More than 130 banks will have failed by the end of 2009. Is Your Bank Safe?

By Gary Grimes

Please understand that this article is about more than safeguarding your money; it's about saving you headache and heartache. It's about giving you peace of mind.

Before I explain, please allow me to ask a few questions:


* Have you given much thought about the money in your banking accounts lately? Do you know if it's safe?
* Have you thought about what might happen if your bank fails?
* Did you know you could be left in the lurch for days, weeks, even months before you get your money back from the FDIC?
* What happens if the FDIC can't cover your funds?
* How do you find a safe bank to protect your deposits right now?

I hope you've given these questions some serious thought.

I have to be honest: These questions were about the farthest things from my mind until about a year ago, when I downloaded the free "Safe Banks" report from my colleagues at Elliott Wave International. At first, the report scared me: I thought, "Oh My Gosh! I could lose all of my money if my bank fails. What would I do?"

But as I read on, I figured out that the report was not only about making my money safe; it was about giving me peace of mind.

If you've read any of the following news items, perhaps you understand the fear of learning your money might not be safe. Here's a recent story from Bloomberg:

Sept. 24 (Bloomberg) -- In May, the FDIC said it was projecting $70 billion of losses during the next five years due to bank failures. The agency said it expects most of those collapses to occur in 2009 and 2010.

The FDIC’s problem is that it didn’t collect enough revenue over the years to cover today’s losses. The blame lies partly with Congress. Until the law was changed in 2006, the FDIC was barred from charging premiums to banks that it classified as well-capitalized and well-managed. Consequently, the vast majority of banks weren’t paying anything for deposit insurance.

Of course, we now know it means nothing when the FDIC or any other regulator labels a bank “well-capitalized.” Most banks that failed during this crisis were considered well-capitalized just before their failure.

By the end of 2009, more than 130 banks will have failed. Most depositors will have little clue their bank was even at risk. Worse yet, the string-pullers in Washington are doing everything in their power to hide information about the safety of your bank from you.

So far, the FDIC has had enough money to cover insured depositors. But that money is quickly running out.

Just last week, the FDIC voted to mandate early payment of insurance premiums to help cover at-risk banks. But only time will tell if this move will provide the funds needed in the years ahead. Here's what the Associated Press reported on Thursday, Nov. 12:

WASHINGTON (AP) -- U.S. banks will prepay about $45 billion in premiums to replenish a federal deposit insurance fund now in the red, under a plan adopted Thursday by federal regulators.

The Federal Deposit Insurance Corp. board voted to mandate the early payments of premiums for 2010 through 2012. Amid the struggling economy and rising loan defaults, 120 banks have failed so far this year, costing the insurance fund more than $28 billion.

Worse yet, three more banks failed the very next day, Friday, Nov. 13.

This is a very real problem and a direct threat to your money. It's more important now than ever to personally ensure the safety of your bank. The free 10-page "Safe Banks" report can help. It includes the very latest bank safety ratings from the third quarter of 2009 to help you prepare for what's still to come this year and next.

Inside the revealing free report, you'll discover:

* The 100 Safest U.S. Banks (2 for each state)
* Where your money goes after you make a deposit
* How your fractional-reserve bank works
* What risks you might be taking by relying on the FDIC's guarantee

Please protect your money. Download the free 10-page "Safe Banks" report now.

Learn more about the "Safe Banks" report, and download it for free here.

Gary Grimes focuses on mass psychology, U.S. stocks and the U.S. economy. Gary has a bachelor’s degree in journalism from Auburn University in Auburn, AL, where he was first turned on to the Austrian School of economics by way of the world-famous Mises Institute. His study of classical liberalism eventually led him to discover the Elliott Wave Principle and Robert Prechter’s theory of socionomics.

If Stocks Tank, Shouldn't Gold Soar?

The following article is provided courtesy of Elliott Wave International (EWI). For more insights that challenge conventional financial wisdom, download EWI’s free 118-page Independent Investor eBook.

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Large banks and more recently pension funds have suddenly become infatuated with gold. They chant the mantras that gold bugs have known for years: gold is a store of value; owning gold is financial insurance; an ounce of gold will always buy a good suit. The idea is that if the economy continues to weaken and share prices decline, a strategic allocation of the precious metal will hedge and offset some of the losses in the financial sector.

On the surface it seems to make sense and it’s hard to argue with the logic. Even so, logic can sometimes get twisted, whereas facts cannot. The evidence is found in the chart we describe as “All the Same Market.” Gold, stocks, currencies (versus the dollar), oil, grains, meats, softs, all decline in a deflationary environment. As liquidity dries up and credit contracts, people, businesses, and institutions sell everything to get dollars. Cash is once again king. This is bearish for gold.

Looked at another way: as the dollar advances from its lows, things denominated in dollars lose value against the dollar. As long as the dollar remains the global senior currency, assets will depreciate: not just stocks and commodities but residential and commercial property, works of art, collectible cars, pretty much everything. Of course, this outlook presumes a deflationary environment and that’s been our view for quite some time. But that’s another conversation. The topic here is stocks down/gold up - or not.

The long-time editor of the Elliott Wave Financial Forecast Short Term Update, Steven Hochberg summed it up succinctly in a recent issue:

“The other important aspect to a dollar bottom is the implication to all the other markets that have been moving opposite to this senior currency. The start of a major dollar rally should roughly coincide with a turn down in stocks, commodities, oil and the precious metals. So there are likely to be important trend reversals across nearly all major markets.”

Don’t fall into the trap of group-think. If investing was that easy we’d all have (insert your own private fantasy).

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For more information, download Robert Prechter’s free Independent Investor eBook. The 118-page resource teaches investors to think independently by challenging conventional financial market assumptions.