Teach
07-13-2008, 07:35 PM
Yes, nothing is sacred. Just ask those employees of The Polaroid Corporation here in MA. They thought they had lifetime benefits. "So's your old man!"
I'm generally not a doom-and-gloom kinda guy. I try to see the glass of water as half-full. Yet I refuse to bury my head in the sand like an ostrich.
Several years ago, I joined a health club here in the Boston area. Well, I read over the standard contract and signed on for a year. I gladly paid the club's membership fee to enjoy racquetball, tennis, sauna, steam, etc.
Well, about five months into my membership, there was a notice that there were to be additional fees (not mentioned in the contract); it was for towels, soap, juice, etc. It's not unlike what the airlines are currently doing. Call it "nickel and diming".
Some of us wanted to hire a lawyer to file a class-action suit. Howewer, we decided against it. There was a fuzzy area as to whether the club's owners were within their rights to charge us for what we considered inclusive amenities. Oh, I finished up my yearly membership, but I did not rejoin.
Yet, that incident was a wakeup call.
Yes, back in March, 1933, the US government under the newly inaugurated Franklin D. Roosevelt established the FDIC. This was done to deal with the panic that was spreading throughout the country as bank after bank was going belly up.
In those days, the FDIC insured deposits for up to $5,000. Today, that figure is $100,000 ($250,000 on retirement accounts, e.g., traditional and Roth IRAs).
Yet if I've learned anything in my 65 years, it's that the government, especially the federal government, can do anything they want. They can call the sky pink...and the sky is pink (I realize this is a ludicrous example). But yes, the government can do whatever it wants. Can they change our currency (devalue it)? You bet they can. In a manner of speaking, they already have. Check out the price of gold. Ask people in other countries what their governments can do. I have friends from South Africa. Ask them what the South African government did to the Rand.
Ever hear of the Weimar Republic in Germany in the years after World War I? Their Deutschmarks were worthless. Life savings were wiped out by hyperinflation.
This leads me to my point. It's about government agencies. In this case: the FDIC. Can the government change the rules? You bet they can. What if a wave of panic takes over this country? What if Freddie Mac and Fannie Mae fail? (the taxpayers -- you and me -- will probably have to bail them out).
But what about this IndyMac situation out in California? This is no mom-and-pop, garden variety bank. This is a big player. It wasn't even on the government's bank "watch list." There are supposedly ninety banks, nationwide, on that list. Chain Reaction. Domino Effect. Even my wife, whom I consider very level-headed, said to me just this evening, "Walt, is our money secure in that bank down the street?" I said, "Dear, as long as we don't have over $100,000 in there (which we don't), we should be just fine."
Yet I keep repeating my mantra: "The Government can do anything it wants. The Government can do anything it wants." Remember: "Nothing is sacred!" Nothing!"
I'm generally not a doom-and-gloom kinda guy. I try to see the glass of water as half-full. Yet I refuse to bury my head in the sand like an ostrich.
Several years ago, I joined a health club here in the Boston area. Well, I read over the standard contract and signed on for a year. I gladly paid the club's membership fee to enjoy racquetball, tennis, sauna, steam, etc.
Well, about five months into my membership, there was a notice that there were to be additional fees (not mentioned in the contract); it was for towels, soap, juice, etc. It's not unlike what the airlines are currently doing. Call it "nickel and diming".
Some of us wanted to hire a lawyer to file a class-action suit. Howewer, we decided against it. There was a fuzzy area as to whether the club's owners were within their rights to charge us for what we considered inclusive amenities. Oh, I finished up my yearly membership, but I did not rejoin.
Yet, that incident was a wakeup call.
Yes, back in March, 1933, the US government under the newly inaugurated Franklin D. Roosevelt established the FDIC. This was done to deal with the panic that was spreading throughout the country as bank after bank was going belly up.
In those days, the FDIC insured deposits for up to $5,000. Today, that figure is $100,000 ($250,000 on retirement accounts, e.g., traditional and Roth IRAs).
Yet if I've learned anything in my 65 years, it's that the government, especially the federal government, can do anything they want. They can call the sky pink...and the sky is pink (I realize this is a ludicrous example). But yes, the government can do whatever it wants. Can they change our currency (devalue it)? You bet they can. In a manner of speaking, they already have. Check out the price of gold. Ask people in other countries what their governments can do. I have friends from South Africa. Ask them what the South African government did to the Rand.
Ever hear of the Weimar Republic in Germany in the years after World War I? Their Deutschmarks were worthless. Life savings were wiped out by hyperinflation.
This leads me to my point. It's about government agencies. In this case: the FDIC. Can the government change the rules? You bet they can. What if a wave of panic takes over this country? What if Freddie Mac and Fannie Mae fail? (the taxpayers -- you and me -- will probably have to bail them out).
But what about this IndyMac situation out in California? This is no mom-and-pop, garden variety bank. This is a big player. It wasn't even on the government's bank "watch list." There are supposedly ninety banks, nationwide, on that list. Chain Reaction. Domino Effect. Even my wife, whom I consider very level-headed, said to me just this evening, "Walt, is our money secure in that bank down the street?" I said, "Dear, as long as we don't have over $100,000 in there (which we don't), we should be just fine."
Yet I keep repeating my mantra: "The Government can do anything it wants. The Government can do anything it wants." Remember: "Nothing is sacred!" Nothing!"