The FDIC has long been viewed as the thing that made banks safe again following the last global depression.  During the Great Depression of the United States, if a bank went bust, depositors lost everything.

Today, when a bank goes bust, the FDIC steps in, assumes control of the bank, provides insurance for a portion of the deposit up to $250,000 through December of 2009, (then the insurance rate drops down to $100,000), and works to transfer assets (such as outstanding mortgages and loans) to a different bank.

“…unfortunately, we’re going to have to charge more for it," Federal Deposit Insurance Corp (FDIC) Chairman Sheila Bair told reporters on Thursday

FDIC likely to double fees charged to banks – WSJ | Deals | Regulatory News | Reuters

In general people tend to think that the US Federal government is so rich with cash, that it can afford to do anything.  They feel that it can save any failed bank, or any failed industry, or any failed country.  Iraq, Katrina, and the banking sector have rapidly taught all of us how false that assumption really is!

The US government is now having to seize financial control of banks like Citigroup, raise rates for all banks, and raise taxes for the first wave of Americans to fund the trillions of dollars that are being spent each month.  This comes just a few days after China told Secretary of State Hillary Clinton that they too could not loan the US money indefinitely.

How to Survive the Global Depression When Banks Are Not Safe

It does not take a Wall Street banker to figure out that if banks are not safe, if the US Government can not pay the bill, if there is no bottom in the market, then people have to find an alternative way to protect their future income and their wealth.  (Wealth is by far the most difficult thing to protect during a time of economic turmoil.)

But wealth alone can not keep you alive.  You have to employ that wealth and put it to work to either earn more money, sustain its current level, or at least keep you and your family under a roof, eating food, and staying safe and warm.

So start thinking about how you can diversify your money.  Consider stopping direct deposit payments, or at least gathering up the forms to stop it someday.

If your company requires Direct Deposit, then set up multiple allotments that will send smaller batches of money to multiple different banks.  The FDIC might not be able to protect all banks some day, so you will need to spread your eggs around.

The obvious answer is to pull some of that money out in the form of cash.  True its difficult to manage paying your bills when you have scattered accounts.  However, you need to consider whether or not, now is the time to pay yourself first, and wait to pay other bills when there looks like there will be a future where paying bills will be an important thing to do.

It is all to easy to get caught in a debate over the causes of the current global depression instead of doing something to fix the economy or even protect yourself and your family so that you can survive the recession, and the perils to surface next.

Years ago I served in the Army. One of the first lessons that I learned in the Army is that there are people that talk about how to do something and there are people that DO something.

The people that do things and avoid talking about things too much are the ones that thrive and survive. The ones that talk about things are bureaucrats and usually cause more harm than good.

The world is rapidly falling into a global depression. When this site was started, that was not a fact and more of a speculation on the future. Now, there are few people that would argue to the contrary.

Unfortunately, the people that used to throw up walls about the reality of what was happening to the global economy are now all to quick to stand there and do nothing. They choose to belabor the question of “How did we get into this mess?”

Well the answer is that it doesn’t really matter too much. We are here and the situation is so dire that there is not time to stand around debating it. If you must debate it at all, then plug your ear into a ear bud on a cell phone and work while you complain and debate.

This is no time for anyone to sit still, sit at home, or mill around without a purpose. If you have a job, make sure you are spending your spare time tightening up your home, your apartment, your car, your possessions. Stock up on food, on batteries, on necessities. If you do not have a job, spend time finding a job, but do not neglect to make some money while you are doing it.

Think that President Obama or the US government is going to solve your problems for you?  Consider that the smartest people in the world just reviewed his plans over the last few weeks and no one thinks those plans are good nor sufficient. 

Need more proof? Here’s a simple number.  The US government has given or promised almost $3 trillion dollars to Wall Street.  This was for the mortgage melt down.  This week President Obama rolled out his BIG plan to bail out people with problems with their mortgage or home value.  It was $75 billion.  That’s $8k for the 9 million people that Obama thinks have financial problems with their mortgage.  That number is so pitifully small that it is insulting. 

Your average person that did nothing wrong and bought an average priced house in the last 8 years, has lost more than 5 times that amount already!

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