Surviving the crash

[Xaevian]

Not enough coffee yet to read big words, but I have noticed several stories that use the words deposits and depositors when they should be using the words investor and investments

The reality ACTUALLY is, 100% of all deposits at all banks including SVB are insured up to $250,000 (generally-can be more but never less). The misleading part is that 90% of their depositors at SVB had more than that deposited there. Depositors can often get additional insurance at certain banks for funds that exceed that amount. I don't know if SVB had that option.

As usual, there is more freakout than necessary, simplified or sloppy reporting, and outright bias (both sides). In other words, making full use of this event for maximum personal/political gain.

 

[Jay Walk]

Elitists are getting reimbursed well above $250,000 each.

Gambling is not really gambling if you're In The Club.

 

[VinnieBoomBah]

The reality ACTUALLY is, 100% of all deposits at all banks including SVB are insured up to $250,000 (generally-can be more but never less). The misleading part is that 90% of their depositors at SVB had more than that deposited there. Depositors can often get additional insurance at certain banks for funds that exceed that amount. I don't know if SVB had that option.

As usual, there is more freakout than necessary, simplified or sloppy reporting, and outright bias (both sides). In other words, making full use of this event for maximum personal/political gain.

Agreed, however a huge amount of the $$$ involved came from investors not depositors, individuals, corporations or what have you that had invested money in the hedge funds oh, sorry . . . community banks investment opportunities (most notably as it turns out long term T-bills) and their loses were the primary drivers of SVB's liquidity troubles

 

[Burt Gummer]

FDIC underfunded. That 'people are with accounts under $250k' are protected is a lie. Combine a banking collapse with a major event such as a FF or war and it is pretty much a sure thing people will never see their funds again. This isn't fear mongering, it is factual. Trusting a bank is like trusting gov - very bad for your health. FDIC's funding of around 55 billion will only cover the first 6-8 bank failures.

 

[Provincial]

Agreed, however a huge amount of the $$$ involved came from investors not depositors, individuals, corporations or what have you that had invested money in the hedge funds oh, sorry . . . community banks investment opportunities (most notably as it turns out long term T-bills) and their loses were the primary drivers of SVB's liquidity troubles

I am going to establish definitions of two types of participants in the banking crisis, just for clarity in the following comments:

Depositors are entities (people or businesses) that entrust money to a bank in exchange for a contract to return that money, with an agreed-upon rate of interest.

Investors are entities (people or businesses) that provide money for the bank to use to establish and run the bank, in exchange for a percentage of ownership of the bank itself.

The government doesn't want to sell Treasury Bills to individual investors. They prefer to sell blocks of these to "gateway" buyers who then resell them, or package them into investment instruments. Part of this is to steer the business through banks.

The result is that people ( and businesses) that need to store cash in these secure investments are forced to go through banks, which puts that cash on the bank's balance sheet. That asset is marked down when the current sales price of the Government Bonds backing the CD (or similar instruments) fall in value. This fall in value in this case is caused by Government and Federal Reserve actions to raise the interest rate on current bond sales.

Since the old bonds pay almost no interest (due to Government and Federal Reserve actions at the time of their original sale), and current bonds pay several percentage points more, the value of the newer bonds is greater, and the value of the old bonds falls, sometimes drastically. But the real payoff of the older bond is still the same, so if the customer (buyer of the bank's instruments) had been able to buy the bonds directly, there would be no crisis, because the asset would have been held directly.

On a strictly moral basis, the Government is properly protecting the depositors, because the fall in bond values is due to the actions of the Government. However, there is no moral reason to protect the investors.

This is different from investment in the bank itself, where investors put up money to establish and run the bank. If the bank itself (separate from deposits) declines, it is simply the risk taken in investment activity.

By protecting uninsured depositors, the Government has taken on a huge liability, and we will see how that turns out. By doing this, the Government now has a tremendous incentive to keep this contagion under control.

 

[JackFrost]

Not enough coffee yet to read big words, but I have noticed several stories that use the words deposits and depositors when they should be using the words investor and investments

It's called "newspeak" better get used to it!

 

[Burt Gummer]

 

[Longwalkhome]

That will not be the "banks" it will be the Fed. They would LOVE to get a US digital Currency and make all others illegal. Right now banks that are "tracking" gun sales why care? Unless someone is using plastic to buy illegal guns out of some guys trunk? The Fed's know about all your gun buys if you are buying with plastic without the banks help. If some bank wants to cut off "Joe's House of Guns" from plastic? Again who cares. Some other bank will be glad to have Joe's account.
The one thing that may hold them back here on a US controlled digital is drugs. There is HUGE money behind drugs and if we do ever go with this digital controlled by the Gov the cartels would be out. Since they have billions of dollars to spread around they will spread it with law makers if they have too. The reason the entire country of Mexico is in the shape its in is all that cash. Tell those cartels the US market is going to suddenly be off limits? Watch the flood of money coming to US law makers to not do it. May be some good from these scum yet. Shame that it may be up to them to save the law abiding from their own complacence.

Just a point of view and I don't expect anyone to agree. Guns and ammo are wealth, they are like cash in that they are easily recognized as having value and can be used in buying and selling. If a person believes that our personal wealth is being destroyed by inflation then guns and ammo have been the true hedge, a currency better than gold and silver.

Add to that guns and ammo are a tool of freedom, you can feed yourself and protect yourself and family. Guns and ammo are the right arm of the patriots and that's why a corrupt government fears the ownership.

So you ask why the government wants to know where the guns and ammo are going, it's obvious to me.

 

[oremike]

Just a point of view and I don't expect anyone to agree. Guns and ammo are wealth, they are like cash in that they are easily recognized as having value and can be used in buying and selling. If a person believes that our personal wealth is being destroyed by inflation then guns and ammo have been the true hedge, a currency better than gold and silver.

Add to that guns and ammo are a tool of freedom, you can feed yourself and protect yourself and family. Guns and ammo are the right arm of the patriots and that's why a corrupt government fears the ownership.

So you ask why the government wants to know where the guns and ammo are going, it's obvious to me.

It might be a safe assumption that I have more of a ready reserve in my gun safe and ammo cans than I do in a savings account.

 

[Howard1955]

Sure, much easier, until your bank fails and/or your card quits working. Remember it's all about control.

A few years ago, I decided to see what it would be like to stop using debit and credit cards.

It didn't take long to discover that only using cash severely limited what I could do. Motels and airlines were the most obvious problems, since they insisted on plastic money.

Once the grocery stores go cashless, we'll be in 666 territory.

 

[oremike]

When you can't use cash you have to ask permission to use "your" money. Think about how when you are in a check out line and you or someone else struggles with their card payment. How about this to combine a couple different thoughts, the card companies are tracking firearm sales. What if they refuse to be used for firearm sales and you can't use cash anymore. Sounds like a gun ban without worrying about the hassle of going to the people for that silly vote thing.

 

[sobo]

When you can't use cash you have to ask permission to use "your" money. Think about how when you are in a check out line and you or someone else struggles with their card payment. How about this to combine a couple different thoughts, the card companies are tracking firearm sales. What if they refuse to be used for firearm sales and you can't use cash anymore. Sounds like a gun ban without worrying about the hassle of going to the people for that silly vote thing.

Which is precisely why I resist such bullshiit vehemently... The fact that the CC companies have "said" they've paused this unconstitutional activity is heartening, but I suspect one of two things: 1) they are lying and are just saying they paused it, and are actually still doing it, or 2) they in fact paused it, but will reengage the activity once the heat over it dies down.

 

[Longwalkhome]

Portland resident warns criminals will turn to home break-ins as businesses flee city

Portland, Oregon, residents Angela Todd and Damian Bunting sound the alarm on the crime crisis and impact of district attorney shortages in their state.

www.foxnews.com

The crash.

 

[The Heretic]

Just a point of view and I don't expect anyone to agree. Guns and ammo are wealth, they are like cash in that they are easily recognized as having value and can be used in buying and selling. If a person believes that our personal wealth is being destroyed by inflation then guns and ammo have been the true hedge, a currency better than gold and silver.

Durable goods are assets, especially if you do not owe anything on them - i.e., own them free and clear, or at least, have more equity than debt on them (e.g., my real estate, the only thing that I owe $ on, has 2-3X the equity of what I owe on them, plus I have enough reserve in my IRAs to pay the debt 2X over).

 

[Alexx1401]

Just a point of view and I don't expect anyone to agree. Guns and ammo are wealth, they are like cash in that they are easily recognized as having value and can be used in buying and selling. If a person believes that our personal wealth is being destroyed by inflation then guns and ammo have been the true hedge, a currency better than gold and silver.

Add to that guns and ammo are a tool of freedom, you can feed yourself and protect yourself and family. Guns and ammo are the right arm of the patriots and that's why a corrupt government fears the ownership.

So you ask why the government wants to know where the guns and ammo are going, it's obvious to me.

I have LONG said things like ammo make a GREAT hedge. Not just for things like inflation. I have lived through so many panic shortages I can't even remember how many now. None of them effect me as I don't let them. Last time we moved one kid was helping and movers said they did not want to deal with guns or ammo. So one son was helping me and I could see him looking at the ammo like I had gone tinfoil hat. We were in the middle of another panic shortage. I picked up a box of 9 ammo. Said I paid $8 each for these. Right now to buy it I would have to pay $50 a box. I told him remember this when your Mom and I shuffle off. These panics come over and over. Don't want the ammo left behind just wait till another panic hits and sell it. He was no longer looking at me like I had gone nuts. Wife and I like to shoot and at every panic shortage we can still go to the range without taking out a loan for ammo.
If there is ever a collapse the stuff would be great for barter too. Every panic shortage a bunch of people who should know better are caught without yet again. Those who have it will easily be able to trade it for what they need. In the lead up to Y2K I said the same thing. Wife started to worry about some buying HUGE amounts of food. I told her no worries. If anything really happens people will feed us to protect all that stuff they bought since they did not buy a gun or ammo.

 

[Alexx1401]

Elitists are getting reimbursed well above $250,000 each.

Gambling is not really gambling if you're In The Club.

That right there! People who do really stupid things with money, then fail big time, learn nothing if there is no pain. History keeps repeating for just this reason. Many who run something into the ground pay no price for it. They are soon working at another place and can start to do the same thing again. Guess who gets to pay for their stupidity since its not them?

 

[The Heretic]

If there is ever a collapse the stuff would be great for barter too. Every panic shortage a bunch of people who should know better are caught without yet again. Those who have it will easily be able to trade it for what they need. In the lead up to Y2K I said the same thing. Wife started to worry about some buying HUGE amounts of food. I told her no worries. If anything really happens people will feed us to protect all that stuff they bought since they did not buy a gun or ammo.

Yup. I paid attention to the prices because I had thought about how much value I would assign to ammo if SHTF. I have a fair idea now since most ammo easily increased by 2X $ in just a few months due to panic buying/hoarding and that was with many manufacturers putting in additional shifts to produce more. You can imagine the value if there was zero production going into civilian markets.

E.G., I paid 30-35 CPR for 5.7x28 ammo, and it easily went up to 3-5X that amount and is still 2X+ today, on sale.

 

[Alexx1401]

Portland resident warns criminals will turn to home break-ins as businesses flee city

Portland, Oregon, residents Angela Todd and Damian Bunting sound the alarm on the crime crisis and impact of district attorney shortages in their state.

www.foxnews.com

The crash.

People there are finding out the old line be careful what you ask for is real. MANY there have been supporting this for decades. Now they are starting to see what happens when you keep asking for this.

 

[Alexx1401]

A few years ago, I decided to see what it would be like to stop using debit and credit cards.

It didn't take long to discover that only using cash severely limited what I could do. Motels and airlines were the most obvious problems, since they insisted on plastic money.

Once the grocery stores go cashless, we'll be in 666 territory.

A lot of places that do not want cash do it for cost. Motels LONG ago got to be a real problem here. They kept getting robed buy scum since they had cash. So many started to go with drop safes yet scum would still shoot someone when they could not get at the cash. Pot shops here are seeing this BIG time now. If the grocery stores start to get hit bad they will go cashless when it gets to the point its no longer worth the cost of taking that cash. As I have said before the one thing that will be fun to watch is the drug cartels. Wait till some of them find out all that cash flow may stop. They will start donating HEAVILY to law makers to keep that flow going. Those scum may serve some "good use" after all.

 

[Alexx1401]

Yup. I paid attention to the prices because I had thought about how much value I would assign to ammo if SHTF. I have a fair idea now since most ammo easily increased by 2X $ in just a few months due to panic buying/hoarding and that was with many manufacturers putting in additional shifts to produce more. You can imagine the value if there was zero production going into civilian markets.

E.G., I paid 30-35 CPR for 5.7x28 ammo, and it easily went up to 3-5X that amount and is still 2X+ today, on sale.

YEP! If they cut off the supply completely? My ammo would soon be worth more than the silver I own.