Insuring All Deposits Is the Only Answer. But Even That May Not Work.
There is a good chance the FDIC will insure all deposits and things will settle down. This is more likely than a complete meltdown. Stay diversified, including real estate and gold. best, Larry
Dear Professor Kotlikoff: Private debt funds have provisions that permit the manager to "gate" withdrawals if investors seek to withdraw funds in excess of readily available cash. Would it be too far fetched for the Fed to impose gates on withdrawals from regulated banks? One could imagine that depositors who could demonstrate an ordinary business purpose would be permitted to withdraw as usual and that provisions would be available to allow extraordinary withdrawals with justification while others would have to wait until cash becomes available.
Great post. Just before I read this, I was watching Fareed Zakaria's (CNN GPS) interview with Lloyd Blankfein. I recommend watching it. I didn't hear a whole lot from Blankfien that contradicted what Larry says. (Personal views of Ed Dolan)
You've told us what to do collectively. Is there anything we can do individually?