Background:
- Trump’s second term could mean the downfall of the FDIC, CFPB: Here’s what that means for consumers | CNBC
- Senator warns of national security risks after Elon Musk's DOGE granted 'full access' to sensitive Treasury systems | TechCrunch
What prompted this is I logged into my bank this morning to send some bill payments, and the FDIC banner at the top caught my attention. At first it made me laugh because of recent events, but that laugh turned into kind of a nervous chuckle:
I was like "Surely this administration won't fuck with the FDIC" but then read through the articles above, and now I'm not so confident.
Currently, I use a small, local bank. I've never really worried about it because of FDIC protections, but should I move my money out of it to a larger bank? Withdraw it all and stuff it in my mattress?
I'm not freaking out, but I am concerned about this for the first time in my life.
The rational part of me says that if it gets to that point, my money would probably be worthless anyway except for burning it to keep warm.
I saw the same banner on my bank's website the other day, and also wondered what the "full faith and credit of the US government" might really be worth in the near future.
If the FDIC goes away, then the question is which bank will be less likely to suffer a bank run. That is really hard to predict, since it is all about consumer confidence and marketing perceptions. Is your local savings-and-loan safer because they are stable and boring? Or is a huge national bank safer because it's "too big to fail" and more likely to be bailed out in a crisis?
The best bet is diversification. Spread your savings among multiple banks, and consider putting it in things other than US dollars: real estate, gold, foreign currency, etc.
Y'all don't want to hear this, but it might not be a bad idea to start storing some of your savings as crypto. It was designed for this very purpose: to allow you access to your funds from anywhere in the world, when governments fail to protect your assets.
The problem is for people who have more than $500 to save somewhere: if I put half my assets in crypto, we're talking north of $600,000.
I do not trust a bunch of people who think computer-generated monkey pictures are neat with great big piles of money, and until they stop acting like a cross between the stupidest shit you've ever heard and a poverty-spec casino, it's not gonna fucking happen.
So yeah, I still trust the banking system more than I do putting it into even something like ETH or BTC, even if I'm doing self-custody, because I don't trust a single player that's involved will do anything other than immediately collapse if it reaches the point where crypto becomes more useful than real money and people start trying to pull usable money out of their portfolios.
If I can't pay my bills and buy food, then I might as well have just invested in shiny pebbles.