Sobering article from The American Dream website. No author, no date, but probably published on June 6 or 7, 2010. Below are excerpts.
U.S. banks are being shut down by federal regulators at a staggering pace this year, and yet most Americans seem completely oblivious to it. In fact, federal officials have already shut down 81 U.S. banks this year, which is about double the number that were shut down at this time last year. So why aren’t more people upset about this? Well, part of the reason is because the FDIC is doing it very, very quietly. The bank closings for each week are announced every Friday, which means that they pass through the news cycle over the weekend almost unnoticed….
Shouldn’t the fact that we are experiencing a banking system collapse be headline news? But most Americans are more than happy to remain blissfully ignorant of what is going on. In fact, most Americans seem far more interested in what is happening on American Idol or Dancing With The Stars….
So just how bad is the banking system crisis? Well, FDIC Chairman Sheila Bair says that 775 banks (approximately 10% of all banks in the United States) are now on the Federal Deposit Insurance Corporation’s list of “problem” banks. So should we be alarmed by that?
- Well, there were only 252 U.S. banks on the FDIC’s problem list at the end of 2008.
- There were 702 U.S. banks on the FDIC’s problem list at the end of 2009.
- Now there are 775.
…But even if all of our banks fail the FDIC has plenty of money to cover our federally-insured banking accounts, don’t they? Unfortunately, they do not.
The FDIC is backing nearly 8,000 U.S. banks that have a total of $13 trillion in assets with a deposit insurance fund that is pretty close to flat broke. It was recently reported that the FDIC’s deposit insurance fund now has negative 20.7 billion dollars in it, which actually represents a slight improvement from the end of 2009. But the bank failures on Friday drained another $313.6 million from the FDIC’s deposit-insurance fund.
And the way things are trending, the banking crisis could get a whole lot worse. Why? Well, Americans are simply not doing a very good job of paying their bills.
During the first quarter of 2010, the total number of loans at U.S. banks that were at least three months past due increased for the 16th consecutive quarter. 16 quarters in a row….
Oh, but the U.S. government will never let the entire banking system fail, right? …The reality is that the U.S. government is now over 13 trillion dollars in debt.
To give you an idea of just how horrific that is, if you started spending a million dollars a day on the day that Christ was born, you still would not have spent a trillion dollars by now. That is how big a trillion is. But for this year alone it is being projected that the U.S. government will have a budget deficit of approximately 1.6 trillion dollars.
…we are facing a financial nightmare.