• WoodScientist@sh.itjust.works
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    13 days ago

    Wait til these idiots try to abolish the FDIC.

    People know that banks engage in all sorts of complex, stupid, and risky financial derivatives engineering. The only reason anyone has confidence in the banks is due to FDIC insurance. If they fuck with that, it will trigger a run on every bank in the country. I imagine Congress would step in to stabilize things, but it could be quite hairy for awhile.

    Honestly, right now, for those who are able, keeping a decent chunk of cash in your mattress is no longer the game of cranks and weirdos.

    • CharlesDarwin@lemmy.world
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      14 days ago

      I imagine Congress would step in to destabilize things, but it could be quite hairy for awhile.

      I assume you meant stabilize, but given that Congress is controlled by Republican freaks, I’m unsure.

    • BradleyUffner@lemmy.world
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      13 days ago

      Most people have no idea what FDIC is. They have confidence in banks because “that’s where you put money”. They have no concept of what their personal bank failing would mean.

      If Musk said he was shutting down the FDIC, the vast majority of people wouldn’t care until after their bank failed. By then it would be too late.

      • WoodScientist@sh.itjust.works
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        13 days ago

        I agree that most people have no idea what the FDIC does currently. But if the FDIC did disappear, people would be educated very quickly. When I say “people,” I mean enough people are currently aware of it that the FDIC’s disappearance would immediately trigger a complete bank run on every bank in the country. And if the FDIC did dissolve, you can be sure that the media would be breathlessly reporting on what a catastrophe it is. That alone would trigger mass bank runs.

        And I would push back on the idea that there is nothing that could be done, that it would be too late. At that point, I imagine Congress would step in. They would reestablish the FDIC and restabilize the banking system. They could simply say that all bank deposits are going to be retroactively protected, and that the Federal Reserve will print whatever money is necessary to make people whole again. That could be done. And enough wealthy and powerful people would be screaming at Congress to do this, that I think even the Republican Congress would do it. I don’t trust Congress to do what is needed to protect the poor. I do trust them to do what is needed to save their own hides. I don’t trust a Republican Congress to prevent a bank from screwing me over with sketchy fees. I do trust a Republican Congress to act when their own life savings are being wiped out.

        Thus I don’t think people need to a prep for a complete and permanent collapse of the banking system. I’m recommending more that people, if they are able, to have enough currency to buy food for the few months it might take for Congress to restabilize the system and for Musk to be tied to a boulder and thrown into the ocean.

    • ArgentRaven@lemmy.world
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      13 days ago

      As someone who does IT audits for banks in Puerto for FDIC audits, this is scary. The banks will embezzle, but they’ll also get hacked so we won’t know where the money went.

      This makes me think twice about having a bank account at all.

    • gt5@lemm.ee
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      13 days ago

      This is extra dumb because the fdic is funded by insurance premiums paid by the banks. It literally costs taxpayers nothing