FDIC "Insurance" Getting Wiped Out

This past Thursday, BankUnited FSB became the nation’s 34th bank to fail this year.  Bank failures are nothing new, but this one will cost the FDIC $4.9 Billion per the  FDIC press release issued Thursday, May 21.  BankUnited had assets of $12.8 Billion and deposits of $8.6 Billion.

The takeover group is led by the infamous Carlyle and Blackstone investment groups.  The take-away for the average Joe Public – is this:

The FDIC started 2008 with $53 Billion in its insurance fund, and this number is now less than $11 Billion.  This translates to mean that less than a quarter of every $100 you have in a bank account is now FDIC “insured.”

It does not take a genius to predict that the FDIC insurance fund will be depleted this year, and a public bank closing (or “bank holiday” – as if it were some sort of twisted vacation) is likely this year.  (Photo courtesy Luc Viator)

As a reminder, the press often compares the Obama administration to FDR.  FDR closed the nation’s banks in 1933 when he also outlawed gold.  Immediately afterwards, the dollar was devalued by 67%.

Speaking of gold, the gold price shot up to $950/oz after reaching a minimum of $865/oz in mid-April.  Holders of gold will win the Gold War that is currently playing out in the world’s smallest major market of roughly $25 Trillion in 2008.  Please try these recent articles I wrote:

• Gold and the “Average Man”
• Ron Paul’s rEVOLution Versus the “One Ring” of the Federal Reserve
• The Gold War – China and the US Treasury Market
• Silver and Gold ARE Money
  
• Bernanke’s Great Lie – The “Gold Standard” and the Great Depression
  

What to do? I do not wish to repeat myself, so take a look at the advice I offered last month in “Off a Cliff with No Airbags: The FED Banking System Quivers in Fright“.