This news report is provided courtesy of Greyson Deitrich III of Independence News LLC.
FDIC Chair Sheila Bair is a recognized non partisan. Appointed to financial oversight positions by both President Bush and President Obama, her outspokenness cuts both ways. Last week in testimony before the Financial Crisis Inquiry Commission, Ms. Bair lit up the room by blaming the credit crisis, and a potential currency crisis on the banking regulatory systems supported by Sen. Chris Dodd and Rep. Barney Frank. Ms. Bair continued by saying the regulations have created a “Shadow Banking†system outside the reach of federal authorities. Bair blamed the Financial Institution Reform, Recovery, Enforcement Act (FIRREA) as well as Federal Deposit Insurance Corporation Improvement Act (FDICIA) of layering “unnecessary burdens†on traditional banks while leaving large opportunities to develop financial institutions outside the law.
In reporting completed by CNBC, The New York Times, and Independence News, The FDIC admits to over 500 banks currently on the imminent failure list. The unofficial number is closer to 2000.Â
Bair has teamed with Fed Chairman Ben Bernanke in a desperate attempt to stave off 1.5 million commercial and residential foreclosures, which will topple the failing FDIC system. “Using FDIC funding for system wide support will ultimately re-create the credit crisis.†“We do not have the ability to cover the losses of all FDIC endangered banks†an FDIC representative was quoted.Â
This clearly will bring on an economic “Kobayashi Maruâ€, as the Fed will have to choose among A) borrowing trillions to cover the losses, B) quantitatively ease the problem (print money), or C) just default. Bair has repeatedly warned of this failure extending all the way back to her economic advisory position with Sen. Robert Dole (Ret.)
Sources at the FDIC say unless there is a “holistic approach†to banking regulation – unlikely since the system is designed to benefit a few “Too Big To Fail†institutions, systemic banking losses should be felt in the next “6 to 10 months†with the real crisis arriving just in time for the November elections. Should be quite a show…
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Day-um.
I’ll only add this regarding the “stave off” of residential foreclosures…
I am currently negotiating with my bank (one of the TBTF)…long story, but I’ll summarize the key point like this: granted, I am “playing the game” with them, but they do not  seem to be in a huge hurry to get me out.
The disaster I see coming as an inevitable and logical result of political failures, corruption, and distortions of the free market could is not a product of a paranoid “survivalist-type”, but a logical conclusion.Â
The depression of the ’30s was exacerbated with Hoover’s interventionist policies (mises.org has a great article on this). Yet the historical record blames Hoover and ‘Laissez faire” policies. Any serious research shows this to be hogwash. Under Hoover the government began a policy of credit expansion, job “creation”, propping up businesses, etc. FDR only kept it going. We are doing the exact same things! Is there a remedy when we are drowning in debt? The Great Depression was remedied by WW 2. Take what you will from that.
I always hear people who want to sound wise say “Those who fail to remember the past are doomed to repeat it”. Yet here we are, repeating it. Again. We always do.Â
I have six children under 12., and I live in Alaska. I pray that we are all wrong about the S hitting TF soon. As much as we can prepare, it will be tough. I don’t want to be right, I take no perverse pleasure in looking at TEOTWAWKI, but I believe it is a matter of logic at this point.
Thanks for listening.
As a father and husband, I have to act on what I see coming down the trail. Not to would be immoral.
Hey Rick, after mega losses in other real estate investments I, and thousands more are playing out that same scenario. They are in no hurry. Time will create options…. Good luck, prep, and pray….
Justin: good for you !  I  lived in Anchorage for 23 years but moved to Arizona 4 years ago . I too hope and pray we are wrong but too many good people are saying its going to happen …and sooner rather than later .  I have a feeling of dread and I cannot shake it . every day more and more people are becomming “Preppers” Good luck in your efforts to get ready !!
Yo Justin ~
Not much that us regular folks can do to influence this situation one way or the other. About the best that we can do is to try to prepare ourselves and our families as best we can. The government has been printing money 24/7 for quite some time now. You can only do this, quantative easing, for so long before the currency loses all value and the whole ‘house-of-cards’Â comes falling down around us. God Bless and good luck to you and your family.