Bank failure rumors
Here are some rumors I found that I wanted to talk about.
Vanguard and Blackrock have declared bankruptcy. A number of major USA banks have also declared bankruptcy.
There are 2 types of bankruptcy filings in the US. One is where the bank totally fails and its assets are sold off to creditors. Certain creditors have priority and get money first. The other is a reorganization where the company gets protection from creditors to restructure its debt. Most companies choose the reorg.
Most Americans live off credit.
Too vague to be true. What is true is they use their credit cards and many do not pay off the balance each month. What is true is about 30% of Americans do not have $500 for a minor emergency. This indicates really bad money management. But Americans and companies had really bad money management even before World War 1, which was written about in a book I read.
What happens to a credit card when the issuing bank declares bankruptcy? What happens to deposited finds IN a bank when that bank declares bankruptcy?
Banks in the US have FDIC insurance and each account is insured up to $250,000. If you have more than that in the account and the bank fails, you only get $250,000. So most rich people keep their money in many accounts in many banks, but also in bond fonds which are generally more stable than a stock fund. However I would never touch a bond fund, especially any bond fund that is heavy in state or city level municipal bonds. The city and state officials have no idea how to manage the budget or the money and the funds are unreliable. This is especially true of these Democrat-run Michigan cities: Jackson, Detroit, Lansing, East Lansing, Ann Arbor, Flint. And also true of these other Democrat-run cities: Chicago, Los Angeles, Portland, San Francisco, and many more.
Get some cash out of your bank.
It’s always prudent to get some cash out of your bank but store it in a safe that is not easy to move, like an underground safe in a cement floor. It is also prudent to get some silver in case things get really bad, because no one is going to have change for a gold coin worth $5000 for you to buy milk.