Is your bank safe? - there will be no more bank 'bailouts'
When things are going well, no one is really concerned with how safe is their particular bank. But when we move into a financial crisis, some then become concerned, but most still go through their lives oblivious to their banking issues. And, when the minority of people become concerned it is usually too late to do something about it. The time to prepare is when things are still relatively good.
Furthermore, as our largest banks still own approximately the same ratio of assets they did in 2007, it is clear that the causes of the banking crisis of 2008 has been greatly ignored. Further expected weakness within smaller banks will also cause further consolidations, which will ultimately cause that ownership percentage to further rise along with the risks within our banking system.
In fact, there is only approximately $100 billion in actual cash greenbacks in the US vaults and at the Fed. If you compare this figure with the estimated $90 trillion worth of dollar-denominated credit outstanding , it becomes abundantly clear that the actual cash on hand is insufficient backing for the total denominated credit outstanding. This ratio is over $9000 of debt for each dollar of greenback available to backstop such debt.
In 2002, the top 10 banks owned 55% of the total US banking assets. However, over the last several years, the regulators and others who are charged with the oversight of our banking system have not reduced the risk in our banking system. In fact, now 10 banks own approximately the same percentage of all US banking assets as they did in 2007, with the top 4 owning approximately 35%.
Therefore, it is up to the individual investor to ignore the enticing commercials with all their gimmicks that they see regarding various banks and to not simply look for the most convenient banking relationship they can find. Rather, as an individual investor armed with the knowledge that has been presented here, you must take matters into your own hands today, and actually do your own due diligence regarding the bank to which you entrust your money for"safekeeping.
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