Fed slap-down or brilliant Idea – What do you think?

On April 13, Sheila Bair (aka, the woman who just stepped down as head of the FDIC) wrote an op ed in the Washington Post entitled Fix Income Inequality With $10 Million Loans for Everyone!  (see link below)  Perhaps she is just suffering from PTSD resulting from having to manage bank failures with only $18 million in capital and a $200 billion backstop line of credit from the Treasury, or maybe the gal’s onto something…what do you think?  (I suspect that in terms of percentages there are as many shadow bank failures waiting in the wings as there are shadow homes waiting to be foreclosed upon)

http://www.washingtonpost.com/opinions/fix-income-inequality-with-10-million-loans-for-everyone/2012/04/13/gIQATUQAFT_story.html

P. S. If you think that’s bad, SIPC only has $100 billion in net assets and has NO GOVERNMENT GUARANTEE.  Most people don’t know that when you execute a sell trade in your brokerage account it takes three days to clear to cash.  During that time frame (and afterwards if you have not specifically designated that the cash held in your brokerage account be held in an FDIC insured account), you are vulnerable in a way that only MF Global customers can truly understand.

3 comments to Fed slap-down or brilliant Idea – What do you think?

  • Brian

    Ha ha! 10mil for everyone? Imagine the inflation that would result!

  • Richard

    $10 million per person would require ~3,100 trillion dollars. Given Shadowstats estimate of the money supply is only about 15 trillion, this would increase the supply of money >200X or dilute the value such that $1000 now would have the value post distribution of less than $5. Really dumb and would wipe out all savers.

  • thankful

    What they need to do is give everyone a debt holiday. Wipe out all debts and start over with no interest.

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