I Don"t Know about You but......

We have CDIC, our deposit insurance here in Canada and if that happens in the States where the money is not insured anymore, it might happen here. I do not want to go back to the time when people were hiding money in mattresses. Then the people had servants, and they could leave their doors open, and so no one would come in and steal. But nowadsys, you have to get a ferocious dog (one that is always hungry) and armed guards to keep your money. And then there is that once it is in your mattress or your safe behind that painting or in your house or buried in various cans in your back yard, that money does not gain any interest. Yes I fear there will be a run on the banks.

I heard this last night and my first thought was that there was going to be a run on the banks. My second thought was to cash out some of our CDs and buy gold...and a wall safe. For now, we're doing nothing, but this is very disturbing.

IF they are like that and make a run on banks they surely will fail. Now I am wondering about mine too

Whiteheather: We came within days of FDIC failing back in the Fall. We only dodged the bullet thanks to Hank Paulson. I became seriously alarmed when I saw the FDIC jumping in and brokering deals to sell the huge banks like Wash Mutual and Wachovia that were teetering. (Remember that) I could see no reason for that other than that they did not have the funding to cover a collapse. I was really alarmed but I kept telling myself I was over reacting. Finally, I got into a conversation with a neighbor who is a professor at the Wharton School of Business at the University of Pennsylvania. I figured if anybody knew what was happening, he would. The man confirmed all of my worst suspicions. When I blurted out "My God, it's really as bad as Paulson says". He just looked at me and said something to the effect of "Henry Paulson is way too smart to let on how bad this really is". He told me that the bank bailout had no quarantee whatsoever of working but it was the only thing that could be done and it had to be tried. Since then I've tried to learn what I could about our financial predicament. It seems that the Federal Deposit Insurance Company was set up under the Glass Staegall Act which was a part of the Federal Banking Act of 1935. Roosevelt and his people wanted to reassure Americans that they could protect their nest eggs with government insurance. They were wise enough to realize that that insurance could not be put on any risky ventures. So they separated banking into Commercial, Investment and Retail Banking. The FDIC ONLY insured money in Retail Banks. They did not insure money in risky Investment Bank ventures (eg. Sub prime Real Estate bundles.) For over 50 years Glass Staegel functioned well as a safety valve within our system. On the rare occassions that a bank did collapse, they were able to step in over night, make the accounts good and take over the bank until it was stable. The banks usually didn't even close and Americans didn't necessarily even know the bank had collapsed. It was a rare happening and there was always money enough to cover the accounts. Unfortunately, the FDIC reserves were predicated on conservative Retail Banking stats. Under Ronald Reagan and later under Bill Clinton, Glass Staegall was gutted and then completely repealed. First came the S&L collapse in the late 1980's and now comes the rest. The Investment Banking Industry really wanted that little FDIC sticker and they lobbied for 20 years and spent over $300 million dollars to get it. While I don't necessarily think the politicians who helped Investment Bankers achieve their goal were fully aware of what they were doing, it was a huge mistake. The lone voice that spoke up against repealing Glass Staegall was Paul Volker who came out of retirement to help the Obama Administration deal with the crises. In fact, Volker went on record as being opposed to the repeal while all others applauded it. I was hoping that our politicians would have enough sense to listen to him this time but apparently some of them still do not. Sorry,for getting so carried away. I had to get this out.

I can understand how you feel whiteheather sweety. Here in the UK the bank has invested billions in banks that would otherwise have gone under - and is likely to invest billions more before this recession is over. The Bank of England has also reduced inflation and printed millions more in Sterling for the first time in history to try to ease the financial pressure over here. I would worry that if everyone withdrew their savings from the back it would make the situation even worse and the banks would collapse- money becoming worthless too! It is a horrible situation but I hope and pray that our leaders will have the wisdom and ability to start turning the situation around before it gets too much worse! xxx

I would say that right now, I wouldn't go hauling all of your money out of the banks yet, for two reasons. First, you'd only be feeding the fire and second, I don't think it's quite time to panic yet. What you might want to consider however is maybe utilizing a local bank as aposed to a larger national bank, they may be a bit safer. the thing we do have to be on the look out for though, is what has been called a "bank holliday". Basicly a period of time where the federal government closes banks for a period of time to prevent runs. I would get a lot of money out and keep a good stash of tanglible matress cash, but still keep a little in the banks, as I said above, preferably a local bank.

It really is scary. I would say that if everyone does that the banks will definitely fall. I don't have any to worry about, but I would be afraid to have it there. I don't think that having it in the house is a very good idea, we will have people robbing people and destroying property trying to find it.

It is a tough decision to make. It is tough to feel safe leaving it in the bank but also tough to feel safe keeping it at home. I think we should watch things closely, be prepared for the worst and be happy if it is anything better.

The issues with the bank concern me. I have to put away a certain amount every month for a program my daughter is on with social security and it had grown significantly. It worries me that this money may not be safe. So far the bank is doing well even though interest rates have dwindled since I first opened the account.

This is really a scary news. If it's going to happen, then it's no longer safe to deposit our money into the banks. Might as well withdraw it and hide it somewhere.

That is so scary! I don't even know what to do. My instincts tell me not to take all my money out of the bank, but I don't even know what to do anymore. I can't believe this economy - it's so depressing!!! At this point, I'm going to leave my money in the bank, but I'm getting very nervous even about doing that.

I do not put money in the bank. I spend it as soon as I get it. Haha. Actually, I have a very sane budget plan for someone who lives on as little a month as I do. I don't trust banks as they have messed with my funds one too many times. I'm currently trying to use an account now card to set up with my paypal account. But, yes, storing a lot of money in a bank has never ended up good for me.