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The FDIC Illusion of Insured Bank Deposits

This infographic shows the size of the Federal Deposit Insurance Corporation's Fund vs. the total deposits FDIC covers.

 

Demonocracy.info - $100 - One Hundred Dollars
$100 Dollars
$100 - Most counterfeited money denomination in the world.
Keeps the world moving.
$10,000 Dollars
$10,000 - Enough for a great vacation or to buy a used car.
Approximately one year of work for the average human on earth.
Demonocracy.info - $10,000 - Ten Thousand Dollars

$1 Million Dollars
$1,000,000 - Not as big of a pile as you thought, huh?
Still, this is 92 years of work for the average human on earth.
Demonocracy.info - $1,000,000 - One Million Dollars
$100 Million Dollars
$100,000,000 - Plenty to go around for everyone.
Fits nicely on an ISO / Military standard sized pallet.

The couch is made from $46.7 million of crispy $100 bills.
Demonocracy.info - $100,000,000 - One Hundred Million Dollars

$100 Million Dollars could provide 2000 jobs @ $50,000 / year

Here are 2000 people standing shoulder to shoulder, looking for a job.
The Federal Reserve's mandate is to maintain price stability and low unemployment.
The Federal Reserve prints money based on the assumption that increasing money supply will boost jobs.

 

 

 

$100 Million Dollars

Enough to keep 2000 people employed for 1 year @ $50,000 / year

Demonocracy.info - $100,000,000 - One Hundred Million Dollars

$1 Billion Dollars
$1,000,000,000 - You will need some help when robbing the bank.
Interesting fact: $1 million dollars weighs 10kg exactly.
You are looking at 10 tons of money on those pallets.

$25 Billion - FDIC - Federal Deposit Insurance Corporation Fund

FDIC insures 7,181 financial institutions. The FDIC is funded by financial institutions that pay for deposit insurance coverage.

During the 1980's/1990's savings and loan crisis, a parallel insurer- the FSLIC (Federal Savings and Loan Insurance Corporation) went bankrupt.
The FSLIC replacement named RTC was merged into the FDIC. The savings and loan crisis cost tax payers $150 Billion.

The FDIC takes control of failed banks and financial institutions, where it first moves to find a buyer of all the bank's assets, including the toxic ones. After the sale of assets (including toxic, usually at discounted prices) the FDIC attempts to cover losses. The FDIC will first pay-out all insured accounts, followed by
applying “hair-cuts” to uninsured deposits. Safe deposit boxes, bond holders, stocks, money funds, etc. are not insured by FDIC.

Due to bank failures during the 2008/2009 bank crisis, the FDIC fund fell to $0.648 billion by August of 2009. Subsequent bank failures almost bankrupted the FDIC, so it demanded a 3 year pre-payment from banks to shore up its capital. Wikipedia - "According to the FDIC.gov website (as of March 2013), 'FDIC deposit insurance is backed
by the full faith and credit of the United States government.'"
This is less than clear, since there are no laws binding the U.S. government to make good on FDIC insurance liabilities.
The details of FDIC are found on Wikipedia | Source Wikipedia & ZeroHedge


 

FDIC Building
San Francisco

 

$25 Billion
FDIC Insurance Fund
FDIC Insurance Deposit Fund - $25 Billion
Top 5 Banks are Unprofitable without Tax Subsidy

The top 5 banks - CitiBank, Goldman Sachs, JP Morgan Chase, Bank of America and Wells Fargo are not profitable without tax subsidy. The 'earned' profits for the big 5 are almost entirely a gift from tax payers.
Full detailed earnings list found here - America's TBTF Bank Subsidy From Taxpayers: $83 Billion Per Year

Follow this link for graphic of top 5 bank profit breakdown.


 

$68.9 Billion
5x Biggest Bank Profits with Subsidy
(Typical Annual Report)

 

$63.5 Billion
Value of Tax-Payer gifted (funded) Subsidy

 

$7.01 Billion
5x Biggest Bank Profits without Tax-Payer
funded Subsidy

 

Goldman Sachs

 

Citi Bank

 

JP Morgan Chase

 

Wells Fargo

 

Bank of America

 

$9294 Billion ($9.3 Trillion)
Deposits at Commercial US Banks

 

$1102 Billion ($1.1 Trillion)
Total US Currency in Circulation
(All dollars and coins)

 

$25 Billion
FDIC Insurance Fund
US Bank Deposits vs. Currency in Circulation

The discrepancy between deposits and currency in circulation is shown above. This means in the case of a nationwide bank run in United States, the Cyprus-style hair-cut on deposits ( a.k.a. deposit confiscation) would be over 80% for US commercial bank deposits. There are not enough dollars circulating to cover all deposits if they were to be pulled at the same time. In case of bank runs this means withdrawal limits at ATMs and FDIC trying to help out to cover the losses.

Source: ZeroHedge


United States Derivative Exposure
$300 Trillion ($300,000 Billions)

Derivatives are wild financial bets made by banks order to speculate or hedge risk,
ranging from stocks, bonds all the way to weather. In essence a casino-style bet.
The total notional derivative exposure of the top 25 holding companies is $297,514 Billion.
Notional means "a small amount of money controlling a large position"

Bank of America, Merrill Lynch, CitiBank and others have a massive derivative exposure and have moved its derivatives into FDIC insured accounts due to their downgraded credit ratings.
Bank of America alone moved $75 Trillion to FDIC insured accounts.
There's a lot of legal jargon in the way of protecting depositors before derivative
counter-parties. In the 2008 crash it was derivatives based on likelihood that
debt would be paid
that triggered the global economic crisis of 2008.
The high rollers of Las Vegas don't know how to roll compared to bankers.
The viability of FDIC to save a large scale bank failure is in question.


 

 

$300 Trillion ($300,000 Billions)
Total US Financial Derivative Exposure


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