# FDIC Girds for Bank Failures



## JGex (Dec 27, 2005)

http://www.thestreet.com/s/fdic-gir...wsanalysis/banking/10405078.html?puc=googlefi



> Shaky loan portfolios continue to darken the landscape for the nation's banks, as federal regulators prepare for the possibility of an uptick in failures of financial institutions, according to recent government reports.
> 
> A record-high $31.3 billion set aside by banks for loan losses, record trading losses and goodwill expenses dragged down fourth-quarter net incomes of insured banks to a 16-year low, according to the Federal Deposit Insurance Corp.'s quarterly banking profile released Tuesday. The cumulative increase to loan-loss provisions was the largest increase in 20 years.


This is going to be an interesting year.


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## Aintlifegrand (Jun 3, 2005)

JGex said:


> http://www.thestreet.com/s/fdic-gir...wsanalysis/banking/10405078.html?puc=googlefi
> 
> 
> 
> This is going to be an interesting year.




No doubt...


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## hfwarner3 (Feb 19, 2008)

As an emplyee of a bank, I can also tell you that the Federal Reserve is tightening the technology requirements to make sure the banks better survive a disaster. We have applications that run in our primary datacenter now and have to be manually brought up in the backup facility. We are working now to re-engineer them so they run full-time in both locations with no downtime in case of an "event". 

I, for one, am glad that both the Fed and the bank are taking this serious. I don't just work here, my checking, savings, pension, and 401k are here too!


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## JGex (Dec 27, 2005)

Hey hfwarner3,

Just curious.... the part where you said "make sure the banks better survive a disaster" interests me as to just what constitutes a "disaster?"


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## Janis Sauncy (Apr 11, 2006)

And when should we start pulling our money out? (I'm serious!)

Janis


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## Ernie (Jul 22, 2007)

Read this for more info:

http://www.bankersonline.com/articles/sfpv04n11/sfpv04n11a16.html

Banking regulations require a lot disaster recovery planning. Things called "Service Level Agreements" require systems to be online in X amount of time after a disaster, regardless of the scale. Banks in New York typically have alternate data centers on the West Coast or (most popular now) Phoenix. 

So regulations are there, but compliance with those regulations is somewhat shaky.


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## JGex (Dec 27, 2005)

Regulations might be there, but I'd like to see how fast the banks try to lock their doors when people come asking for their savings in cash. There is not enough cash to back up the numbers, nor can the FDIC really back it up if there is a run on the banks.

If my bank folds, I wonder if I can tell them to apply my balance that I won't be able to get out of them to the remainder of our loan if we still owe anything on it?

:stars:


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## Ernie (Jul 22, 2007)

Are we talking about disasters making banks unavailable to customers, or are we talking about a run on the bank?


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## JGex (Dec 27, 2005)

Ernie said:


> Are we talking about disasters making banks unavailable to customers, or are we talking about a run on the bank?


Well, the initial article I posted was about bank failures due to loan losses and such, so I am talking about a run on the banks if the general populace gets squirrelly and wants their money so they can stuff it in their mattresses.

I'm just not sure if the banks are considering that falling under their "disaster plan" umbrella or not.


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## hfwarner3 (Feb 19, 2008)

JGex said:


> Hey hfwarner3,
> 
> Just curious.... the part where you said "make sure the banks better survive a disaster" interests me as to just what constitutes a "disaster?"


My favorite example to use with management:

"You do another round of lay-offs in the IT department and one or more of your former employees puts their brains to use, packs a pickup truck full of 55 gallon drums, some containing thermite they made in their basement, some containing flammable liquid. They park this truck next to the datacenter and ignite it. While the building proceeds to burn to the ground, they go into the plaza building and use their backpack thermite device to start a fire there as well, thus burning up all your offices. Now let's talk about how we recover..."

I love that one ... they hate it.

We really do talk about almost every possible scenario you can think of - weather shutting down the city, terrorism, fire, civil unrest, superbowl rioting, war, you name it.


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## hfwarner3 (Feb 19, 2008)

JGex said:


> Well, the initial article I posted was about bank failures due to loan losses and such, so I am talking about a run on the banks if the general populace gets squirrelly and wants their money so they can stuff it in their mattresses.
> 
> I'm just not sure if the banks are considering that falling under their "disaster plan" umbrella or not.


Well, you have to understand that the term "Business Continuity" means one thing to a bank and "Disaster Recovery" is a related, but different, process.

Let's say some bank, we will call them MaWu, goes under due to bad mortgages and people freak because they are afraid they won't get their money (which you WILL get, by the way). People show up at their MaWu branch and demand their money in cash. MaWu will start by limiting cash withdrawals. If they run out of cash, they will shut that branch down until the Fed Reserve armored truck shows up with another pallet of $100s and $20s. The Fed has these pre-staged around the country JIC.

Now let's suppose it makes the news and people say, "I don't bank at MaWu, but I think I'll pull a paycheck's worth of money out of Spank of Spamerica JIC." So now we start seeing a run on ALL the banks. The Fed will step in and declare an emergency bank holiday. The branches will close. The President will go on the TV that evening and give a speech to tell people that their money isn't going anywhere. Meanwhile, you can use your debit card to go online and buy all the gold and silver coins you can afford. 

Seriously, with the FDIC, you are insured up to $100,000. In an absolute worst case scenario, the Fed would just print off the money it needs to pay everyone cash and inflation be darned. Still, you are going to get your money. You might have to wait a couple weeks, but you WILL get it.

Funny thing about politicians - almost all of them are just there to get re-elected. Well, if the banking system fails, they don't have any more campaign contributions, so they tend to take that banking thing seriously. :cowboy:


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## JGex (Dec 27, 2005)

Well, I'll say this..... you sure do have a lot more faith in your employer and the "system" than I do.

I'll say it... just like the Great Depression, "our" money has been loaned out and invested and when those investments come tumbling down I do not expect the govt to have enough physical $$ to get everyone their cash. It's all a ponzi scheme. 

Of course, I'm an artist, so what do I know?

:sing:


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## texican (Oct 4, 2003)

If a bank failure cascade begins, I plan on putting a call option on my dollar savings... by maxing out several 10K credit cards, on hard goods... to TSC, ACE hardware, local gunshops, and probably a lumber store or two...

Of course, there could be a hold on all credit purchases... what do you do then? Pay with cash? Silver coin.

I think the key is hitting the sweet spot, where the financial system is on 'holiday', but before the realization hits that our currency is suddenly worthless... Purchase everything you might ever need, before the purchasing power of savings evaporates.


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## edcopp (Oct 9, 2004)

I feel a lot more secure now.


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## Aintlifegrand (Jun 3, 2005)

There goes another nights sleep!


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## smalltime (Jan 26, 2007)

Has anyone ever watched this?... whats your take on it?

http://video.google.com/videoplay?d...=89&start=0&num=10&so=0&type=search&plindex=0

smalltime


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## JGex (Dec 27, 2005)

smalltime said:


> Has anyone ever watched this?... whats your take on it?
> 
> http://video.google.com/videoplay?d...=89&start=0&num=10&so=0&type=search&plindex=0
> 
> smalltime


I've watched it and talked to a lot of people smarter than myself and it's been general consensus that it's pretty dead on. 

If you want to read more about where our money is going currently, pick up a Greg Palast book. I'd recommend _Armed Madhouse_. When people finally come to understand that we've been sold down the river by the Fed and our govt, there's gonna be a lot of po'd people in this country.

People got all worked up when Dubai was about to buy our ports. Well, the Saudis and Chinese and Japanese and goodness knows who else just bailed some of our banks out.... CitiBank being one of them.

We're in deep financial doodoo. 

http://www.gregpalast.com/


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## JGex (Dec 27, 2005)

http://www.gregpalast.com/george-of-arabia-better-kiss-your-abe-goodbye/


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## JGex (Dec 27, 2005)

texican said:


> If a bank failure cascade begins, I plan on putting a call option on my dollar savings... by maxing out several 10K credit cards, on hard goods... to TSC, ACE hardware, local gunshops, and probably a lumber store or two...
> 
> Of course, there could be a hold on all credit purchases... what do you do then? Pay with cash? Silver coin.
> 
> I think the key is hitting the sweet spot, where the financial system is on 'holiday', but before the realization hits that our currency is suddenly worthless... *Purchase everything you might ever need, before the purchasing power of savings evaporates.*


Man, I tell you what... it has never been easier for me to convince DH I need a new kitchen gadget.


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## JGex (Dec 27, 2005)

http://www.cnn.com/2008/LIVING/personal/02/27/bank.safety/index.html



> "Regulators are bracing for 100-200 bank failures over the next 12-24 months," says Jaret Seiberg, an analyst with the financial services firm, the Stanford Group.
> 
> Expected loan losses, the deteriorating housing market and the credit squeeze are blamed for the drop in bank profits.
> 
> The problem areas will be concentrated in the Rust Belt, in places like Ohio and Michigan and other states like California, Florida and Georgia.


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## Aintlifegrand (Jun 3, 2005)

JGex said:


> http://www.cnn.com/2008/LIVING/personal/02/27/bank.safety/index.html




Yeah I just saw that..anyone know more on this than what's in the CNN report?


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## hfwarner3 (Feb 19, 2008)

JGex said:


> Well, I'll say this..... you sure do have a lot more faith in your employer and the "system" than I do.
> 
> I'll say it... just like the Great Depression, "our" money has been loaned out and invested and when those investments come tumbling down I do not expect the govt to have enough physical $$ to get everyone their cash. It's all a ponzi scheme.
> 
> ...


Hey, don't get me wrong. The U.S. Dollar is a fiat currency based on debt instruments created by the Federal Reserve. The only reason it is anything more than a piece of paper is because people BELIEVE it is worth more than a piece of paper. 

So yes, I work in the Banking industry and see that there are safeguards in place, but I am still into homesteading, own gold and silver coins, seek to be self-sufficient for food, etc. Sooner or later, the U.S. economy WILL collapse (my personal belief, not the opinion of my employer) because it is based on a debt-based economy that is controlled by a goverment that can not control its spending. Just because you build a dam doesn't mean that it is going to stop the tsunami.


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## hfwarner3 (Feb 19, 2008)

Yes, 100 - 200 smaller banks are going to go under if things don't change. While I feel bad for those banks and the people they employee, it is the top 20 U.S. banks that matter. If any of these 20 go, get worried.

Institution Name - State Headquartered - No. of Offices - Total Deposits June 30, 2007 
Bank of America - North Carolina - 5,728 - 596,584,899 
JPMorgan Chase Bank - Ohio - 3,108 - 439,996,000 
Wachovia Bank - North Carolina - 3,103 - 314,850,000 
Wells Fargo Bank - South Dakota - 3,255 - 263,664,999 
Citibank - Nevada - 1,036 - 210,289,000 
Washington Mutual Bank - Washington - 2,180 - 202,706,306 
SunTrust Bank - Georgia - 1,747 - 114,579,848 
U.S. Bank - Ohio - 2,590 - 113,097,080 
Regions Bank - Alabama - 2,087 - 88,388,815 
Branch Banking and Trust Company - North Carolina - 1,484 - 83,720,251 
National City Bank - Ohio - 1,451 - 82,374,824 
HSBC Bank USA - Delaware - 455 - 75,342,071 
World Savings Bank, FSB - California - 287 - 73,247,967 
Countrywide Bank - Virginia - 2 - 60,616,621 
PNC Bank - Pennsylvania - 836 - 59,188,198 
Keybank - Ohio - 965 - 57,286,597 
ING Bank, fsb - Delaware - 1 - 54,161,553 
Merrill Lynch Bank USA - Utah - 3 - 51,601,084 
Sovereign Bank - Pennsylvania - 745 - 49,134,698 
Comerica Bank - Michigan - 395 - 41,797,801 

The bank I am keeping my eye on right now in Washington Mutual. They are in trouble, but I think the Fed would cut a behind-the-scenes deal for them to be bought out before they would be allowed to go under. 

(Hey, didn't he say he works for a top 10 bank and works at corporate headquarters in Atlanta? I wonder which bank he works for?) :cowboy:


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## Aintlifegrand (Jun 3, 2005)

hfwarner3 said:


> Yes, 100 - 200 smaller banks are going to go under if things don't change. While I feel bad for those banks and the people they employee, it is the top 20 U.S. banks that matter. If any of these 20 go, get worried.
> 
> Institution Name - State Headquartered - No. of Offices - Total Deposits June 30, 2007
> Bank of America - North Carolina - 5,728 - 596,584,899
> ...



Do you follow the Fed's slosh fund? The amount that the fed has loaned to the banks ( these main banks...although I am thinking it was only 12).. it is extremely high today...It gets higher and higher...and my concern is how long can the Fed keep loaning to the banks to cover their reserve requirements/ and illiquidity problems and still cover the US debt...they can't print endless amounts of dollars.. that's all controlled by the treasury...at what point does the Fed dump the banks in order to service the US debt?


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## hfwarner3 (Feb 19, 2008)

Aintlifegrand said:


> Do you follow the Fed's slosh fund? The amount that the fed has loaned to the banks ( these main banks...although I am thinking it was only 12).. it is extremely high today...It gets higher and higher...and my concern is how long can the Fed keep loaning to the banks to cover their reserve requirements/ and illiquidity problems and still cover the US debt...they can't print endless amounts of dollars.. that's all controlled by the treasury...at what point does the Fed dump the banks in order to service the US debt?


Well, maybe they can't PRINT endless dollars ... don't forget the debt instruments. They can just keep incurring debt until political pressure forces the Treasury to get on board. 

And the Fed CAN'T dump the U.S. banks. Period. People trust they the ones and zeroes behind their ATM screen, internet banking, and debit card will all work - that is what lets the Fed do what they are doing now. The day that the modern consumer stops trusting the bank or even their debit cards is the day the house of cards starts to come down. 10 years ago banks made a MAJOR push for debit cards because it is less expensive per transaction than processing checks. If people were to stop using debt cards and instead go back to checks and cash then the banks would have a hard time clearing the checks at the lockboxes and keeping enough cash at the branches and in the ATMs. ACH and cash at the branches is Fed territory, so writing off one bank makes 10 times more work for the Fed from the other banks in that area.

It really comes down to who is running the show and how they prioritize things. Is foreign held debt the biggest issue? Mortgage crisis? Tax revenue? Inflation? Take your pick. 

It is going to be ugly for at least a minority of people ... the only question is who.


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## RockyGlen (Jan 19, 2007)

Our bank has the highest rating, but we still only leave enough in to cover the bills. Have been doing that for 3 or 4 months now, I guess.

I can't say I am eager for a total collapse, but I do think that in the long run it might benefit the country if it got us back on a gold standard, living within our means, and caring about what's important rather than ourselves.


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## Aintlifegrand (Jun 3, 2005)

hfwarner3 said:


> Well, maybe they can't PRINT endless dollars ... don't forget the debt instruments. They can just keep incurring debt until political pressure forces the Treasury to get on board.
> 
> It really comes down to who is running the show and how they prioritize things. Is foreign held debt the biggest issue? Mortgage crisis? Tax revenue? Inflation? Take your pick.
> 
> It is going to be ugly for at least a minority of people ... the only question is who.


Yes..but increasing the debt only compounds the problems for the Fed as they struggle to service the growing national debt...If the debt becomes so big that they cannot finance it.. then it is game over..is it not? The illiquidity issue in the big banks has to be addressed..I do not like that huge amounts are being borrowed from the Fed by the big 12 banks and I fear it will continue to get worse as more of the crisis hits the bank's bottom lines. I am reading that reserve requirements are being lifted, changed or manipulated... any truth to that from your perspective?


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## Freeholder (Jun 19, 2004)

RockyGlen said:


> Our bank has the highest rating, but we still only leave enough in to cover the bills. Have been doing that for 3 or 4 months now, I guess.
> 
> I can't say I am eager for a total collapse, but I do think that in the long run it might benefit the country if it got us back on a gold standard, living within our means, and caring about what's important rather than ourselves.


The problem is that if there is a total collapse, there are going to be so many 'cascading' effects that chances are very slim that we would be able to pick up and start over. Let's say the economy does collapse (and it's probably going to, although TPTB MIGHT be able to pull a rabbit out of a hat and rescue things one more time -- I'm not counting on it). What's going to happen to all the businesses in this country if they no longer have access to cash or credit in order to operate? What about transportation? What about state and local government, and the water and sewer service they provide, and garbage pick-up? What about the utilities? Would the farmers even be able to get a crop in the ground, with no transportation to bring fuel and fertilizer to them? 

Can you see where I'm going with this? Think, nearly everyone out of work; nearly everything shut down; and slim chance of most of it starting up again. The problem is that once things shut down, parts and materials will begin to be scavenged and sold or bartered, just like the empty houses are being stripped of everything saleable (and then homeless people or druggies move in and live in the gutted shell). There won't be any money to fix the damage, so things will just fall apart, including the roads. 

The medical system will also fall apart, so any illness going around is likely to kill a lot more people than it normally would. 

Like I said, I don't know if we are actually going to see a collapse -- the government and the banksters MIGHT be able to pull off another rescue of the system (in which case, when we do inevitably crash, it will be even harder, if that's possible -- but it might give a few intelligent people more time to get ready). But if and when we DO crash, it's going to be a lot more than the mere inconvenience of not being able to get your money out of the banks for a few weeks.

Kathleen


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## JGex (Dec 27, 2005)

......


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## JGex (Dec 27, 2005)

BlueJuniperFarm said:


> Like I said, I don't know if we are actually going to see a collapse -- the government and the banksters MIGHT be able to pull off another rescue of the system (in which case, when we do inevitably crash, it will be even harder, if that's possible -- but it might give a few intelligent people more time to get ready). But if and when we DO crash, it's going to be a lot more than the mere inconvenience of not being able to get your money out of the banks for a few weeks.
> 
> Kathleen


The Fed and members of our govt are profiteering off of current situations. Please take some time to read some of Greg Palast's writings.... and do some background study of how the Great Depression happened. Those whom we are looking to to rescue the system may just be the ones destroying it.


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## Freeholder (Jun 19, 2004)

RockyGlen said:


> Our bank has the highest rating, but we still only leave enough in to cover the bills. Have been doing that for 3 or 4 months now, I guess.
> 
> I can't say I am eager for a total collapse, but I do think that in the long run it might benefit the country if it got us back on a gold standard, living within our means, and caring about what's important rather than ourselves.





JGex said:


> The Fed and members of our govt are profiteering off of current situations. Please take some time to read some of Greg Palast's writings.... and do some background study of how the Great Depression happened. Those whom we are looking to to rescue the system may just be the ones destroying it.


Yes, I know that they are manipulating our economy on purpose, to the extent that they are able to control what's going on (which is more than most people give them credit for). But we don't know what's going through their minds, and so don't know if they are going to allow the crash to happen now, or if they want to squeeze some more juice out of us before it happens. My main point was the severity of what is going to happen to us when the collapse does come.

Kathleen


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## hfwarner3 (Feb 19, 2008)

Aintlifegrand said:


> Yes..but increasing the debt only compounds the problems for the Fed as they struggle to service the growing national debt...If the debt becomes so big that they cannot finance it.. then it is game over..is it not? The illiquidity issue in the big banks has to be addressed..I do not like that huge amounts are being borrowed from the Fed by the big 12 banks and I fear it will continue to get worse as more of the crisis hits the bank's bottom lines. I am reading that reserve requirements are being lifted, changed or manipulated... any truth to that from your perspective?


Officially, I can not speak on this. It is not like a memo that is distributed to everyone and people can spend years arguing the accounting one way or another. I am not an expert when it comes to the financial side.

I agree with what you are saying - it would make it worse, but the Fed has "leverage" over Treasury and the end result is that they have to work together, so Treasury would have to step up and play ball at some point. We are back to my earlier statement, however - a dam can not stop the tsunami. Even if they do start playing ball, is it too little too late?

My PERSONAL experience on the IT side of things is that the Fed is making the requirements TOUGHER, more robust, and more "survivable" should a "disaster" (natural or man made) hit.


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## hfwarner3 (Feb 19, 2008)

BlueJuniperFarm said:


> What's going to happen to all the businesses in this country if they no longer have access to cash or credit in order to operate? What about transportation? What about state and local government, and the water and sewer service they provide, and garbage pick-up? What about the utilities? Would the farmers even be able to get a crop in the ground, with no transportation to bring fuel and fertilizer to them?
> 
> Can you see where I'm going with this?


OK, let's look first at history. Even as far back as ancient Egypt, we are able to see a trend where business and technology leap forward - people move to the urban area seeking work - over-taxation, uncontrolled government spending, and/or war cause a collapse - local government tries to trudge on - a significant portion of the population moves back to the rural areas. You can see this in Greece, Rome, etc. right on up to modern Yugoslavia in the 1990s.

Historically, people will continue to do business if they can and will barter for payment if they have to. A new government will step in. There will be short-term chaos and there are usually false-starts where the "new try" doesn't get it right either, so they start over again. In the long run, where their was one territory under one government there is now many terrirories with smaller governments. Historically, some of them will fight over resources and/or absorb each other.

The show Jericho is not that far off from one possible way for it to go down where it starts as 7 new "Americas" and they start cutting deals and merging until there are two Americas and Texas.


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## hfwarner3 (Feb 19, 2008)

I was going to ask everyone what chance they thought there was of the economy failing this year, but I thought I would start that as its own thread instead of hijacking this one. Link


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## Aintlifegrand (Jun 3, 2005)

hfwarner3 said:


> Officially, I can not speak on this. It is not like a memo that is distributed to everyone and people can spend years arguing the accounting one way or another. I am not an expert when it comes to the financial side.
> 
> I agree with what you are saying - it would make it worse, but the Fed has "leverage" over Treasury and the end result is that they have to work together, so Treasury would have to step up and play ball at some point. We are back to my earlier statement, however - a dam can not stop the tsunami. Even if they do start playing ball, is it too little too late?
> 
> My PERSONAL experience on the IT side of things is that the Fed is making the requirements TOUGHER, more robust, and more "survivable" should a "disaster" (natural or man made) hit.



Thanks.


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## Aintlifegrand (Jun 3, 2005)

hfwarner3 said:


> OK, let's look first at history. Even as far back as ancient Egypt, we are able to see a trend where business and technology leap forward - people move to the urban area seeking work - over-taxation, uncontrolled government spending, and/or war cause a collapse - local government tries to trudge on - a significant portion of the population moves back to the rural areas. You can see this in Greece, Rome, etc. right on up to modern Yugoslavia in the 1990s.
> 
> Historically, people will continue to do business if they can and will barter for payment if they have to. A new government will step in. There will be short-term chaos and there are usually false-starts where the "new try" doesn't get it right either, so they start over again. In the long run, where their was one territory under one government there is now many terrirories with smaller governments. Historically, some of them will fight over resources and/or absorb each other.
> 
> The show Jericho is not that far off from one possible way for it to go down where it starts as* 7 new "Americas" and they start cutting deals and merging until there are two Americas and Texas.*




And texas.. I love it.. so true.


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## hfwarner3 (Feb 19, 2008)

The bumber sticker that almost made me move to Texas:
"I wasn't born in Texas but I got here as soon as I could!"


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## RockyGlen (Jan 19, 2007)

BlueJuniperFarm said:


> The problem is that if there is a total collapse, there are going to be so many 'cascading' effects that chances are very slim that we would be able to pick up and start over. Let's say the economy does collapse (and it's probably going to, although TPTB MIGHT be able to pull a rabbit out of a hat and rescue things one more time -- I'm not counting on it). What's going to happen to all the businesses in this country if they no longer have access to cash or credit in order to operate? What about transportation? What about state and local government, and the water and sewer service they provide, and garbage pick-up? What about the utilities? Would the farmers even be able to get a crop in the ground, with no transportation to bring fuel and fertilizer to them?
> 
> Can you see where I'm going with this? Think, nearly everyone out of work; nearly everything shut down; and slim chance of most of it starting up again. The problem is that once things shut down, parts and materials will begin to be scavenged and sold or bartered, just like the empty houses are being stripped of everything saleable (and then homeless people or druggies move in and live in the gutted shell). There won't be any money to fix the damage, so things will just fall apart, including the roads.
> 
> ...



Hm...I guess I pictured it more as a massive scaling back and not so much a total collapse. I was picturing the unemployment rate around 20-30%, like during the Great Depression. While I was picturing less choices in food, and higher prices, I was thinking the first to go would be all the processed garbage and fast food. I would expect gas rationing, maybe, hospitals for true life and death situations, no more $400 video games and satellite tv and $200 jeans, that kind of thing, probably stopping SS for people who have family or make money elsewhere.

I guess, in my mind, there is a difference between an economic depression and the end of the world as we know it - which is what I make of your description. I'm by no means an economic scholar, so I don't know - but, boy, is your prediction really scary.....it never crossed my mind that an economic depression would stop all government services - I just figured they would ditch all the money wasting programs and focus on the essential - like sewage.


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## hfwarner3 (Feb 19, 2008)

Yes, there are big differences between a recession, a depression, and a collapse. I am personally expecting a recession that will last around 2 years, but I am preparing just in case it is worse...


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## mightybooboo (Feb 10, 2004)

smalltime said:


> Has anyone ever watched this?... whats your take on it?
> 
> http://video.google.com/videoplay?d...=89&start=0&num=10&so=0&type=search&plindex=0
> 
> smalltime


Its the truth about money and who is in Control,the International Bankers.

AMAZING how many otherwise intelligent people dont understand this at all.

Nothing worse than the ignorant intelligent man.At least they should understand.

I can understand the truly stupid not getting it,I can understand the dumbing down of the populace. But the intelligent man who cant grasp this? Well,thats why we are in the pickle we are in.

And why we have been sold into slavery.


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## DianeWV (Feb 1, 2007)

The FDIC insures up to $100,000, right.....I am assuming that is per account not person, correct???


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## hfwarner3 (Feb 19, 2008)

From the FDIC website:



> What Does the FDIC Insure?
> 
> The FDIC insures all deposits at insured banks, including checking, NOW and savings accounts, money market deposit accounts, and certificates of deposit (CDs), up to the insurance limit.
> 
> ...


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## Freeholder (Jun 19, 2004)

RockyGlen said:


> Hm...I guess I pictured it more as a massive scaling back and not so much a total collapse. I was picturing the unemployment rate around 20-30%, like during the Great Depression. While I was picturing less choices in food, and higher prices, I was thinking the first to go would be all the processed garbage and fast food. I would expect gas rationing, maybe, hospitals for true life and death situations, no more $400 video games and satellite tv and $200 jeans, that kind of thing, probably stopping SS for people who have family or make money elsewhere.
> 
> I guess, in my mind, there is a difference between an economic depression and the end of the world as we know it - which is what I make of your description. I'm by no means an economic scholar, so I don't know - but, boy, is your prediction really scary.....it never crossed my mind that an economic depression would stop all government services - I just figured they would ditch all the money wasting programs and focus on the essential - like sewage.


We'll see how things work out, but governments depend heavily on municipal bonds, and those bonds are either not finding buyers, or they are being sold with exorbitant interest rates, rates the communities will be hard-pressed to pay, if they are even able to pay them at all. 

I've read several articles about how vacant homes are being stripped of everything that can possibly be sold, and then what is left is trashed. And I've also seen a lot of articles about how people are stealing metals to sell to the scrap yards. Some of those people qualified for Darwin Awards by trying to cut through high-voltage power lines, but many others are getting away with things like destroying farmers irrigation systems, as one example. As the economy slows even further, this kind of thing will increase, and eventually a lot of our infrastructure will be irreparably damaged (because the governments or the companies won't have any money for more spare parts and repairs). What I see happening, or foresee (no, I'm not a prophet, just have my eyes open), is a deepening spiral of destruction in this country. Each bad thing that happens has a number of effects -- it's like throwing a rock into a pond and watching the ripples spread out from the point of impact. Only in this case there are a lot of points of impact, and each ripple becomes it's own point of impact causing more trouble. You could take transportation for an example -- I heard earlier today that one of the largest trucking companies in the country is going under. What will be the consequences of that? How many other companies were dependent on them for business? How many depended on them for transporting their goods? How many people depended on them for jobs, and how many people depended on those people with jobs buying things from them? You could probably write a book on the consequences throughout our economy of just one large trucking company going out of business (and no, I don't know which one it is yet -- that may be reported within the next few days). 

As for 'TEOTWAWKI', we are already there. This isn't the same world I grew up in -- I think any of the older folks here would agree with that statement. 'TEOTWAWKI' is a very subjective thing. I don't think we are going to end up in total anarchy -- in fact, I strongly suspect that the end result of all the trouble that's just begun will be Orwellian tyranny, total control by Big Brother. But in order to bring people to a point where they will accept that control, we may be allowed to fall pretty far, and especially in the bigger cities we are likely to see riots, gang-warfare, and a lot of looting and crime. 

Kathleen


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## TexasArtist (May 4, 2003)

BlueJuniperFarm said:


> You could take transportation for an example -- I heard earlier today that one of the largest trucking companies in the country is going under. What will be the consequences of that? How many other companies were dependent on them for business? How many depended on them for transporting their goods? How many people depended on them for jobs, and how many people depended on those people with jobs buying things from them? You could probably write a book on the consequences throughout our economy of just one large trucking company going out of business (and no, I don't know which one it is yet -- that may be reported within the next few days).
> 
> Kathleen


Which trucking company is that?


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## pickapeppa (Jan 1, 2005)

I'm thinking that big trucking company simply had too little of a spread between operating costs and profits. We'll be seeing the businesses and goods with the smallest profit margins disappearing first. My hope is that electricity and food aren't among them. Food most likely is, but electricity will depend on your area and how it's supplied. I hope the workers would be willing to take pay cuts before they'd lose their jobs. In either case, there would be plenty of willing unemployed workers to fill their spots in the labor pool if it ever came down to it.

I'm still trying to parse out this fed/treasury relationship and would like to be more clear on how they work together. So far, to me it looks like the banks self-sustain by auctioning debt that's matured, and by offering debt with now lowered interest rates to other banks. When they run out of buyers and borrowers, what happens? How does the treasury intervene? What is this slosh fund you speak of and where does it come from? How much does the slosh fund have?

The muni bond and VIE thing scares me the most, because those imply our towns and cities are going to be hit first. But I could be over reacting or misunderstanding the threat of that situation.


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## texican (Oct 4, 2003)

If the 18wheelers stop rolling, the country stops. 

Most of the truckers that I know, get fuel surcharges before ever cranking up.

Part of my worst case scenario (fiction) for taking this country down, involved half a dozen refineries, two dams, one nuclear plant, and maybe a dozen strategic bridges. When 911 hit, I was worried the islamofools would use my hard knowledge (readily available) and really bring this country to it's knees. Luckily, they took out some building in NYC. If they'd taken out Glen Canyon dam, Lake Mead, several bridges across the Colorado River, and the largest Mississippi river bridges, and took out refineries in Houston, Louisiana, California..... we would still be struggling to recover. Radiation from a NW nuke would poison the land for decades. Southern Arizona, Southern CA, and Las Vegas would be depopulated.... without water, people either leave or die. A dozen people willing to die, could have done this.


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## pickapeppa (Jan 1, 2005)

texican said:


> If the 18wheelers stop rolling, the country stops.
> 
> Most of the truckers that I know, get fuel surcharges before ever cranking up.
> 
> Part of my worst case scenario (fiction) for taking this country down, involved half a dozen refineries, two dams, one nuclear plant, and maybe a dozen strategic bridges. When 911 hit, I was worried the islamofools would use my hard knowledge (readily available) and really bring this country to it's knees. Luckily, they took out some building in NYC. If they'd taken out Glen Canyon dam, Lake Mead, several bridges across the Colorado River, and the largest Mississippi river bridges, and took out refineries in Houston, Louisiana, California..... we would still be struggling to recover. Radiation from a NW nuke would poison the land for decades. Southern Arizona, Southern CA, and Las Vegas would be depopulated.... without water, people either leave or die. A dozen people willing to die, could have done this.


We still have the dilapidated railways.


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## Ernie (Jul 22, 2007)

hfwarner3 said:


> OK, let's look first at history. Even as far back as ancient Egypt, we are able to see a trend where business and technology leap forward - people move to the urban area seeking work - over-taxation, uncontrolled government spending, and/or war cause a collapse - local government tries to trudge on - a significant portion of the population moves back to the rural areas. You can see this in Greece, Rome, etc. right on up to modern Yugoslavia in the 1990s.
> 
> Historically, people will continue to do business if they can and will barter for payment if they have to. A new government will step in. There will be short-term chaos and there are usually false-starts where the "new try" doesn't get it right either, so they start over again. In the long run, where their was one territory under one government there is now many terrirories with smaller governments. Historically, some of them will fight over resources and/or absorb each other.
> 
> The show Jericho is not that far off from one possible way for it to go down where it starts as 7 new "Americas" and they start cutting deals and merging until there are two Americas and Texas.


I love it when the discussion takes the historical approach. Looking back through history is about the best way to predict the future. People like to shake their heads and say, "this time it will be different, we have technology!" but it never turns out different. I guess that's because people are basically the same, from the schmucks who built the pyramids to the schmucks who work for Bank of America. 

As for splitting up America ... have you ever read the book "Warday" by Whitley Strieber? 

http://en.wikipedia.org/wiki/Warday

Seems like a whole lot of "Jericho" was based off of that.


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## JGex (Dec 27, 2005)

Ernie said:


> I love it when the discussion takes the historical approach. *Looking back through history is about the best way to predict the future. *People like to shake their heads and say, "this time it will be different, we have technology!" but it never turns out different. I guess that's because people are basically the same, from the schmucks who built the pyramids to the schmucks who work for Bank of America.
> 
> As for splitting up America ... have you ever read the book "Warday" by Whitley Strieber?
> 
> ...


You should read Ravi Batra's _The New Golden Age: The Coming Revolution against Political Corruption and Economic Chaos_ . He talks about how everything is cyclical and goes so far as to establish a pattern in economics.

Batra also penned _ Greenspan's Fraud: How Two Decades of His Policies Have Undermined the Global Economy _.

I haven't read that Strieber book. Might need to pick it up somewhere.


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## hfwarner3 (Feb 19, 2008)

Ernie said:


> I guess that's because people are basically the same, from the schmucks who built the pyramids to the schmucks who work for Bank of America.


Ummm ... that's where I used to work, so I guess I am one of those schmucks, too, but I am getting better. 

I know what you mean, though. In IT, most of the guys I work with are libertarian or republican but they see technology not as a tool but as a solution. They don't get the whole "Internet going away" thing.

If TSHTF, yes, I would still have a computer to use (thank you solar and battery backup) if need be, but what would I use it for? Video games take up too much electricity, television too (one computer is a video server), who the heck am I going to email, and what will I be putting in Excel?

Now one of the guys at work does embedded programming to make his own robotic and remote control controllers. That would be useful and I wish I had the time to learn more since homemade, solar-powered automation would actually have a use after TSHTF.


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## Aintlifegrand (Jun 3, 2005)

pickapeppa said:


> I'm thinking that big trucking company simply had too little of a spread between operating costs and profits. We'll be seeing the businesses and goods with the smallest profit margins disappearing first. My hope is that electricity and food aren't among them. Food most likely is, but electricity will depend on your area and how it's supplied. I hope the workers would be willing to take pay cuts before they'd lose their jobs. In either case, there would be plenty of willing unemployed workers to fill their spots in the labor pool if it ever came down to it.
> 
> I'm still trying to parse out this fed/treasury relationship and would like to be more clear on how they work together. So far, to me it looks like the banks self-sustain by auctioning debt that's matured, and by offering debt with now lowered interest rates to other banks. When they run out of buyers and borrowers, what happens? How does the treasury intervene? *What is this slosh fund you speak of and where does it come from?* How much does the slosh fund have?
> 
> The muni bond and VIE thing scares me the most, because those imply our towns and cities are going to be hit first. But I could be over reacting or misunderstanding the threat of that situation.


I'lltry and explain the best I can for my limited knowledge...

The slosh is the money the fed interjects or withdraws in order to meet their target rate. When the Fed sets the interest rates at 3%..they actually have to manipulate it to be as close to that through adding or withdrawing money from the market. The fed reserve sets a target for overnight borrowing between banks..they either add or withdraw money in exchange for securities ( usually Treasury bonds) These are usually temporary... when Ben spoke of the spreads being to wide what he meant was that he was having difficulty in mantaining the targeted rate he set at his last rate cut.. it was falling too far below 3% and he was having to add too much liquidity...this is bad because the money he is putting into the system is being tied up trying to keep things afloat and the first responsibility is to finance the national debt which grows exponentially..

It seems to me that it is a game of robbing peter to pay paul...and eventually it comes down around you.


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## Ernie (Jul 22, 2007)

hfwarner3 said:


> Ummm ... that's where I used to work, so I guess I am one of those schmucks, too, but I am getting better.
> 
> I know what you mean, though. In IT, most of the guys I work with are libertarian or republican but they see technology not as a tool but as a solution. They don't get the whole "Internet going away" thing.
> 
> ...


As soon as I wrote that I figured someone might work there and take offense at that. Ah well ... I used to work for Charles Schwab, so I'm a schmuck too. 

The computer isn't something I expect to keep going in my household. I'm surprised sometimes that I still have one now. I like to use it for my writing, but I swear for every minute of productivity it gives me over a basic typewriter it steals five more. 

Unless you can fabricate your own components, robotics are going to become a thing of the past should the power go off for any extended time. Any moving part wears out quick.


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## pickapeppa (Jan 1, 2005)

Aintlifegrand said:


> I'lltry and explain the best I can for my limited knowledge...
> 
> The slosh is the money the fed interjects or withdraws in order to meet their target rate. When the Fed sets the interest rates at 3%..they actually have to manipulate it to be as close to that through adding or withdrawing money from the market. The fed reserve sets a target for overnight borrowing between banks..they either add or withdraw money in exchange for securities ( usually Treasury bonds) These are usually temporary... when Ben spoke of the spreads being to wide what he meant was that he was having difficulty in mantaining the targeted rate he set at his last rate cut.. it was falling too far below 3% and he was having to add too much liquidity...this is bad because the money he is putting into the system is being tied up trying to keep things afloat and the first responsibility is to finance the national debt which grows exponentially..
> 
> It seems to me that it is a game of robbing peter to pay paul...and eventually it comes down around you.


Somehow this concept makes me feel like a five year old with his nose in an organic chem textbook. 

So does the treasury simply issue the bonds when the fed needs to pump money into the system?


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## Aintlifegrand (Jun 3, 2005)

pickapeppa said:


> Somehow this concept makes me feel like a five year old with his nose in an organic chem textbook.
> 
> So does the treasury simply issue the bonds when the fed needs to pump money into the system?



The fed buys the treasury bonds or sells them as needed to bring the rates in line..this exchange is only temporary (TOMO) in most cases...usually they set the rate ( 3% now) but trades may range anywhere from 2.5% to as high as 5 %.. when it is at 5%..the excess money is known as slosh and the fed uses it to regulate the rate closer to its target..

Due to the current credit crisis, no one is lending and the rate is falling far below the targeted rate..so basically there is no slosh in which to bring it up to the rate...and that means the fed will have no choice but to continue to lower the rate to keep it in line...which causes inflation in commodities and the dollar to continue to tank...When the economy is slowing at this pace then inflation should fall but because of this credit crunch, the rate has to keep getting cut in order to get money moving...which causes the opposite with inflation and this leads to stagflation...I hope this makes some sense..lol


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## pickapeppa (Jan 1, 2005)

Aintlifegrand said:


> The fed buys the treasury bonds or sells them as needed to bring the rates in line..this exchange is only temporary (TOMO) in most cases...usually they set the rate ( 3% now) but trades may range anywhere from 2.5% to as high as 5 %.. when it is at 5%..the excess money is known as slosh and the fed uses it to regulate the rate closer to its target..
> 
> Due to the current credit crisis, no one is lending and the rate is falling far below the targeted rate..so basically there is no slosh in which to bring it up to the rate...and that means the fed will have no choice but to continue to lower the rate to keep it in line...which causes inflation in commodities and the dollar to continue to tank...When the economy is slowing at this pace then inflation should fall but because of this credit crunch, the rate has to keep getting cut in order to get money moving...which causes the opposite with inflation and this leads to stagflation...I hope this makes some sense..lol


Great. Thanks for your tutoring on this. My only confusion is, where is the fed getting the money to buy and sell the treasuries, was it set up with a fixed fund and kept revolving out of that? 

Is it digits in a computer with the only value that of a debt someone owes the bank?

I get the inflation part, it's the inner workings, where they get the dough to buy and sell, etc.

Are they running out of funds? Or are they just running out of buyers?

What happens if the rate gets down to 0%?

Has anyone posted the link here to the latest report from the St. Louis Federal Reserve? It has several graphs, some of it I can understand, some of it not. I'll try and dig it up to post.

I don't trust the FDIC has the funds to cover everyones' deposits. I've looked into that and the whole reserve requirement/premium thing is just too shady for me to trust. I posted a long series of posts one night while sifting through the FDIC website and trying to reinterpret the main points. Not sure how accurate it was, but reading through their website didn't instill more confidence in that set-up. Nobody seemed to want to comment on it one way or the other.

Maybe somebody here would be able to tell me how close it came to the real deal. My bet is on them having to print a ton of dinero to cover the deposits, in which case you'll get your money back, but what will it be worth at that point.


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## edcopp (Oct 9, 2004)

pickapeppa said:


> Great. Thanks for your tutoring on this. My only confusion is, where is the fed getting the money to buy and sell the treasuries, was it set up with a fixed fund and kept revolving out of that?
> 
> Is it digits in a computer with the only value that of a debt someone owes the bank?
> 
> ...


I would bet that your bet is right on the money (pun intended):rock:


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## TNHermit (Jul 14, 2005)

pickapeppa said:


> Great. Thanks for your tutoring on this. My only confusion is, where is the fed getting the money to buy and sell the treasuries, was it set up with a fixed fund and kept revolving out of that?
> 
> Is it digits in a computer with the only value that of a debt someone owes the bank?
> 
> ...


I heard years ago when things were good that the FDIC only had something like 20-25% of what was needed to cover. They assumed that would cover any run on a bank but that the chance was nil that they all or most would fail at once


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## Nana2boys (Mar 8, 2008)

So, do I need to withdraw my money out of our money market account and put it somewhere else?. We're certainly not making any interest off it. Might be time to hide it between the matresses.


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## mightybooboo (Feb 10, 2004)

Nana2boys said:


> So, do I need to withdraw my money out of our money market account and put it somewhere else?. We're certainly not making any interest off it. Might be time to hide it between the mattresses.



Money market funds can offer benefits of savings accounts but with generally higher returns. While they aren't insured by the government like savings accounts, these investments are often *considered safe* because their primary focus is on Treasury bonds *and debt from banks and big companies.
*

An investment in a money market fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation (FDIC). though money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. 

EEEK!!!!!:help:


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## Explorer (Dec 2, 2003)

TNHermit said:


> I heard years ago when things were good that the FDIC only had something like 20-25% of what was needed to cover. They assumed that would cover any run on a bank but that the chance was nil that they all or most would fail at once


That is high. I believe the reserve requirements are about 10% or somewhat less.


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## hfwarner3 (Feb 19, 2008)

No, banks have to have 1 dollar in deposits for every 10 dollars they loan. That is where the 10% comes form.


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## uyk7 (Dec 1, 2002)

"So, do I need to withdraw my money out of our money market account and put it somewhere else?"



Read an article this morning on News With View (NWV.com ?) and the "expert" recommends opening an account offshore and saving money in a foreign currency.


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## hfwarner3 (Feb 19, 2008)

Do you have a link? I would like to read that one.


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## uyk7 (Dec 1, 2002)

Here is the link: http://www.newswithviews.com/Stang/alan39.htm


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## hfwarner3 (Feb 19, 2008)

Oh, its an Amero article.


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## Aintlifegrand (Jun 3, 2005)

hfwarner3 said:


> No, banks have to have 1 dollar in deposits for every 10 dollars they loan. That is where the 10% comes form.


I had heard that the President had signed an exec order that lifted the reserve requirements required in order to help deal with this credit crisis and liquidity issue...any truth to that or anything anyone else might know about this?


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## sgl42 (Jan 20, 2004)

> http://www.itulip.com/forums/showthread.php?t=292
> 
> What (Really) Happened in 1995?
> 
> ...


If you read the whole article, he's makes a fairly strong case that reserve requirements were effectively reduced from about 10% to essentially zero.

--sgl


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