I think the economy is in a very bad way. Today we saw Lehman Brothers file Chapter 11 and Merrill Lynch sold to Bank of America. AIG is in trouble. This is territory that I have never had to even think about before. The Economist I am listening to is saying “…America is broke…”
Today someone I know went to his bank and took out most of his money, which is a small drop in a very large bucket, but he did so none the less. The reason was rumors of the bank closing as soon as tomorrow. Rumors were substantiated by the board member of a large credit union. Several others who were consulted suggested the way of safety.
My friend isn’t rich. But everything he has was in this one institution. He had no liquid cash savings available for immediate use. It was all in the bank. He didn’t close his accounts, but took most of what he had, out.
My other friend isn’t rich either. But she had College Savings funds in that bank as well as her regular checking and savings. She actually closed her accounts and liquefied everything. She was very freaked out about the rumors of closure.
What I am wondering in all this is the FDIC Insurance on deposits up to $100,000. But how quickly can the Feds get us cash if our financial institution were to close its doors tomorrow. You and I have bills that are due Thursday or Friday or Monday. If your bank is locked, how will those bills get paid? I believe the government assistance would take weeks at the least and months is probably more realistic.
Insiders at the branch told my friends that she has her money there and isn’t moving it. She said she would be worried about losing her job. Yet she also said that she would have nearly as late a notice as any of the clients. One bank employee told my friend he hadn’t even heard the rumors.
Well, in another town in Oregon, over 50 people were lined up pulling their money. The bank had to issue cashier’s check because they ran out of cash. My friend said there was no line at her branch.
This should be an interesting week. I wonder if I can trust God more in the midst of the storm?