Thoughts On Finance

FDIC insurance is what our banks supposedly have to cover our money in case the bank that you have your money in goes under.  This insurance used to cover up to $100,000 per account and has recently been extended to cover up to $250,000 per account and if your money is in a non-interest bearing account, all the money that you have in an account is supposedly covered according to the new FDIC rules effective until December 2009.  Investment and finance expert Suze Orman has been on TV of late for commercials regarding the new FDIC online evaluator, that allows you to check and make sure that your money is insured.  My real question to all is, if this system were to crash, would our government really be able to cover all of the money that every single person in the US has in the bank? And the answer in my opinion is NO WAY! Take a moment and think about the movie “It’s a Wonderful Life”.  In that movie, when people got wind of the bank’s problems they all ran to the bank to withdraw all their money at once and very quickly they knew they were in trouble.  How do you think that our government would handle such a crisis? Do you think that they could just explain to people that their money was invested in their neighbor’s homes and farms? I think not.  So is it a good idea to keep all your money in the banking system? I suggest not.  I am not saying to withdraw every penny, however, it may be a more advisable to begin to save some cash on hand, just in case.  I mean with the stock market so iffy, and the potential that banks and real estate could crash and no credit available, isn’t it possible that you could be left without a dime.  I think it is not only possible, but perhaps likely.  In any case, it is not meant to scare people, but to take note of where your money is and who has the control over it.  It is actually ironic that we are allowing the Federal Government full control over our personal finances, especially since they seem to be such prudent financial wizards, don’t you think?