"He will put the sheep on his right and the goats on his left."
Matthew 25:33

Wednesday, September 23, 2009

FDIC soon in hock

The FDIC, responsible for "bailing out" failed banks, is considering borrowing money from those same banks to stay in the black. In theory, the FDIC collects funds from banks, like an insurance company, to have a cash "cushion" to cover the debts of banks that fail. Unfortunately, the FDIC is spending beyond its means and is not willing to raise its charges on the banks.

This article outlines the issue and options.

At some point, borrowed money has to be paid back. It represents real assets, real resources. We ignore this at our peril. Our increasing dependence on debt gives us a choice. We can become dramatically less wealthy and preserve our honor, or become a third world, deadbeat nation.

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