# The Economic Collapse Blog Has Issued A RED ALERT For The Last Six Months Of 2015



## BillS

Near the end the author quotes a number of forecasters. There are a number of charts that didn't copy. You'll have to click on the link.

http://theeconomiccollapseblog.com/...d-a-red-alert-for-the-last-six-months-of-2015

I have never done anything like this before. Ever since I started The Economic Collapse Blog in late 2009, I have never issued any kind of "red alert" for any specific period of time. As an attorney, I was trained to be level-headed and to only come to conclusions that were warranted by the evidence. So this is not something that I am doing lightly. Based on information that I have received, things that I have been told, and thousands of hours of research that have gone into the publication of more than 1,300 articles about our ongoing economic collapse, I have come to the conclusion that a major financial collapse is imminent. * Therefore, I am issuing a RED ALERT for the last six months of 2015.*

To clarify, when I say "imminent" I do not mean that it will happen within the next 48 hours. And I am not saying that our problems will be "over" once we get to the end of 2015. In fact, I believe that the truth is that our problems will only be just beginning as we enter 2016.

What I am attempting to communicate is that we are right at the door of a major turning point. About this time of the year back in 2008, my wife and I went to visit her parents. As we sat in their living room, I explained to them that we were on the verge of a major financial crisis, and of course the events that happened a few months later showed that I was right on the money.

This time around, I wish that I could visit the living rooms of all of my readers and explain to them why we are on the verge of another major financial crisis. Unfortunately, that is not possible, but hopefully this article will suffice. Please share it with your friends, your family and anyone else that you want to warn about what is coming.

Let's start with a little discussion about the U.S. economy. Most of the time, when I use the term "economic collapse" what most people are actually thinking of is a "financial collapse". And we will talk about the imminent "financial collapse" later on in this article. But just because stocks have recently been hitting all-time record highs does not mean that the overall economy has been doing well. This is a theme that I have hammered on over and over again. It is my contention that we are in the midst of a long-term economic collapse that has been happening for many years, that is happening as you read this article, and that will greatly accelerate over the coming months.

Let me give you just one quick example. When an economy is healthy, money tends to circulate fairly rapidly. I buy something from you, then you take that money and buy something from someone else, etc. In a stable and growing economy, people generally feel good about things and they are not afraid to spend. But during hard times, the exact opposite happens. That is why the velocity of money almost always slows down during a recession. As you can see from the chart below, the velocity of money has indeed gone down during every recession since 1960. Once a recession is over, the velocity of money is supposed to go back up. But a funny thing happened after the last recession ended. The velocity of money continued to go down, and it has now hit an all-time record low&#8230;

Velocity Of Money M2

This is the kind of chart that you would expect from a very sick economy. And without a doubt, our economy is sick. Even the official government numbers paint a picture of an economy that is deeply troubled. Corporate profits have declined for two quarters in a row, U.S. exports plunged by 7.6 percent during the first quarter of 2015, U.S. GDP contracted by 0.7 percent during the first quarter, and factory orders have declined year over year for six months in a row.

If the stock market was connected to reality, it would be going down. But instead, it has just kept going up. As I discussed yesterday, this is a classic case of an irrational financial bubble. If I was writing an economic textbook and I wanted to include an example of what a run up to a major financial crash looks like, it would be hard to come up with anything more ideal than what we have watched unfold over the last six months. Just about every pattern that has popped up prior to previous stock markets crashes is happening again, and this is something that I have written about so much that many of my readers are sick of it.

And without a doubt, our financial markets are primed for a crash.

Only two times before has the S&P 500 been up by more than 200 percent over a six year time frame.

The first was in 1929, and the stock market subsequently crashed.

The second was in 2000, right before the dotcom bubble burst.

And by just about any measure that you can possibly imagine, stocks are massively overvalued right now.

For instance, just check out the chart posted below. It comes from Doug Short, and it shows that the ratio of corporate equity prices to GDP has only been higher one time since 1950. That was in 2000 just before the dotcom bubble burst&#8230;

The Buffett Indicator from Doug Short

Let's take a look at another chart. This one comes from Phoenix Capital Research, and it shows that the CAPE ratio (cyclically adjusted price-to-earnings ratio) has rarely been higher. In fact, the only times that it has been higher we have seen stock market crashes immediately afterwards&#8230;

CAPE - Phoenix Capital Research

Yale economics professor Robert Shiller is also deeply concerned about the CAPE ratio&#8230;

I think that compared with history, US stocks are overvalued. One way to assess this is by looking at the CAPE (cyclically adjusted P/E) ratio that I created with John Campbell, now at Harvard, 25 years ago. The ratio is defined as the real stock price (using the S&P Composite Stock Price Index deflated by the CPI) divided by the ten-year average of real earnings per share. We have found this ratio to be a good predictor of subsequent stock market returns, especially over the long run. The CAPE ratio has recently been around 27, which is quite high by US historical standards. The only other times it has been that high or higher were in 1929, 2000, and 2007-all moments before market crashes.

But the CAPE ratio is not the only metric I watch. In my book Irrational Exuberance (3rd Ed., Princeton 2015) I discuss several metrics that help judge what's going on in the market. These include my stock market confidence indices. One of the indicators in that series is based on a single question that I have asked individual and institutional investors over the years along the lines of, "Do you think the stock market is overvalued, undervalued, or about right?" Lately, what I call "valuation confidence" captured by this question has been on a downward trend, and for individual investors recently reached its lowest point since the stock market peak in 2000.

Other valuation indicators produce similar results. This next chart is another one from Doug Short, and it shows the average of four of his favorite valuation indicators. As you can see, there is only one other time when stocks have been more overvalued than they are today according to the average of his four favorite indicators, and that was just before the stock market crashed when the dotcom bubble burst&#8230;

Four Valuation Indicators - Doug Short

Another one of the things that indicates that a financial bubble is happening is the level of margin debt. Whenever margin debt has gone over 2.25% of GDP a stock market crash has always followed, and today it is far above that level. As you can see from the chart below, there have been three major peaks in margin debt in modern U.S. history. One was just before the dotcom bubble burst, one was just before the financial crisis of 2008, and the third is happening right now&#8230;

Margin Debt - Doug Short

Something else that we would expect to see prior to a major financial crisis is a decoupling of high yield debt and stocks. This is something that happened just prior to the stock market crash of 2008, and it is happening again right now. The following chart comes from Zero Hedge, and it demonstrates this brilliantly&#8230;

S&P 500 HY Credit

Are you starting to get the picture?

And as I discussed yesterday, the smart money is beginning to pull their money out of stocks while they still can. According to USA Today, mutual fund investors have pulled more money out of stocks than they have put into stocks for 16 weeks in a row&#8230;

In a sign of stock market nervousness on Main Street, mutual fund investors have yanked more money out of U.S. stock funds than they put in for 16 straight weeks.

The last time domestic stock funds had positive net cash inflows was in the week ending Feb. 25, according to data from the Investment Company Institute, a mutual fund trade group.

In the week ended June 17, the most recent data available, mutual funds that invest in U.S. stocks suffered net outflows of $3.45 billion, according to the ICI.

Since late February, U.S. stock funds have suffered estimated outflows of nearly $55 billion. Those net withdrawals come despite the fact the benchmark Standard & Poor's 500 hit a fresh record high of 2130.82 on May 21 and the Dow Jones industrial average notched a fresh record on May 19.

But it isn't just stocks that are going to crash during the next financial crisis. Bonds are going to crash as well, but what I am concerned about most of all are derivatives.

Derivatives are going to play a starring role in the next major financial crisis. I cannot emphasize this enough. In fact, if you want to listen for just one word on the news that will let you know that things have started to really unravel, just listen for the word "derivatives". This form of legalized gambling is going to crush "too big to fail" banks all over the planet during the next major financial downturn. The "too big to fail" banks in the U.S. alone have 278 trillion dollars of total exposure to derivatives, but they only have 9.8 trillion dollars in total assets. To say that they are being "reckless" is a massive understatement.

For much more on the coming derivatives crisis, please see my previous article entitled "Warren Buffett: Derivatives Are Still Weapons Of Mass Destruction And 'Are Likely To Cause Big Trouble'".

Of course I am not the only one that is sounding the alarm about what is coming. Just consider what some very prominent individuals have been saying recently&#8230;

Ron Paul has just released a new video in which he warned all of us to "prepare for a bear market in bonds".

Carl Icahn says that financial markets are "extremely overheated-especially high-yield bonds".

Max Keiser recently told Alex Jones that a great financial collapse is coming.

Martin Armstrong says that his Economic Confidence Model predicts that the "Big Bang" is coming in "2015.75".

Jeff Berwick of the Dollar Vigilante says that "we're getting very, very close to the next crisis collapse" and he has specifically pointed to the month of September.

James Howard Kunstler has predicted that stocks are going to "crater in Q3 as faith in paper and pixels erodes".

Lindsey Williams recently sent out an email alert in which he warned that his elite friend has told him that "they have a World Wide Financial Collapse scheduled between September and the end of December 2015".

Gerald Celente has warned about "the Great Panic of 2015".

Bill Fleckenstein has said that 2015 could be the year of the "big accident".

Ray Gano has stated that we will see a financial collapse "probably starting in the third quarter of 2015″.

Legendary investor Jim Rogers recently said that he believes that "we will see some kind of major, major problems in the world financial markets" within the next year or two.

Alex Jones recently released a video in which he explained that he recently received "two different calls" from "extremely prominent wealthy people" warning him about what is coming by the end of this year and asking him why he isn't leaving the United States "before October".

Bible prophecy expert Joel C. Rosenberg has posted an ominous message on his personal blog in which he warned that "something is coming" and that "we must be ready"&#8230;

I feel a tremendous sense of urgency about this column.

The United States is hurtling towards severe trouble, and the events of the past few months - and what may be coming over the next few months - grieves me a great deal.

Something is coming. I don't know what. But we all must be ready in every possible way.

When I read what Rosenberg wrote, it struck me that it was precisely how I have been feeling too.

In my entire life, I have never had such an ominous feeling about any period of time as I have about the last six months of 2015. Like Rosenberg, I feel a "tremendous sense of urgency", and I feel a great need to warn as many people as I can.

And it isn't just a financial collapse that I am concerned about. In a previous article, I detailed seven key events that we are going to witness before the end of this September&#8230;

Late June/Early July - It is expected that this is when the U.S. Supreme Court will reveal their gay marriage decision. Most believe that the court will rule that gay marriage is a constitutional right in all 50 states. There are some that believe that this will be a major turning point for our nation.

July 15th to September 15th - A "realistic military training exercise" known as "Jade Helm" will be conducted by the U.S. Army. More than 1,000 members of the U.S. military will take part in this exercise. The list of states slated to be involved in these drills includes Texas, Colorado, New Mexico, Arizona, Nevada, Utah, California, Mississippi and Florida.

July 28th - On May 28th, Reuters reported that countries in the European Union were being given a two month deadline to enact "bail-in" legislation. Any nation that does not have "bail-in" legislation in place by that time will face legal action from the European Commission. So why is the European Union in such a rush to get this done? Are the top dogs in the EU anticipating that another great financial crisis is about to erupt?

September 13th - This is Elul 29 on the Biblical calendar - the last day of the Shemitah year. Many are concerned about this date because we have seen giant stock market crashes on the last day of the previous two Shemitah cycles.

On September 17th, 2001 (which was Elul 29 on the Biblical calendar), we witnessed the greatest one day stock market crash in U.S. history up until that time. The Dow plummeted 684 points, and it was a record that held for exactly seven years until the end of the next Shemitah cycle.

On September 29th, 2008 (which was also Elul 29 on the Biblical calendar), the Dow fell by an astounding 777 points, which still today remains the greatest one day stock market crash of all time.

Now we are approaching the end of another Shemitah year. So will the stock market crash on September 13th, 2015? Well, no, because that day is a Sunday. So I guarantee that the stock market will not crash on that particular day. But as Jonathan Cahn has pointed out in his book on the Shemitah, sometimes stock market crashes happen just before the end of the Shemitah year and sometimes they happen within just a few weeks after the end of the Shemitah. So we are not just looking at one particular date.

September 15th - The 70th session of the UN General Assembly begins on this date. It is being reported that France plans to introduce a resolution which would give formal UN Security Council recognition to a Palestinian state. Up until now, the United States has always been the one blocking such a resolution, but Barack Obama is indicating that things may be much different this time around.

September 25th to September 27th - The United Nations is going to launch a brand new sustainable development agenda for the entire planet. Some have called this "Agenda 21 on steroids". But this new agenda is not just about the environment. It also includes provisions regarding economics, agriculture, education and gender equality. On September 25th, the Pope will travel to New York to give a major speech kicking off the UN conference where this new agenda will be unveiled.

September 28th - This is the date for the last of the four blood moons that fall on Biblical festival dates during 2014 and 2015. This blood moon falls on the very first day of the Feast of Tabernacles, it will be a "supermoon", and it will actually be visible in the city of Jerusalem. There are many that dismiss the blood moon phenomenon, but we have seen similar patterns before. For example, a similar pattern of eclipses happened just before and just after the destruction of the Jewish temple by the Romans in 70 AD.

In addition to everything above, quite a number of economic cycle theories that were developed by secular economists all point to big trouble for America between the years of 2015 and 2020. For more on this, please see my previous article entitled "If Economic Cycle Theorists Are Correct, 2015 To 2020 Will Be Pure Hell For The United States".

Earlier today, I publicly announced that I was issuing a RED ALERT for the last six months of 2015 on the Alex Jones radio show. You can watch video of that interview right here. In this article (which is about three times as long as one of my normal articles) I have only shared a small fraction of the information that has led me to issue this red alert. But if you want to know more, and you are not afraid to really go down the rabbit hole, I would encourage you to check out a full two hour presentation that I did down in Dallas, Texas on the nightmarish years that are coming.

The period of relative stability that we have been enjoying is ending. What comes next is going to lead us into the worst period of time in modern American history. I wish that I was wrong about this.

But the goal is not to scare you. My wife and I live our lives with absolutely no fear, and that is my desire for all of my readers. There is hope in understanding what is happening and there is hope in getting prepared. Personally, my wife and I believe that the greatest chapters of our lives are ahead of us, and I hope that you have a similar outlook.

We need a generation of people that are willing to rise up and do great things even in the midst of all the chaos and darkness that is coming. It is when times are the darkest that the greatest heroes are needed.

So what will you choose to do when the next crisis comes?

Will you cower in fear, or will you rise up to meet the challenge?


----------



## Marcus

BillS said:


> Ron Paul has just released a new video in which he warned all of us to "prepare for a bear market in bonds".
> 
> Carl Icahn says that financial markets are "extremely overheated-especially high-yield bonds".


The US bond markets have basically been a bull market with a few hiccups since the early 1980s.

As interest rates go down, the value of existing higher interest rate non-callable bonds soar.

But we're already at *historical low interest rates.* Up until recently, there had never been negative interest rates bonds. Now there has.

The point I'm making and the point I've tried to pound into people's heads is *DON'T OWN BONDS* at this point in the cycle. The generational bond bull market is ending, and with rates at such absurd low levels, the coming increase in interest rates is going to *devastate* bonds prices. That means that low rate bonds are going to lose huge chunks of value within a few years. How much? Try 20% at a minimum with 50-60% more likely.

The velocity of money has been going down for years. The major cause is banks are keeping excess reserves because the Fed is paying them to do so. It is one of the reasons this economic 'recovery' has been so anemic.

The high yield debt is going down for several reasons. Companies pay off this debt first or refinance it at lower rates. Consumers have also been paying off debt which also lowers the velocity of money. There is also a bit of a shortage in bond supply since a number of central banks are buying bonds as part of their QE programs.

I am aware of the tie in to the Jewish calendar and the 7 year cycle for upsets in the market. It *is* one of those things to be aware of.

High margin debt is troublesome during periods of rapid decline since it can cause the decline to accelerate as margin calls are made. *If you trade in the stock market, do not ever use margin debt* unless you are waiting for funds in transit to be credited to your account. In other words, one day is okay but three days is not. And even then, margin debt should *never exceed 10% of account valuation.* Otherwise, you're playing with fire and are at the mercy of the market.

One of the things to be aware of in regards to the CAPE is that the available risk-free return (US Treasury bond) is historically low. If interest rates were at 6% and we were seeing these levels, I would be concerned. But we're not at those rates and people are chasing returns. Again, it's one of those things to be aware of but not overly concerned about.

This article makes some valid points and is much better than that other one from the guy in Arizona.


----------



## ZoomZoom

Since:


The stock market is shaky.


Bonds aren't a place to go.


The dollar could be deflated.

Where's a good safe haven right now?


----------



## RevWC

ZoomZoom said:


> Since:
> 
> 
> The stock market is shaky.
> 
> 
> Bonds aren't a place to go.
> 
> 
> The dollar could be deflated.
> 
> Where's a good safe haven right now?


Mattress..or..Iceland.


----------



## Country Living

I vote for the fireproof / heatproof / moisture proof mattress (or a good built-in safe). Times are changing.

This situation goes beyond our stock and bond markets. There's been a move for years for the IMF to have a secondary (reserve) currency. It looks like it's going to be finalized this fall and the winner apparently will be the Yuan. I give the IMF less than five years for the Yuan to actually replace the dollar as the world-wide currency. 

If I remember correctly, initially the Euro was going to be positioned to become the reserve; however, the Euro has struggled. The Chinese saw an opportunity and pushed the Yuan as the reserve currency to the IMF. In reality, that makes sense. They have become a financial powerhouse coupled with the dollar losing some creditability. IMHO, their financial growth has been too much too fast and they lack monetary controls to stabilize their financial industry; however, they have the clout to make it happen. Or they can just hack into the IMF databases and do a "replace all".

The conspiracy theorist in me thinks the Chinese are going to do massive dumps of the dollar which will cause a huge upheaval in the markets and not just in bonds. I think we're in for a wild ride this fall.


----------



## BillS

ZoomZoom said:


> Since:
> 
> 
> The stock market is shaky.
> 
> 
> Bonds aren't a place to go.
> 
> 
> The dollar could be deflated.
> 
> Where's a good safe haven right now?


Physical cash, physical gold and physical silver after you're fully prepared.

I try to have half of money in gold and silver but I don't have a lot of money. If I had $50,000 and my mortgage was paid off, I would probably put $40,000 into gold and silver. Keep the rest as physical cash.

The dollar is going to die. If I had a lot of money I might want $10,000 or $20,000 in cash but have $100,000 in mostly gold. Junk silver coins weigh about $100 per pound so $50,000 in junk silver would weigh about 500 lbs. But if you had $50,000 in gold coins it would weigh less than 3 lbs. It would be a lot easier to hide, store, or take with you.


----------



## BillS

RevWC said:


> Mattress..or..Iceland.


https://www.dollarvigilante.com/blog/2014/03/25/us-citizen-no-foreign-bank-account-for-you.html

Faced with draconian penalties on foreign banks who accept US citizens countless banks worldwide are deciding it is easier and safer to just turn away all US customer business. Not to mention much cheaper.

This has been the case for a long time in regards to investments and brokerages. The SEC has made it clear to anyone worldwide that if you even offer investment opportunities to US citizens they will come after you with the full power of the US government. The reason, they say, is to protect the fragile and gullible American citizens from losing money in foreign investment opportunities. What it really does is limits the investment options of Americans dramatically&#8230; at a time when the US economy is tanking and other economies around the world have been booming.

One such example is at Peter Schiff's EuroPacific Capital in St. Vincents. EuroPacific has a great option&#8230; you can actually hold gold with them and have an ATM card where you can withdraw fiat dollars from your gold holdings. He opened up operations there because opening it within the US would have been too difficult regulatorily (sound familiar?). But, in order to get outside of those regulations they also do not allow American clients. In fact, they go so far as to not even answer the phone if it comes from a US area code!


----------



## Tweto

On Fox news and Fox Business, several of the on air personalities have made trips to Switzerland in the last 6-12 months. They don't say why they are going there, only that they will be gone for a few days. These trips are never on the same dates. O'Reilly, Hannity, Greta, Varney, and a few others have admitted to making the trip. Then Wednesday Dennis Miller said that he just returned from Europe. No news stories came out of the trips so I can surmise that they were personal trips. 

Could they be setting up accounts to protect their money?


----------



## hiwall

> Faced with draconian penalties on foreign banks who accept US citizens countless banks worldwide are deciding it is easier and safer to just turn away all US customer business.


I would guess that was the plan from the beginning - to keep US dollars IN the US.


----------



## BillS

hiwall said:


> I would guess that was the plan from the beginning - to keep US dollars IN the US.


Maybe there are foreign banks that will keep your accounts secret. I don't know how you get the money there though. Any US wire transfers would leave a trail. Maybe if you grease the right palms any and all records of your transactions are erased. Maybe.


----------



## readytogo

*Greed Glutony and Stupidity*

The Roaring Twenties, the decade that followed World War I and led to the Crash, was a time of wealth and excess a time of greed and gluttony a time of to much credit and not enough money to pay it back, more or less like now in Greece. Greece borrowed loads of money over the last 10 years or so - both from European banks and from other countries' governments. It used the 
money to run the country, pay for the 2004 Olympic Games and also for things like big pay rises for people who are paid by the government.
But when you borrow money, you have to pay it back, with what's called 'interest': meaning you pay back more money than you borrowed to begin with.Same thing happens to those at home who forgot about the mason jar banks of the elders the ones that survived the crash. Every year some crack head predicts the Crash like the plague and every year we forget 
The Glass-Steagall Act or the U.S. Banking Act of 1933 which by the way Mr. Clinton declared no longer valid and right after that the crash of the 2000`s,so maybe if we pay more attention to our history and become less greedy we could prevent the coming Doom.artydance:


----------



## Marcus

hiwall said:


> I would guess that was the plan from the beginning - to keep US dollars IN the US.


There's actually more physical $100 bills outside the US than in it. The drug trade is one reason, but so is the supposed stability of the dollar.

Most smart rich people diversify their assets and that includes having a chunk of money offshore out of the reach of a tyrannical government. If something should happen here, they can hop on their jet and fly to their money. Even Romney had about $100 million offshore for this reason. Part of that diversification is the use of other currencies and gold.

One of the ways the US differs from other countries is other countries only tax their citizens on the income they make in that country. The US taxes its' citizens on their income world-wide.

The S&P futures are down ~1.5% at the moment due to Greece. The equates to ~30 points on the S&P and just under 300 points on the Dow. It's liable to be an interesting day tomorrow in the markets.


----------



## musketjim

Just keep prepping as normal. There are constant threats out there and this is just another one. I don't jump thru hoops every time someone says the economic, martial law, Nibiru, apocalypse is coming. It's too exhausting. I have a life and I live itartydance:. I have a couple IRAs and a 401 in case nothing happens and I keep improving my BIL and BOL in case something does. Nothing more I can do.


----------



## bkt

musketjim said:


> Just keep prepping as normal. There are constant threats out there and this is just another one. I don't jump thru hoops every time someone says the economic, martial law, Nibiru, apocalypse is coming. It's too exhausting. I have a life and I live itartydance:. I have a couple IRAs and a 401 in case nothing happens and I keep improving my BIL and BOL in case something does. Nothing more I can do.


^^^ THIS ^^^

Well said - that's what prepping is all about.


----------



## CrackbottomLouis

The only real wealth left is land with reliable clean water, the ability to produce and preserve food off of it, the ability to secure it, energy, and good quality clothing and footwear. Everything else is an illusion subject to the whims of society at large and the perceived value someone may place on an item.

And I have to add a community of like minded individuals that functions well together as a form of wealth as well.


----------



## ClemKadiddlehopper

CrackbottomLouis said:


> The only real wealth left is land with reliable clean water, the ability to produce and preserve food off of it, the ability to secure it, energy, and good quality clothing and footwear. Everything else is an illusion subject to the whims of society at large and the perceived value someone may place on an item.
> 
> And I have to add a community of like minded individuals that functions well together as a form of wealth as well.


And that is why, we are in negotiations with the local tax man to pay our property taxes 10 years in advance. This way, we can be 'dirt' poor and survive if they do us all the great favor of bailing in the banks and managing our money for us.

In addition to the description above, any land one chooses should also have little potential for future emminent domain shenanigans to take place.


----------



## BillS

musketjim said:


> Just keep prepping as normal. There are constant threats out there and this is just another one. I don't jump thru hoops every time someone says the economic, martial law, Nibiru, apocalypse is coming. It's too exhausting. I have a life and I live itartydance:. I have a couple IRAs and a 401 in case nothing happens and I keep improving my BIL and BOL in case something does. Nothing more I can do.


It's not just one person saying something. It seems like it's everyone in forecasting or the alternative news media.

I wouldn't be putting money in a 401k. If I could I'd take it all out right now and pay the tax penalties. The stock market is going to crash. The federal government is going to seize all pension funds and 401k's eventually.


----------



## bkt

ClemKadiddlehopper said:


> And that is why, we are in negotiations with the local tax man to pay our property taxes 10 years in advance. This way, we can be 'dirt' poor and survive if they do us all the great favor of bailing in the banks and managing our money for us.
> 
> In addition to the description above, any land one chooses should also have little potential for future emminent domain shenanigans to take place.


Neat idea and please let us know how it works out for you. I'd rather negotiate an allodial title and be done with all property taxes forever but that's probably far less likely than what you're going after.



BillS said:


> It's not just one person saying something. It seems like it's everyone in forecasting or the alternative news media.
> 
> I wouldn't be putting money in a 401k. If I could I'd take it all out right now and pay the tax penalties. The stock market is going to crash. The federal government is going to seize all pension funds and 401k's eventually.


I hear you, but really if they do seize retirement funds and pensions you know savings and checking accounts won't be far behind. That will mean a complete collapse of the economy and the dollar won't be worth anything anyway. By that point, we're in a nightmare scenario. Granted, the nightmare will be the bulk of people clamoring for government to fix what it broke and take more freedom from the people in the process.


----------



## musketjim

BillS said:


> It's not just one person saying something. It seems like it's everyone in forecasting or the alternative news media.
> 
> I wouldn't be putting money in a 401k. If I could I'd take it all out right now and pay the tax penalties. The stock market is going to crash. The federal government is going to seize all pension funds and 401k's eventually.


If they seize pensions and 401's it still won't be enough, they are just going to seize everything, and we'll all be in a world of hurt.

"The good guys aren't coming"


----------



## Tweto

Watch what is happening in Greece right now. This could be our future. If Greece doesn't pay their obligations by the end of business today (US time) Greece will be in default status.

It's happening live on the news networks. Lines at the ATM's, banks closed for the week. It's recommended that tourists not go to Greece. The Fox news announcer said that they could not get any cash there and they were concerned about how to pay their bills and get food if charge cards are not allowed.

The head of the European bank said that if they default, Greece will not be able to trade for food, fuel, and other necessities. Even Greece's olive crops may not be traded for needed cash.


----------



## tsrwivey

BillS said:


> I wouldn't be putting money in a 401k. If I could I'd take it all out right now and pay the tax penalties. The stock market is going to crash. The federal government is going to seize all pension funds and 401k's eventually.


This is one of the main reasons we got out of the stock market just before the '08 crash & will never put money back into any type of retirement account. We are in our forties. The baby boomers are the dominant voting block. If the stock market tanks & takes their retirement accounts with it, they will vote for everyone's retirement accounts & other bank accounts to be seized.

We invest in local real estate because it's what we know, it's tangible, & we can control it to a large degree. I figure property will be among the last things seized. I'm under no delusions, my Social Security dollars are being spent the second they're stolen from me & I'll never see a dime of it. That fate was sealed long before I was even old enough to vote, so much for no taxation without representation. If we don't provide for our own retirement while supporting the boomer generation, we'll have to work until we die. If they start seizing actual property, I'll destroy anything of value on the property I can before they get it.


----------



## hiwall

musketjim said:


> If they seize pensions and 401's it still won't be enough, they are just going to seize everything, and we'll all be in a world of hurt.
> 
> "The good guys aren't coming"


You are so correct. The only reason they would likely grab pensions and 401's is if the stock market crashed and at that time those pensions and 401's would have little value left in them.


----------



## Tweto

I got out of the stock market in Dec and have been very happy with the decision. Every dollar is in cash, and a small percentage in PM's. I will be transferring money to more PM's before the end of the year.

Right now I'm speculating that PM's will be going down even more before there is a major increase in value.


----------



## squerly

musketjim said:


> If they seize pensions and 401's it still won't be enough, they are just going to seize everything, and we'll all be in a world of hurt.


I know very little about what makes stocks and bonds tick and for that reason, I don't have any money in either. Throughout this thread are references to the seizure of 401's, etc. But I don't understand why that would happen or even how it would happen. Can somebody explain this to me please?


----------



## RevWC

I think it has become painfully obvious our Government does whatever it wants to do. So if it wants your 401K it's theirs. The Majority of people did not want Obama care or the Trade bill that just passed.


----------



## TheLazyL

squerly said:


> I know very little about what makes stocks and bonds tick and for that reason, I don't have any money in either. Throughout this thread are references to the seizure of 401's, etc. But I don't understand why that would happen or even how it would happen. Can somebody explain this to me please?


I have a variable interest rate house mortgage. So far I've guessed right. Interest rate has went down and has never gone up. 2 more years it's paid off. 

I've been pouring 20% of my income in my 401K for the last 10 years. Made a few re-investments just as the Obama crash started, lost a bit. Gain it all back plus a bit more. 

So if the world can wait 5 more years before it ends, I'll be sitting a bit above alright. :woohoo:


----------



## LastOutlaw

TheLazyL said:


> I have a variable interest rate house mortgage. So far I've guessed right. Interest rate has went down and has never go up. 2 more years it's paid off.
> 
> I've been pouring 20% of my income in my 401K for the last 10 years. Made a few re-investments just as the Obama crash started, lost a bit. Gain it all back plus a bit more.
> 
> So if the world can wait 5 more years before it ends, I'll be sitting a bit above alright. :woohoo:


Sounds like a huge risk....kind of like all or nothing and the likelihood of all is very very low.

Good luck.


----------



## LastOutlaw

squerly said:


> I know very little about what makes stocks and bonds tick and for that reason, I don't have any money in either. Throughout this thread are references to the seizure of 401's, etc. But I don't understand why that would happen or even how it would happen. Can somebody explain this to me please?


Do you remember when the market crashed in 2008 and the government bailed out the banks that they said were too big to fail with taxpayer money via the US gov?
Well since they have not fixed "too big to fail" or the problems that caused the crash in the first place and arrested no-one and fired no-one it all can and probably will happen again.

So, what they have chosen to do is change the laws during the G20 to allow themselves to take depositors funds from their accounts, safe deposit boxes and 401ks rather than take from the government.

Today any money that you deposit is now considered an investment into that bank. Once you put it in there... it is no longer yours.


----------



## TheLazyL

LastOutlaw said:


> Sounds like a huge risk....kind of like all or nothing and the likelihood of all is very very low.
> 
> Good luck.


Risk? We will find out in a few more years. I really don't have much choice.

My first career died when gasoline hit $1 a gallon.

Second career had job security, low wages and almost no medical or retirement benefits.

I asked the wife what financial plans she was making for her retirement. Her reply, "I thought you was taking care of that" answered my question. I've got a lot of ground to make up quickly.

My third career (and final?) pays very well, excellent medical (no it isn't Obamacare) 401K AND a Employer funded pension.

401K is now in a lower risk fund, earning a lot more then bank interest. Finger's crossed.


----------



## tsrwivey

Don't count on the employer funded pension, many people who have ended up not getting it or getting much less than promised. That's what happened to my grandparents, grandpa was a union worker for 35 years. They promised the moon, what they failed to tell him was the amount would be renegotiated every year. Every year they got less & paid more for their insurance. When grandpa died, grandma didn't get another dime of that money. Had they not had other resources, she'd be living in poverty. A bird in the hand is worth two in the bush. I don't want any promises from anyone regarding my retirement. Pay me all my compensation for work now, I'll look after my own retirement. It would sure stink to rely on a promise from the government or an employer & then get left in poverty when your too old to work.


----------



## biobacon

Honestly Im freeking out right now. What if we have been right all along? Taking cue from the play book the globalist have used in the past we still have at least a year or two but its darn scary times.


----------



## squerly

LastOutlaw said:


> So, what they have chosen to do is change the laws during the G20 to allow themselves to take depositors funds from their accounts, safe deposit boxes and 401ks rather than take from the government.


How is it that you know this? Is there a link maybe that you can provide? Not saying it's not true, not by any means. But I'd like to read it myself if possible.



LastOutlaw said:


> Today any money that you deposit is now considered an investment into that bank. Once you put it in there... it is no longer yours.


I've heard this before too but I've not seen anything that actually says it.


----------



## hiwall

> I've heard this before too but I've not seen anything that actually says it.


It was in last years federal spending bill for sure and maybe other bills also (my old mind is getting fuzzy).


----------



## squerly

hiwall said:


> It was in last years federal spending bill for sure and maybe other bills also (my old mind is getting fuzzy).


I would think that only accounts with more than $250K would be affected, given that the FED guarantees everything up to that amount.


----------



## crabapple

TheLazyL said:


> I have a variable interest rate house mortgage. So far I've guessed right. Interest rate has went down and has never gone up. 2 more years it's paid off.
> 
> I've been pouring 20% of my income in my 401K for the last 10 years. Made a few re-investments just as the Obama crash started, lost a bit. Gain it all back plus a bit more.
> 
> So if the world can wait 5 more years before it ends, I'll be sitting a bit above alright. :woohoo:


I am with you on the 401K.
My stock will split & pay a 21% dividend in a month or so.
If the banks can hold on for another 6 years, I be able retire early.

squerly, the FED do not have the money to pay everyone the insured amount.
LAND is a better way to insure your saving.


----------



## squerly

crabapple said:


> squerly, the FED do not have the money to pay everyone the insured amount.


Good point.


----------



## hiwall

squerly said:


> I would think that only accounts with more than $250K would be affected, given that the FED guarantees everything up to that amount.


Also they guarantee it against loss but you would not really lose the money if they took it because they would give you IOU's in the form of bank bonds or bank stock or maybe even US bonds that could not be redeemed or sold for a specified time. See almost as good as cash


----------



## TheLazyL

hiwall said:


> Also they guarantee it against loss but you would not really lose the money if they took it because they would give you IOU's in the form of bank bonds or bank stock or maybe even US bonds that could not be redeemed or sold for a specified time. See almost as good as cash


Instead of IOU's perhaps they will reimburse us with Confederate issued money. It hasn't lost any value since 1865.


----------



## hiwall

TheLazyL said:


> Instead of IOU's perhaps they will reimburse us with Confederate issued money. It hasn't lost any value since 1865.


No because they would not ever use racist money!


----------



## LastOutlaw

hiwall said:


> Also they guarantee it against loss but you would not really lose the money if they took it because they would give you IOU's in the form of bank bonds or bank stock or maybe even US bonds that could not be redeemed or sold for a specified time. See almost as good as cash


Yes, you would not lose a penny. They would take away your savings and give you stock in a failing bank instead of your cash.
Good luck paying your bills with worthless stock.

I'll put my money elsewhere, thanks anyway.


----------



## LastOutlaw

squerly said:


> How is it that you know this? Is there a link maybe that you can provide? Not saying it's not true, not by any means. But I'd like to read it myself if possible.
> 
> I've heard this before too but I've not seen anything that actually says it.


How do I know? I try to pay close attention to what our elected officials are doing on our behalf.

Here are a few links that discuss the changes that they made to our laws.

(I'm kind of confused how they can just change our laws at a business summit out of the country without running them through congress for a vote during session. But I guess nothing matters any more, except them doing what they want regardless of what the people want.)

http://ellenbrown.com/2014/12/01/new-rules-cyprus-style-bail-ins-to-hit-deposits-and-pensions/

http://dollarwiseblog.dallasnews.com/2015/02/g20-bail-in.html/

http://www.globalresearch.ca/new-g2...scate-bank-deposits-and-pension-funds/5417351

http://www.nestmann.com/its-official-the-worldwide-bail-ins-are-coming#.VZQCKVKrGzk

Gotta love the Dallas Morning News spin... nothing to worry about ....business as usual.
What a worthless RAG.


----------



## ZoomZoom

squerly said:


> How is it that you know this? Is there a link maybe that you can provide? Not saying it's not true, not by any means. But I'd like to read it myself if possible.


Squerly

This is how I look at it.

The top 10 banks in the Country are sitting on about $7-trillion of deposits.
Retirement and other investment places (e.g. Fidelity) have about the same (IIRC).

That's $14 TRILLION dollars sitting out there.

How long do you believe the government will leave that pile of cash alone? They would love to get their dirty little hands on that and I'd bet they're trying to come up with some "reason" on why they need to have it. Cover the national debt maybe?


----------



## LastOutlaw

ZoomZoom said:


> Squerly
> 
> This is how I look at it.
> 
> The top 10 banks in the Country are sitting on about $7-trillion of deposits.
> Retirement and other investment places (e.g. Fidelity) have about the same (IIRC).
> 
> That's $14 TRILLION dollars sitting out there.
> 
> How long do you believe the government will leave that pile of cash alone? They would love to get their dirty little hands on that and I'd bet they're trying to come up with some "reason" on why they need to have it. Cover the national debt maybe?


Don't forget there is also over 12 trillion in IRAs. That might cover what they claim is our debt. (it is actually over 100 trillion if you count all of the social programs that are unfunded.)


----------



## BillS

squerly said:


> I know very little about what makes stocks and bonds tick and for that reason, I don't have any money in either. Throughout this thread are references to the seizure of 401's, etc. But I don't understand why that would happen or even how it would happen. Can somebody explain this to me please?


The federal government will be broke once foreign countries no longer accept dollars to pay for goods. The stock market will have crashed. The government will require pension funds and 401k's to have "safe" investments in government bonds. Even though the government will be stealing your money they won't call it that. Maybe it will be called something like the "Pension Fund Protection Act".


----------



## LastOutlaw

BillS said:


> The federal government will be broke once foreign countries no longer accept dollars to pay for goods. The stock market will have crashed. The government will require pension funds and 401k's to have "safe" investments in government bonds. Even though the government will be stealing your money they won't call it that. Maybe it will be called something like the "Pension Fund Protection Act".


They have already changed the law to allow the theft of citizens savings and have named it:

the Financial Stability Board's "Adequacy of Loss-Absorbing Capacity of Global Systemically Important Banks in Resolution,"


----------



## BillS

squerly said:


> How is it that you know this? Is there a link maybe that you can provide? Not saying it's not true, not by any means. But I'd like to read it myself if possible.
> 
> I've heard this before too but I've not seen anything that actually says it.


http://www.nestmann.com/its-official-the-worldwide-bail-ins-are-coming#.VZQtEhtViko

On November 16, leaders of the G20 Group of Nations - the 20 largest economies - made an important decision. The world's megabanks now have official permission to pledge depositor accounts as collateral to make leveraged derivative bets. And if they lose a bet, the counterparty to the contract has first dibs on your money.

The governments of these 20 countries are now supposed to put these arrangements into law. Most, including the US, have already done so.

http://sandiegofreepress.org/2015/0...ill-be-parted-during-the-next-banking-crisis/

To add insult to injury - since the banks pay you zero percent on your savings account in the first place - the banks have the right to confiscate your funds if they crash the economy again as they did in 2008. Remember the Great Recession? It's coming again to a bank near you.

How can they do this, you ask?

Simple. When you deposit money in a checking or savings account, that money no longer belongs to you. Technically and legally, it becomes the property of the bank, and the bank just issues you what amounts to an IOU. As far as the bank is concerned, it's an unsecured debt.

http://www.wnd.com/2013/09/americans-warned-bank-bail-ins-coming/

Previously the federal government has taken taxes from consumers, or borrowed the money, to hand out to troubled banks. This could be a little different, and could allow banks to reach directly into consumers' bank accounts for their cash.

Authority to allow bank "bail-ins" would be in lieu of approving any future taxpayer bailouts of banks that would be in dire need of recapitalization in order to survive.

Some financial experts contend that banks already have the legal authority to confiscate depositors' money without warning, and at their discretion.

Financial analyst Jim Sinclair warned that the U.S. banks most likely to be "bailed-in" by their depositors are those institutions that received government bail-out funds in 2008-2009.

Such a "bail-in" means all savings of individuals over the insured amount would be confiscated to offset such a failure.


----------



## db2469

Because of what is mentioned in the above post and other reasons, it's a good idea imo to keep a significant amount of cash in a safe and accessible place where only YOU know where it is!


----------



## musketjim

db2469 said:


> Because of what is mentioned in the above post and other reasons, it's a good idea imo to keep a significant amount of cash in a safe and accessible place where only YOU know where it is!


Good point, we always like to keep cash on hand, usually 10's and 20's. Immediate post collapse, cash will be king, for how long, who knows? If power is up you may be able to purchase food, fuel etc. Land can be a good investment as long as you can afford the property taxes, it's never really yours unless you live in an area without prop. taxes and then hope you don't get absorbed or incorporated into your local thieving government. Our BOL is paid off but taxes continue to rise to pay for services that aren't even in our area. We both work so cost isn't a issue right now but eventually we'll be on a fixed income. That's when it'll get interesting.


----------



## RevWC

If they want your property they will come and get that too.


----------



## Marcus

Think about this without any of the hysteria of this hot button issue.

Your accounts are insured to $250,000 by the FDIC. There are ways to extend the coverage by separating out money into individual accounts and joint accounts. For a man and his wife, 2 individual accounts and a joint account is $750,000. That's just at *one* bank. Truly how much money do y'all have that you can't spread it around a few banks to make sure it's completely insured?

*But the FDIC doesn't have that much money!!!* Perhaps, but a phone call to the Treasury and viola, more money.

In a bail-in scenario, large businesses (& the very rich) will be the ones hurt. Perhaps government agencies too.

[Bank to IRS] Hello IRS, we're taking all your money above $250,000. You're getting bailed-in.
[IRS to Bank] Are you now? What was your name again? Can you spell that?

[Bank to Defense Department] Hi, we're taking all your money for our bail-in. Sorry, but no one is getting paid.
Defense Department to Bank] That's all right. We're sending some people over to take all your cash. They'll be easily recognizable by the tanks they drive into your lobbies.


----------



## LastOutlaw

Marcus said:


> Think about this without any of the hysteria of this hot button issue.
> 
> Your accounts are insured to $250,000 by the FDIC. There are ways to extend the coverage by separating out money into individual accounts and joint accounts. For a man and his wife, 2 individual accounts and a joint account is $750,000. That's just at *one* bank. Truly how much money do y'all have that you can't spread it around a few banks to make sure it's completely insured?
> 
> *But the FDIC doesn't have that much money!!!* Perhaps, but a phone call to the Treasury and viola, more money.
> 
> In a bail-in scenario, large businesses (& the very rich) will be the ones hurt. Perhaps government agencies too.
> 
> [Bank to IRS] Hello IRS, we're taking all your money above $250,000. You're getting bailed-in.
> [IRS to Bank] Are you now? What was your name again? Can you spell that?
> 
> [Bank to Defense Department] Hi, we're taking all your money for our bail-in. Sorry, but no one is getting paid.
> Defense Department to Bank] That's all right. We're sending some people over to take all your cash. They'll be easily recognizable by the tanks they drive into your lobbies.


in 2009 there were so many banks going under that the fdic didn't have enough funds to insure accounts. They went broke. Considering that they have already changed the laws to allow themselves to take your money to keep banks afloat do you really think there is money there to insure your deposits. I doubt it.

If you think the Gov is going to pay you money on your losses you are quite the pipe-dreamer.

The only reason they have not closed the fdic is there would be instant runs on the banks.

Like our social security and probably fort knox, i doubt they have any money to insure anything.


----------



## Marcus

From the FDIC website:

The FDIC (Federal Deposit Insurance Corporation) is an independent agency of the United States government that protects you against the loss of your insured deposits if an FDIC-insured bank or savings association fails.* FDIC insurance is backed by the full faith and credit of the United States government.* (Bold is mine.)

Understand what that means. If the FDIC needs more money, they have the Treasury print it (actually create it digitally.) *They can't go broke.*

This has absolutely nothing to do with bail-ins. In a bail-in the *bank* takes your money (any balances over $250,000) and issues you bank stock or some sort of promissory note. The *bank* can't take money from accounts with balances below $250,000 since the FDIC insurance kicks in. That means the government would be bailing out the bank which is exactly the opposite purpose of having a bail-in.

Unlike Social Security, there is no trust fund that Congress can raid. Banks pay for this insurance through a small tax on their deposits.

In Cyprus, the banks only seized balances over 100,000 Euros. They left everyone else alone. That's what will happen here except the minimum balance will be $250,000. How hard is this to understand?

Now if you're opining that the government will fail to rescue the FDIC if it runs out of money, there's a large number of other financial instruments that have the full faith and credit of the US government. If Congress breaks faith with any one of these, there would be huge huge consequences across the entire economy.


----------



## LastOutlaw

Marcus said:


> From the FDIC website:
> 
> The FDIC (Federal Deposit Insurance Corporation) is an independent agency of the United States government that protects you against the loss of your insured deposits if an FDIC-insured bank or savings association fails.* FDIC insurance is backed by the full faith and credit of the United States government.* (Bold is mine.)
> 
> Understand what that means. If the FDIC needs more money, they have the Treasury print it (actually create it digitally.) *They can't go broke.*
> 
> This has absolutely nothing to do with bail-ins. In a bail-in the *bank* takes your money (any balances over $250,000) and issues you bank stock or some sort of promissory note. The *bank* can't take money from accounts with balances below $250,000 since the FDIC insurance kicks in. That means the government would be bailing out the bank which is exactly the opposite purpose of having a bail-in.
> 
> Unlike Social Security, there is no trust fund that Congress can raid. Banks pay for this insurance through a small tax on their deposits.
> 
> In Cyprus, the banks only seized balances over 100,000 Euros. They left everyone else alone. That's what will happen here except the minimum balance will be $250,000. How hard is this to understand?
> 
> Now if you're opining that the government will fail to rescue the FDIC if it runs out of money, there's a large number of other financial instruments that have the full faith and credit of the US government. If Congress breaks faith with any one of these, there would be huge huge consequences across the entire economy.


You have a lot more faith in the US Government than I do these days.


----------



## hiwall

> Understand what that means. If the FDIC needs more money, they have the Treasury print it (actually create it digitally.) They can't go broke.


No that is not true. The Treasury can not print Federal Reserve Notes as only the private Federal Reserve Bank can do that (whether paper or digital).


> In a bail-in the bank takes your money (any balances over $250,000) and issues you bank stock or some sort of promissory note.


In a bail-in the bank can take it ALL (in theory) your money. We are both only guessing here because it has never been done (yet) in the USA.
The last I heard the FDIC had around $6 billion available to them (I think that figure was from about a year ago so it would likely be higher now- or not).


----------



## Marcus

The government doesn't really have a choice except to backstop the FDIC.

If the government should fail to do so, all of the other US government-backed entities take huge hits.
The VA, FHA, FmHA, Fannie Mae, Ginnie Mae, Freddie Mac home loan programs cease immediately since the government backing is now questionable. So the Housing market literally gets wiped out as money to loan for mortgages stops.

The bond market adjusts and US debt of all types now carries significant risk premiums similar to third world country debt instruments. Debt issued by all US-based entities (roughly a third of the total bond market world-wide) including states and US-based companies will also carry this premium. I won't say the bond market will collapse, but what will occur will be close enough.

Since US banks hold US Treasuries as a Tier 1 asset, there will likely be a large number of bank failures as these Treasuries adjust in value. The banking system will likely collapse.

Since US-based companies will no longer be able to borrow to expand, there will be less economic activity by these companies. Similarly US states and other quasi-governmental agencies will be unable to borrow so infrastructure spending will cease.

If such a scenario as you opine ever occurs, GDP will probably drop 50% inside of a month. Unemployment will soar as companies and governments layoff employees. Prices for real goods and services will soar, and hyperinflation will result. It will be TEOTWAWKI.

That's why the FDIC will be given however much money they need to pay out on the insurance.


----------



## Marcus

hiwall said:


> No that is not true. The Treasury can not print Federal Reserve Notes as only the private Federal Reserve Bank can do that (whether paper or digital).


It's the same thing in this case. All it takes is a phone call.



> In a bail-in the bank can take it ALL (in theory) your money. We are both only guessing here because it has never been done (yet) in the USA.
> The last I heard the FDIC had around $6 billion available to them (I think that figure was from about a year ago so it would likely be higher now- or not).


Here is what Wikipedia says:

"The DIF's reserves are not the only cash resources available to the FDIC: in addition to the $18 billion in the DIF as of June, 2010; the FDIC has $19 billion of cash and U.S. Treasury securities held as of June, 2010 and has the ability to borrow up to $500 billion from the Treasury. The FDIC can also demand special assessments from banks as it did in the second quarter of 2009."

The assessment in 2009 was for $45 Billion. So all together, they have ~$600 Billion to pay off on accounts totaling $10.54 Trillion or 5.7% coverage *without* having to go to Congress.

Note that the total accounts number includes all deposits some of which exceed the $250,000 limit. So the coverage is probably significantly higher than 5.7%.

They are mandated by law to keep a balance equivalent to 1.15% of insured deposits.


----------



## musketjim

RevWC said:


> If they want your property they will come and get that too.


Absolutely right, well said.:congrat:


----------



## crabapple

Marcus said:


> From the FDIC website:
> 
> The FDIC (Federal Deposit Insurance Corporation) is an independent agency of the United States government that protects you against the loss of your insured deposits if an FDIC-insured bank or savings association fails.* FDIC insurance is backed by the full faith and credit of the United States government.* (Bold is mine.)
> 
> Understand what that means. If the FDIC needs more money, they have the Treasury print it (actually create it digitally.) *They can't go broke.*
> 
> This has absolutely nothing to do with bail-ins. In a bail-in the *bank* takes your money (any balances over $250,000) and issues you bank stock or some sort of promissory note. The *bank* can't take money from accounts with balances below $250,000 since the FDIC insurance kicks in. That means the government would be bailing out the bank which is exactly the opposite purpose of having a bail-in.
> 
> Unlike Social Security, there is no trust fund that Congress can raid. Banks pay for this insurance through a small tax on their deposits.
> 
> In Cyprus, the banks only seized balances over 100,000 Euros. They left everyone else alone. That's what will happen here except the minimum balance will be $250,000. How hard is this to understand?
> 
> Now if you're opining that the government will fail to rescue the FDIC if it runs out of money, there's a large number of other financial instruments that have the full faith and credit of the US government. If Congress breaks faith with any one of these, there would be huge huge consequences across the entire economy.


THANK You, I needed this post.


----------



## LastOutlaw

Marcus said:


> It's the same thing in this case. All it takes is a phone call.
> 
> Here is what Wikipedia says:
> 
> "The DIF's reserves are not the only cash resources available to the FDIC: in addition to the $18 billion in the DIF as of June, 2010; the FDIC has $19 billion of cash and U.S. Treasury securities held as of June, 2010 and has the ability to borrow up to $500 billion from the Treasury. The FDIC can also demand special assessments from banks as it did in the second quarter of 2009."
> 
> The assessment in 2009 was for $45 Billion. So all together, they have ~$600 Billion to pay off on accounts totaling $10.54 Trillion or 5.7% coverage *without* having to go to Congress.
> 
> Note that the total accounts number includes all deposits some of which exceed the $250,000 limit. So the coverage is probably significantly higher than 5.7%.
> 
> They are mandated by law to keep a balance equivalent to 1.15% of insured deposits.


It isn't a lack of understanding it is a matter of believing or not.

So they can cover 5.7% of the depositors funds...maybe higher...lets say 10% and that is probably being very generous.
That leaves 90% who would not be covered.

Also keep in mind when using wikipedia that the info there is changed by people who post info.
It isn't always accurate.

Also, if they have to pay off depositors losses something has already gone very wrong and "*there already is huge huge consequences across the entire economy."*
lots of other stuff would have to already gone wrong if fdic is having to pay off depositors.

Simply printing more money to pay off depositors losses probably wouldn't work if the economy has already gone to crap.


----------



## Marcus

LastOutlaw said:


> It isn't a lack of understanding it is a matter of believing or not.
> 
> So they can cover 5.7% of the depositors funds...maybe higher...lets say 10% and that is probably being very generous.
> That leaves 90% who would not be covered.
> 
> Also keep in mind when using wikipedia that the info there is changed by people who post info.
> It isn't always accurate.
> 
> Also, if they have to pay off depositors losses something has already gone very wrong and "*there already is huge huge consequences across the entire economy."*
> lots of other stuff would have to already gone wrong if fdic is having to pay off depositors.
> 
> Simply printing more money to pay off depositors losses probably wouldn't work if the economy has already gone to crap.


I don't know how familiar you are with bank failures. We saw a lot of S&L failures in Texas back in the 1980s. Even though I wasn't directly affected, I do know people who were. It is the same process whether it's a bank or a S&L.

It's a very orderly process. Once the regulators determine that a bank is insolvent or falls below the required minimum capitalization (what usually happens), the bank is closed. This usually happens on a Friday evening and probably has something to do with the weekly reconciliation of accounts.

The regulators immediately seek another financial institution to buy all the deposit accounts and all the real estate owned by the bank. Depending on whether an outside bank wishes to expand into the area the bank served, that sale may occur. If it does, new signs are put up and things continue as normal.

Failing that, the regulators will then sell just the deposit accounts to another bank. The going price is around $100. The new bank then services those accounts from that point forward from their existing locations.

In both cases, account owners have to get new checks and new debit cards. The following Monday morning the new bank opens in the old bank's location or the accounts are moved to the new bank at their existing locations.

On rare occasions, there is no interest in servicing the accounts. In that case, the Resolution Trust Corporation acts as a bank for a short time until those accounts can be transferred to another financial institution.

I am aware that Wikipedia may or may not have accurate numbers. But ballpark numbers are close enough in this instance.

What you are presuming to happen is just not likely. Well capitalized banks don't go out of business overnight with no warning. Stuffy old bankers don't take those kinds of risks. It's not prudent and bankers are required to be prudent due to their fiduciary responsibilities.

What happens is a bank starts sliding down the capitalization scale over a period of time, usually several years. At each step down, it receives more and more attention from regulators. If the problems are addressed adequately, the slide stops and it begins climbing back up the scale.

The other thing you're presuming is that *all of the banks in the country fail at exactly the same time* so the draw on the FDIC insurance is all at the same time. The only type of events that could do something like that are such that money is the least of your worries at that point.


----------



## LastOutlaw

Marcus said:


> I don't know how familiar you are with bank failures. We saw a lot of S&L failures in Texas back in the 1980s. Even though I wasn't directly affected, I do know people who were. It is the same process whether it's a bank or a S&L.
> 
> It's a very orderly process. Once the regulators determine that a bank is insolvent or falls below the required minimum capitalization (what usually happens), the bank is closed. This usually happens on a Friday evening and probably has something to do with the weekly reconciliation of accounts.
> 
> The regulators immediately seek another financial institution to buy all the deposit accounts and all the real estate owned by the bank. Depending on whether an outside bank wishes to expand into the area the bank served, that sale may occur. If it does, new signs are put up and things continue as normal.
> 
> Failing that, the regulators will then sell just the deposit accounts to another bank. The going price is around $100. The new bank then services those accounts from that point forward from their existing locations.
> 
> In both cases, account owners have to get new checks and new debit cards. The following Monday morning the new bank opens in the old bank's location or the accounts are moved to the new bank at their existing locations.
> 
> On rare occasions, there is no interest in servicing the accounts. In that case, the Resolution Trust Corporation acts as a bank for a short time until those accounts can be transferred to another financial institution.
> 
> I am aware that Wikipedia may or may not have accurate numbers. But ballpark numbers are close enough in this instance.
> 
> What you are presuming to happen is just not likely. Well capitalized banks don't go out of business overnight with no warning. Stuffy old bankers don't take those kinds of risks. It's not prudent and bankers are required to be prudent due to their fiduciary responsibilities.
> 
> What happens is a bank starts sliding down the capitalization scale over a period of time, usually several years. At each step down, it receives more and more attention from regulators. If the problems are addressed adequately, the slide stops and it begins climbing back up the scale.
> 
> The other thing you're presuming is that *all of the banks in the country fail at exactly the same time* so the draw on the FDIC insurance is all at the same time. The only type of events that could do something like that are such that money is the least of your worries at that point.


I'm pretty sure what is coming is going to be big if it happens. Considering that too big to fail is still here and nothing has been fixed, the next one will be very big and not take a number of years.


----------



## BillS

Marcus said:


> From the FDIC website:
> 
> The FDIC (Federal Deposit Insurance Corporation) is an independent agency of the United States government that protects you against the loss of your insured deposits if an FDIC-insured bank or savings association fails.* FDIC insurance is backed by the full faith and credit of the United States government.* (Bold is mine.)
> 
> Understand what that means. If the FDIC needs more money, they have the Treasury print it (actually create it digitally.) *They can't go broke.*
> 
> This has absolutely nothing to do with bail-ins. In a bail-in the *bank* takes your money (any balances over $250,000) and issues you bank stock or some sort of promissory note. The *bank* can't take money from accounts with balances below $250,000 since the FDIC insurance kicks in. That means the government would be bailing out the bank which is exactly the opposite purpose of having a bail-in.
> 
> Unlike Social Security, there is no trust fund that Congress can raid. Banks pay for this insurance through a small tax on their deposits.
> 
> In Cyprus, the banks only seized balances over 100,000 Euros. They left everyone else alone. That's what will happen here except the minimum balance will be $250,000. How hard is this to understand?
> 
> Now if you're opining that the government will fail to rescue the FDIC if it runs out of money, there's a large number of other financial instruments that have the full faith and credit of the US government. If Congress breaks faith with any one of these, there would be huge huge consequences across the entire economy.


The federal government will do whatever it wants. Laws don't matter.


----------

