FDIC may be Bankrupt this year!

No, it is not a joke.

As stated in "Bair Says Insurance Fund Could Be Insolvent This Year," Federal Deposit Insurance Corp. Chairman Sheila Bair said the fund it uses to protect customer deposits at U.S. banks could dry up amid a surge in bank failures.

“A large number” of bank failures may occur through 2010 because of “rapidly deteriorating economic conditions,” Bair said in the letter.

The deposit insurance fund won’t dry up because the government can get funds from the industry and congressional appropriations, and borrow from the Treasury, Chip MacDonald, a partner specializing in financial services at law firm Jones Day, said today in a telephone interview. “As a depositor, I am not worried in the least,” MacDonald said. “No one is going to let the FDIC go without any money.”

As stated in "Geithner Warns of Deeper Slump, Seeking Backing for Bank Rescue," Treasury Secretary Timothy Geithner warned the U.S. recession is worsening. The strength of an economic recovery hinges on the government’s ability to supply financial companies with fresh capital to get credit flowing again, the Treasury chief indicated.

“The first really important thing we do is to make sure that banks have the resources they need to be able to provide credit to the economy,” Geithner said at the Senate Finance Committee hearing yesterday.

Where do we get fresh capital from? Why credit? Credit is imaginary money! That's what got us in trouble in the first place!!! Printing new money will not solve the problem, it will only devalue the money we already have!

But what they fail to see is even though the banks accounts are insured to $250,000, what good is $250,000 of devalued currency? You might as well have 250,000 boxes of Kleenex. If you don't believe that can happen, just remember the Mexican Peso.

Can the US become fall this low? Remember Obama's mantra "Yes we can!" After all, the Dow Jones has fallen over 20% since he has taken office.