The current banking crisis in the United States has shaken the roots of its economy. A major level of distrust has been formed encircling the banks of the country. The present insurance system for banks in the US only guaranteed deposits of up to $250,000 by the FDIC. Therefore, when things went sideways with Silvergate and Silicon Valley Bank, customers and many well-known personalities started to ask the US to guarantee bank deposits worth $18 trillion.
The US still doesn’t know to guarantee all bank deposits
US banking crisis is expected to grow worse from here, and the former Coinbase CTO Balaji Srinivasan has even projected that this will push Bitcoin’s price above $1 million in the next 90 days. This is the reason that the mid-size bank coalition of America has called for the FDIC insurance cap to be removed for the next 2 years. How could this stop the crisis? Well, for one, FDIC assures customers that if anything goes wrong, their money is safe. This will prevent them from withdrawing funds from smaller banks just to look for safer alternatives.
So, in general, smaller banks won’t get run down because they do not have enough customers or funds. However, the real question is whether the FDIC has the capability to insure $18 trillion in deposits. I am not an expert, but considering the current economic condition, I do not think so.
At the same time, there is a chance that this move might not even be considered because US authorities think it’s too drastic. Reports from Bloomberg suggest that authorities believe that the current steps taken by financial regulators are enough. This is a move they might consider if things get worse. For now, after the collapse of the Silvergate and Silicon Valley Bank, they have started a $25 billion bank term funding program.
What should you do?
Trusting the authorities to keep financial stability when they printed trillions during COVID-19 and were unable to keep inflation in check would not be very wise. Taking the situation into our own hands is the best course of action here. If you have a lot of money in banks, then the best course of action would be to invest it in precious metals like Gold and Silver or buy Bitcoin. This is not financial advice but something I believe in. I am pretty sure that the FDIC would not be able to do anything if everyone starts to withdraw their funds and the banks do not have the funds to process it.
What are your thoughts as the US is figuring out how to guarantee bank deposits worth $18 trillion? And do you think an economic collapse is right around the corner? Let us know in the comments below. And if you found our content informative, share it with your family and friends.
Also Read: FTX’s inner circle swindled $3.2B in payments and loans.