Blue Mass Group

Reality-based commentary on politics.

New FDIC Coverage – is it real?

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As I understand it, the bailout bill passed today increases FDIC insurance of cash bank deposits from $100,000 to $250,000.

My question: is this effectively a scam?  I mean, where is the money coming from to cover this insurance increase?  If there was a major bank failure tomorrow, would anyone really get their cash back, and in a timely manner?

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Comments

  1. FDIC does work. I had a cd with Indymac when it went down and I never so much as missed a statement.
    The trick is that money only exists as binary digits in a transmission stream. It is all electronic and all based purely on trust. Think of it as a wish sandwich. It may be entirely worthless to you when you go to get it, but be there it will!

      • At the time it was the biggest bank failure ever. Of course WAMU since, was much bigger.
        I think what you are getting at is will FDIC run out of money.
        I actualy did worry about that until about two weeks ago when Paulson extended the same coverage to previously uninsured money markets. He retroactivly gave them the same coverage we have paid for all along, and he did it for free.
        That tells me that FDIC will never be allowed to run out of money. Paulson will guarentee solvency to the point of complete currency devaluation. that may even be ther true intent. If I was say 10 trillion in debt it would break my heart to decalre the dollar as worth a penny. One heck of a plan …
        They will just make more money, like doritos.
        Ah well, Its not like you have anywhere else to go. Every other currency is infected with the same greedy bankmeisters and I am reading that precious metal ownership may become outright banned AGAIN!
        So all in all, FDIC is as safe as it gets.
        And if the ship goes down will we realy care?

        • When the FDIC took over on July 11th it froze the assets at that point.  They paid off the CD on July 31st, so the only thing lost was 20 days of interest on the CD.  However, the continued “printing of money” to cover these debts end up depreciating the value of the dollar, so we all lose a little bit.

          • Was yours a IRA? Mine did nothing at all, they even payed the monthly interest the same as always.

            • But a Vanguard brokerage account.

              <

              p>An informational summary of Indymac bank CD payouts include:

              Will I continue to earn interest at the same rate?
              Yes, interest will continue to accrue at the contract rate on all non-broker deposits.  If you deposited funds through a broker, the interest will accrue and be paid through Friday, July 11, 2008.

              <

              p>My account was credited with the CD valued at July 11th on the 31st of July.

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