FDIC by another name

In my wildest dreams, as I am sure may of us have had at one point or another, was an image of me vacationing in the most exotic of places living up the big life from my fat bank account swelled by the winnings of the lotto. Ahh, the life of sipping pina coladas by the calm ocean side as I listen to the ramblings of my overly large-breasted cohort.

And I have to admit that, from time to time, these visions of doing nothing other than enjoying my winnings have kept me up at night trying to figure out what, in fact, that money would buy me.

After dwelling upon this luxurious lifestyle for more than a mere second or two, I would inevitably picture what would happen if these funds were to dry up. But then the thought of keeping smaller nest eggs of 100,000 planted in various bank accounts throughout the country came to mind, and the fear simply faded. A restful happy slumber would come soon after.

Of course, try as hard as one might to pick the lucky numbers each week, I have yet to hit the jackpot. As for me, not being a gambler at all, my odds are probably worse than most. One must play the game so to speak. But while I pay my respects at the gas pump, there is always that inner temptation and the seemingly endless wait to pay the cashier behind the long lines of other patrons whenever the Megabucks kitty sits at over 200 million or so.

Unlike other dreams and thoughts, striking it rich by dropping a dollar or two once a week, certainly isn't unique. And neither is the notion of diversification. After all, logic backed up by that special sticker on my bank tellers window tells me, and most everyone else, that's the smart way to go.

How hard it must have been to live in the days of the Great Depression without the assurance of the Federal Deposit Insurance Corporation backing up my deposits. As hard as I try to imagine, sleeping on top of my cash-hoarded nest egg just doesn't materialize. I mean, how much space does someone really need to have in order to protect 200 million? Possibly a Dick Cheney sized vault?

Surely, it has to be virtually impossible to protect your cash money when it sits somewhere hidden just out of sight in your own home. Especially, if you like to have guests, or plan on raising a family. I mean, what would happen if there was a fire, or for that matter, almost any natural disaster. Poof! There would be nothing left. Frightening thought.

But sadly, that is just what seems to be happening in the markets today, and there is the very real possibility that own our self-made financial disaster could lead to the possibility that the FDIC will not only be unable to protect us, but actually contribute to the problem itself.

All this talk about a vast storehouse of money stashed away by the Fed in case of rainy days like this, intended for the sole purpose of helping the American taxpayer out in times of need is just that. Talk.

Since its inception, banks have been contributing funds to the FDIC by charging us various fees. What contributions are made by an individual bank is calculated via a ratings system determined by the Fed that ranks each insured member based upon the likelihood of failure. And just like credit for you and me, the more risky the customer the higher the fee.

Now, you might think that hoard of money has got to be pretty big by now right? Well, not so fast. Turns out this money doesn't just go to some huge vault hidden underneath a mountain somewhere at all. And there isn't even a lock box, so to speak. For all this time, these small fees you and I have been paying, go directly to the Fed who in turn can decide to spend them as they please. Whatever amount the FDIC says they have on hand, well, it isn't really on hand at all. Most of it has already been spent on various other things anyway.

Bridge to nowhere anyone?

What is worse is that these small fees change as the conditions do. So as an insured bank begins to hit rough water, their fees increase as well. Of course, this all gets passed on to their customers who may or may not decide to shift their deposits somewhere else. It's a sort of self fulfilling prophecy. One that seems to be materializing right in front of us now.

Have your banks fees been rising of late? Well, now you know why. Want to know where your money is going? Not to some fortress of economic resurrection that is for sure.

So now there is talk that the FDIC is running out of cash because they have been using it to bailout so many of its members of late. The talk is that when the time comes, the FDIC will have to raise its rates even higher and possibly borrow additional money from the Fed.

Either way, these options are nothing more than additional taxation sifted through various government mechanisms to cloud our understanding of the truth.

And this can't be anything other than the notion of putting lipstick on a pig, could it?

How proud we must all be to know there is a nice sticker, and the fine-tuned words of officials assuring us we will all be protected in times of need!