of All Bank Deposits
They can come out and say they will guarantee all bank deposits but that was implied all along by having the FDIC and the recent actions taken after the bank failures. The problem isn’t just about not having the money to do so, it is the economic and financial conditions created by the steep rapid rate hikes. People can get 4-5% in money markets and others are buying gold and silver. That means only two things, withdrawals will continue until rates come down to slow down the outflow, or withdrawals will be controlled. ie no more than a certain amount per month. If they can’t make that work the banks will close temporarily, Bank Holiday and everyone not holding a wad of cash is screwed. https://www.zerohedge.com/markets/us-studies-how-guarantee-all-18-trillion-us-bank-deposits
It’s interesting how complicated this banking crisis is. I never realized that people might be pulling their money out of their bank accounts not because they want to store their money in a more secure place but because they want to store their money in a more profitable place. So, unless banks increase their interest rates on deposit accounts, they will all see an exodus of deposits moving out of them and into higher yielding places. I take it banks can’t afford to compete with such higher rates.
I always thought the best argument against following the government health guidelines during covid was that the same people who manage the national economy and financial policy are now giving us medical advice.
“I always thought the best argument against following the government health guidelines during covid was that the same people who manage the national economy and financial policy are now giving us medical advice.” Excellent point.