Friday, March 6, 2009

FDIC, ING update

A few people asked after yesterday's post about the FDIC if it's time to start hiding money in a mattess. The answer's no.

The FDIC is not insolvent and probably won't get there. Yesterday's post was to illustrate the point that banks are so screwed right now that even the insurer we all count on to protect our money now has a liquidity problem (translation: it's low on cash).

The real danger is not the FDIC failing, it's that to stay solvent it will have to raise fees on banks which will make it harder for weak banks to operate.

Keep an eye on it, but don't cut holes in the mattress just yet.

On another note, I decided not to use the cash I have in my ING accouunt to knock down my credit card balance. Even with the dismal return, times are too tough to not keep some extra cash around. In the meantime, I am going to stop making ING deposits and redirect that money toward the card balance to pay it down more quickly.

1 comment:

Butterrfly said...

Increase payments on the credit card while holdong on to cash reserves...makes sense. :-)