There is or was $6.6 trillion on deposit at US banks, but over $2 trillion of these are UNINSURED — over the FDIC limits.As I understand it, this is already happening. That's why T-bill yields fell to zero; people and businesses were moving their money from bank accounts to Treasury bills. I've heard that's part of what caused Wachovia to be taken over—money was flowing out of the bank rapidly.
Eventually the sheeple who own that $2 trillion will WAKE UP and start pulling it out of the banks, if they aren't doing that already today. And so will people and businesses with deposits that are even FDIC insured, as they trust their mattress more than their bank.
So, get ready for Congress to change the FDIC limit to $1 million or more — or all of it, putting the taxpayer again on the hook for trillions.
Otherwise the real bank run starts right now. And unlike 1933, there won't be lines outside banks. Bank runs today are done right here, on the internet, where they can't be seen but they can sure be felt.
If that online bank run is already underway, which based on the near 0% short term t-bill rate it is, and Congress doesn't raise FDIC, then get REAL worried about the banks closing, by order of the government. Get worried about not having access to your money.
The Emergency Economic Recovery Act of 2008 would temporarily raise FDIC insurance to $250,000.