Comments on: Why I Closed my Money Market Account: 6 New Bank Failures in 4 States

By: Patrick P.

Patrick P. — Tue, 08 Dec 2009 00:36:14 +0000

Government deposit insurance for banks is an extreme moral hazard. Taxpayer money should never be used to cover for failed business relationships, regardless of industry. Deposit insurance combined with fractional reserve lending strongly encourages individual depositors to not care about their bank’s financial condition, while simultaneously inducing banks to seek the riskiest investments in order to offer the highest rates on CDs (for example). Such a system is perverted and completely backward. It also enables fiat currency growth on an enormous and global scale. An ideal, austro-libertarian monetary system cannot coexist with government deposit insurance, regardless of whether you want a 100% reserve or free-banking FRB foundation.

By: Jeff

Jeff — Mon, 07 Dec 2009 05:38:57 +0000

Without FDIC I don’t think there would be much banking going on period. Just like the stock market they would only put in what they could afford to lose, even better because you can’t deposit on margin. But without FDIC and the defacto death of banking in the USA there wouldn’t be huge financial institutions to give megabucks to the politicians, so it’s a non starter.

By: John Smith

John Smith — Sun, 06 Dec 2009 21:13:52 +0000

If we did not have the FDIC people might care a bit more where they put their money and we would never have had the crazy speculation over the last 10 years.