I saw a crazy video that I absolutely had to share with you guys and give you the real background information on because your money and the banks might be snatched up.
Why are people trying to get their money out of the banks?
Should you pull your money out of the banks?
Will you even have that option at one point?
Because they've been talking about digital dollars and negative interest rates and a whole bunch of crazy gas, clouds, and smoke.
Welcome back I am here to teach you all the things you should have learned in school about money but for whatever reason, they forgot to mention it.
Please be sure to subscribe because we talked about everything from personal finance to the best thing to the economy and I get right into it so please watch this clip from the FDIC chairman.
If you don't know what the FDIC is it's basically the people who ensure your money in the bank.
So up to $250,000 is protected as long as you are in the FDIC insured bank.
I don't know about you guys but someone's telling me with Suites off freezing in the background what to do and what not to do. it makes me want to do the exact opposite of what they're saying so she's trying to tell us.
Listen don't trust yourself don't trust your house your buddies there keep it with us we've never lost a penny and then I'm like okay so you made a video to tell me to trust you not pull my money out because I can't dress.
The fact that you have to come on here to tell me to keep my money in the bank makes me want to do that deeper dive. So let me share with you what I've been finding whether we are in a recession which I talked to you about our decision.
Basically, nothing really happens to you. Nothing really affects you. What happens is it just kind of gets transferred to a different entity but when there are no buyers the bank fails and then the FDIC has to come in and give you your money back and anything you had in the bank that was above $250,000 you had to figure out what the bank it's above them.
Now let's go over the FDIC finances so it's in the US economy we have over $14 trillion of deposits in these FDIC insured banks of the $14 trillion only 8.7 is actually protected by the FDIC because like I told you there's a $250 cap.
They basically are saying all this $8.7 trillion if these banks fail we will be giving you your money back so no need to worry and we've never lost a penny, okay come with me let's take a look at their finance me so I'm gonna count it so quite naturally I get a little bit nerdy but here is their balance sheet and you can see their assets.
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| Source: FDIC Annual Report |
They only have $111 billion of assets in total let that sinks in. You're telling me that you are insuring eight point seven trillion dollars worth of money but you only have a hundred and eleven billion dollars of assets.
Where's my calculator I literally can't make any sense of that they actually only have adjusted above what percent of the money that they claim that they can pay up that sounds problematic to me and that's being conservative because as you can see some of this includes fixed assets so in order for them to get you your money they're gonna go ahead and sell their buildings so their computers no they're not doing that.
So even if they were to do that mean that only makes up 1% of the people what about the other 99% of people who want their money.
So let's give in a different way let's just say this let's say they were like okay you know what all these things are failing here's what we're gonna do we're gonna just sell all of our assets get the cash and then give everybody something equally.
Well if I take their assets divided by the US workforce which is how many people are actually working in America that would be about $699 per person not gonna watch you but if I got $699 I would be I'd be fighting.
What Happens When You Pull Your Money Out of the Bank
Also what happens when you pull your money out of the bank is the banks don't have that money to lend out anymore. If you didn't know when you put your money in the bank you are giving your money to the bank.
They will take your money and they will give it to somebody else as an investment, they'll give it out as a loan as a credit card. I mean your money doesn't actually sit in the bank.
At one point you're like last week at least 10% ago and you have to be in there but the Federal Reserve said: "it's okay we need to keep any reserves for these people just go ahead and loan the money out". So if you pull your money out it's less money they have to actually give out.
They don't want you to pull your money out because they want to keep this going let's keep on giving people loans given people houses and other we have no reserve requirements we can just loan your money over and over and over again.
If you pull money out of the bank that ruins the Ponzi scheme. When you pull your money out you also protect yourself from bail in the laws.
We all know what bailouts are but if you didn't know there are built-in laws which means if you have your money in a bank that is failing and nobody wants to buy that bank up.
They are legally allowed to do is say hmm this customer has $10,000 in the bank. We go ahead and take that we need that and in exchange, they don't worry we're gonna give you something you can't just take it.
There are eminent domain laws you can't just take people's property. So we're gonna give you some shares in our company but why the hell would you want shares in a company that is failing you're giving me $10,000 worth of shares in a failing company.
If I try to go sell it to make my money who's gonna buy that if the biggest failing why would anybody want to buy the stock of a failing thing it's mad but you unknowingly agreed to this okay.
So this can happen obviously I don't think this is something that would happen tomorrow but if it did happen you're screwed any of them think about what's going on right now is crazy people are not able to pay their mortgages. There are big companies letting you know that they will not be paying their rent for 4 months because of what's going on.
What does that mean for the banks?
That means that they are not getting as much money as they used to get and they will have some sort of liquidity crunch it's only a matter of time so people want to pull their money out because they want to protect themselves from the bail-in clauses, they want to protect themselves from not getting all their money insured by the FDIC.
Obviously, you guys might be thinking well everybody's not gonna fail at the same time but even if 1% failed. They wouldn't be they would barely be able to cover it.
The only house 1% of the assets and they're gonna try to do whatever they can to make sure you keep your money in there. You might have the government come in and say don't worry we will ensure your losses as well, don't pull your money out because they want to keep this going.
Digital Dollars
What does this have to do with negative interest rates and digital dollars right cuz I didn't talk about that there is currently only $1.75 trillion of actual physical cash in the world. If you do the math that ends up being about four thousand dollars per person and that's being conservative because remember we are not the only country that uses our money.
There are so many other countries that also use our money so our dollars are also in those other countries. Who knows what the real number is so basically we pretty much are already in a digital system okay the majority the vast majority of our money is already digital so it won't be so hard to just kind of pluck out that last one 75 trillion and how could they do that.
Well with a digital dollar and if we have digital money I might have to move up the country if we ever enter a digital dollar system. It can't be forced on us they have to make it seem like if we know we want they would probably do something like make it and make it a little more challenging for you to use cash or make it a little bit more expensive for you to use cash.
So eventually you will stop using cash or just using a card they do with these little stimulus packages they can say we're gonna give it to you digitally we're gonna have a digital wallet and you can have your cash this way.
They're kind of already going to you know get you warmed to the idea of using everything digital and if we go completely digital they will be able to track every single dollar you use. You know from my street pharmacist out there they can tax us easily and instantly and just open your business.
I mean you don't think it'd be doing anything illegal but it's like I don't really want everybody to know where I'm spending every single dollar and in general they just have greater control over what they can do with the money because right now we still have an escape goal.
If they start having these crazy interest rates we can just pull her money out we don't have to participate in the bank system but if we have a digital currency if they want negative interest rates going. We have it and you can't do anything about it because there is no cash option
Negative interest rates are when you are paying the bank to keep your money right now we have interest rates at most large banks at like 0.01% which is completely ridiculous but at least it's positive at least nominally it's positive right negative interest rates would turn that 0.01 to -1 -2.
Basically hanging them to have them take your money and then to somebody else and this is not unusual it has happened already across the world Japan has negative interest rates and what ends up happening is people pull their money out and keep it in their house say hi to Nuna mattress.
When you have digital money there is no more hi baby so if they want it to be negative interest rates and they will make it a negative interest rate so to a certain extent they've already been having some practice in the world.
They tried just cutting people off from the dollar all together into that in India and it didn't go. Well they have negative interest rates in Japan and but putting their money out we already see resistance and they're gonna just kind of fine-tune it to make it better.
Will we have a Digital Dollar?
If you wanna pull money out of the bank you know it's obviously your decision from my point of view it doesn't hurt worst case you have some cash and if you want to put it back in the bank you can absolutely do so.
This is not something I think will happen immediately. I just like giving you guys information sharing my thoughts on it and keeping you informed and if this story develops.
I'll develop an article all right that will do it if you like this then please share this article with your friends spread the word talk to me in the comments let me know what you think about a digital dollar.
Note:
*Please be sure to do your own due diligence before making ANY financial decisions. On my website I share with you my research but please verify everything for yourself! I do not give investment advice, just share my thoughts and my choices!*
