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Fast Start to Financial Safety
Learn how to protect your wealth.
By Bob Stokes
Wed, 25 Jan 2012 16:15:00 ET
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You earned it; you had the discipline to save it; obviously you want to protect your wealth.
 
That's all the more true if you believe the worst of the economic downturn is still ahead.
 
You know about Europe's sovereign debt crisis and contagion risk, America's credit downgrade by Standard & Poor's, the growing crisis in state and city budgets, the still-declining real estate market, and the questionable financial health of many banks.
 
But did you know the Federal Deposit Insurance Corporation (FDIC) only has enough funds to cover a small fraction of bank deposits -- in the event of widespread bank failures?
 
Please read this excerpt from the September Elliott Wave Theorist:
 
The specter of a banking panic has become far darker since the collateral for bank deposits—land and buildings—has fallen globally in value at the steepest rate since the Great Depression. One day this shortfall in collateral value will impress itself on people’s minds, and there will be an unprecedented run on banks around the globe as panicked depositors try to become the first ones out the door. Banks are designed so that the first depositors to withdraw get 100%; the losers wait in a long, slow line to split the proceeds that come from selling the deeds. Yes, I know about the FDIC, but I don’t believe it will be able to fulfill its promises when most banks go bust.
 
Here's more about the FDIC from the second edition of the New York Times bestseller Conquer the Crash (p. 177):
 
Federal Deposit Insurance Corporation guarantees to refund depositors’ losses up to [$250,000], which seems to make safety a moot point. Actually, this guarantee just makes things far worse, for two reasons. First, it removes a major motivation for banks to be conservative with your money. Depositors feel safe, so who cares what’s going on behind closed doors? Second, did you know that most of the FDIC's money comes from other banks? This funding scheme makes prudent banks pay to save the imprudent ones, imparting weak banks’ frailty to the strong ones. When the FDIC rescues weak banks by charging healthier ones higher 'premiums,' overall bank deposits are depleted, causing the net loan-to-deposit ratio to rise. This result, in turn, means that in times of bank stress, it will take a progressively smaller percentage of depositors to cause unmanageable bank runs. If banks collapse in great enough quantity, the FDIC will be unable to rescue them all...
 
So where can you keep your wealth safe?
 
The 200-page manual called Wealth Preservation in Very High-Risk Financial Times offers a fast way to learn about financial safety. This must-read publication is from the financial experts at the SafeWealth Group, whose reason-for-being is to provide you with financial peace of mind.
 
Our friends at the SafeWealth Group enjoy exclusive relationships with some of the safest institutions in the world. 

Tags: banks, economic depression, Federal Deposit Insurance Corporation (FDIC), investment decisions, risk management
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