Bank United Collapses

Bank United Collapses - FDIC “Insurance” Getting Wiped Out

Last month I described the collapse of the American banking system as “Off a Cliff with No Airbags.” Are we already in mid-air?

by Jake Towne, the Champion of the Constitution

Originally published on Thursday, May 21, 2009 at http://www.nolanchart.com/article6448.html

Today BankUnited FSB became the nation’s 34th bank to fail this year. Bank failures are nothing new, but this one will cost the FDIC $4.9 Billion per the FDIC press release issued Thursday, May 21. BankUnited had assets of $12.8 Billion and deposits of $8.6 Billion.

The takeover group is led by the infamous Carlyle and Blackstone investment groups. The take-away for the average Joe Public - is this:

The FDIC started 2008 with $53 Billion in its insurance fund, and this number is now less than $11 Billion. This translates to mean that less than a quarter of every $100 you have in a bank account is now FDIC “insured.”

It does not take a genius to predict that the FDIC insurance fund will be depleted this year, and a public bank closing (or “bank holiday” - as if it were some sort of twisted vacation) is likely this year. (Photo courtesy Luc Viator)

As a reminder, the press often compares the Obama administration to FDR. FDR closed the nation’s banks in 1933 when he also outlawed gold. Immediately after, the dollar was devalued by 67%.

Speaking of gold, the gold price shot up to $950/oz after reaching a minimum of $865/oz in mid-April. Holders of gold will win the Gold War that is currently playing out in the world’s smallest major market of roughly $25 Trillion in 2008. Please try these recent articles I wrote:

• Gold and the “Average Man”
• Ron Paul’s rEVOLution Versus the “One Ring” of the Federal Reserve
• The Gold War - China and the US Treasury Market
• Silver and Gold ARE Money (PART 1/2)
• Bernanke’s Great Lie - The “Gold Standard” and the Great Depression (PART 2/2)

What to do? I do not wish to repeat myself, so take a look at the advice I offered last month in “Off a Cliff with No Airbags: The FED Banking System Quivers in Fright“.

In Liberty,

Jake Towne, the Champion of the Constitution