Days Away from Economic Chaos

Rumors of a "Bank Holiday" are picking up. If it were ONLY fear of such a thing driving the rumors, I wouldn't be concerned. In particular, you want to keep your eye on "Potential Trigger Events". In this case, one occurs on August 25th. Maybe America's notorious apathy will once again reign supreme and nothing will happen. But it wouldn't hurt to stand close to an exit.

The Mother of all Bank Runs - "
Days Away From Economic Chaos?

by Bill Sardi

America is just a few days away from a possible day of reckoning. I again call attention to this day, August 25, when the Federal Deposit Insurance Corporation issues its 2nd Quarter report for 2009 on the state of health of American banks.

It has not particularly alarmed Americans that its growth and prosperity have been built upon debt. The American public is a bit desensitized, particularly since the Y2K threat fizzled. We must wait and see how Americans respond to the upcoming FDIC report.

The following charts tell the story. There are roughly 8400 American banks that set aside a small portion of their profits to aggregately insure bank depositors should their local bank fail. A plethora of bank failures has depleted the FDIC reserve fund from $52.8 billion in 2008 to $13 billion in the 1st Quarter of 2009. (Click on the link "Mother of All Bank Runs" to see the whole article.)


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Uh Oh. ... Trouble Dead Ahead - ".....foreigners are rejecting virtually all forms of US debt, most specifically corporate and agency (mortgages.)....... What we're now seeing is outright rejection - it began slowly, but as it has become clear that The Fed was hellbent and determined to go to the wall, consequences be damned, that trickle of rejection has turned into a veritable flood."
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A few other interesting, but now seemingly trivial articles:



Seller, beware: Feds cracking down on garage sales
US Helps Spanish Company Buy Failured Texas Bank by Putting $9.7 Billion Loss on Taxpayers

Workplace Suicides Surge by 28%

Folks are stealing hay in Texas - Signs of the times are popping up all over. It's the collection of events like this that make up the big picture.