WHERE IS YOUR MONEY?

If you are an Elkmont Blog reader, you know that one of Hill Spirit's goals is to our community stronger; helping us to be better prepared for what life throws our way, to have choices when times are tough.  There are many posts through the last several years that help find information on various topics.  

Today's post is about something Hill Spirit has been following for several years.  The bells are now starting to ring in enough different places to bring it to your attention.

The federal government has made the financial mess of 2008 worse. The big banks got a bailout, it didn't make things better but kicked the can down the road and gave us the illusion that things were fixed. It wasn't and we are fast approaching the can that's down the road.


There are ugly things that you need to know.  In one of those big federal spending bills was tucked a resolution that allows the banks to do a "bail in" if it can't cover its debt.  

What is a "bail in"? It allows the bank to take money from your bank account.  How can that be? To make it simple, when you put your money in, you get a receipt.  It is really an IOU that the bank promises to pay when you ask for it. If the bank can't pay what it owes, it pays off certain things first.   It is similar to bankruptcy. The account holders (you) will be paid last. A percentage of your money may disappear or you may not be able to get it out when you need it.  If a bank has a larger amount of derivatives (word of the week), it is in danger. The FDIC promises to cover your account but the amount covered can be moved down as well as up.

Now what does this mean for us.  The advice being given for us common folk is to move some of our money to local banks that aren't tied up in the derivative mess.  The huge banks, the national banks and regional banks are woven together and so to make a wise decision, check out this link, Banks Ranked by Derivatives.  

If your bank is ranked toward the top, you might want to find one that isn't.
JP Morgan Chase has close to 60 trillion in derivatives.  Red flag, red flag to those of you with accounts at Chase.  Hill Spirit was shocked to see Regions and Compass Banks in the top 25.

You may want to consider doing your own research on keeping your money safe.  You don't have to hurry, this is not something that will probably happen tomorrow but it is on the horizon.  You have time to plan. Being ready for the the unexpected means planning for speed bumps that might pop up in your life.