Monday, I did a post called “Bank Ratings Keep Slipping Away.”My colleague across the pond, Max Keiser, sent me an email with his thoughts on the post. Max is a former Wall Street broker turned financial journalist. He does a couple of different financial TV and radio shows in Europe. He also has his own website called MaxKeiser.com. Max is smart, connected and sometimes very abrasive, and those are all the reasons why I like him. Part of our email exchange is below:
The campaign to move money to small, community banks seems problematic for a couple of reasons;
a) As you point out here, their ratings are slipping
b) There has been a long history of small banks getting bought out by big banks, so moving your funds from Citi to Community Bank and then have Citi buy that bank is pointless
c) Simply moving money around does not address the core problems of the systemic corruption that plagues US markets and finance. In my opinion, if the intent is to ‘kill the beast’ than individuals should be joining governments and hedge funds and buying Gold Bullion.
Good to hear from you. I am not talking about the “Move Your Money” campaign put out by Arianna Huffington. That is stupid. If you move your money, you should move it to a secure bank. The reason? No one knows how bad the bank failures will get, and the FDIC just might get swamped!! Depositors in that scenario could lose access to their money for longer than they would like. What happens if the depositors are forced to put money into a 2 year Treasury? Who knows how bad this will get, but it will be bad. (There have been and will continue to be massive bailouts and spending.) So, in the end, the U.S. will experience some sort of currency crisis. There is going to be a loss in the value of the dollar by 50 percent or more. Economists I talk with regularly say there is also a high likelihood of some sort of extreme inflation or hyperinflation event. But in the meantime, check your bank and keep it (your money) in safe solvent institutions. For the little guy, gold and silver bullion would be a great hedge against calamity and inflation. Someday, we will look back on this time of $1100 an ounce gold and say,”Wow if I had only bought gold and silver! It was so cheap!…”
In late November, I was on one of his shows, “On the Edge With Max Keiser,” talking about USAWatchdog, the Fed and the huge debt in the economy. You may check out my appearance in the video below:
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Greg is the producer and creator of USAWatchdog.com. The site’s slogan is “analyzing the news to give you a clear picture of what’s really going on.” The site will keep an eye on the government, your financial interests and cut through the media spin. USAWatchdog.com is neither Democrat nor Republican, Liberal or Conservative. Before creating and producing the site, Greg spent nearly 9 years as a network and investigative correspondent. He worked for ABC News and Good Morning America for nearly 6 years. Most recently, Greg worked for CNN for shows such as Paula Zahn Now, American Morning and various CNN business shows.