{"id":742,"date":"2008-09-26T17:25:12","date_gmt":"2008-09-26T21:25:12","guid":{"rendered":"http:\/\/www.scaredpoet.com\/wordpress\/?p=742"},"modified":"2008-10-07T17:10:23","modified_gmt":"2008-10-07T21:10:23","slug":"why-ive-lost-all-faith-in-the-banking-system","status":"publish","type":"post","link":"https:\/\/scaredpoet.com\/blog\/?p=742","title":{"rendered":"Why I’ve lost all faith in the banking system"},"content":{"rendered":"

\"Bail\"<\/a><\/p>\n

Today, with the collapse of the nation’s largest Savings & Loan<\/a> I, like many other people in America, are waking up to an awful truth. Our money doesn’t really exist<\/em>.<\/p>\n

Sure, the government wants people to THINK it’s real, and that it’s also very, very safe<\/a>. Because allegedly, all of this “real money” is insured up to certain amounts. But The Washington Mutual failure<\/a> went down the way it did for a good reason: there was no way in hell<\/strong> the FDIC could truly protect everyone who held deposit accounts in there. WaMu is simply too big. So is Chase, so is Bank of America. A big failure with no buyout would crush our nation’s deposit insurance system, and truth be told, it’s really anyone’s guess as to whether people would really get their money back. And we can only hope that these banks stay strong, because if they fail, we’re screwed<\/strong><\/em>. Billions of dollars, gone poof, with the FDIC only able to shrug their shoulders if a really rich white knight doesn’t come to the rescue.
\n<\/p>\n

Let me just say that until a week or two ago, I loved<\/strong> the US banking system. I was totally embracing the conveniences and niceties afforded to me by high-tech, 21st century state of the art online banking. For the most part it allowed to walk around cashless and yet somehow, not poor. Because instead of wads of cash in my wallet, I have this little piece of plastic<\/a> that substitutes<\/em> for cash, and a little swipe here and there debits the costs of food, gas, clothing and bills from some abstract digital pot o’ gold sitting on the hard drive of a remote computer out there, somewhere. If my digital pot of gold begins to run dry, that computer sends me a text message so I can do something about it. And every two weeks or so, my job refills the pot, and the cycle would continue ad naseum. Or so I thought.<\/p>\n

It wasn’t always this way. When I was 15 and earning my first bits of cash by helping my dad with his business, I used to like knowing that my money was this physical thing that I could hold in my hands, and could be tangibly given and taken. Even though i was a digital, computer-nerd kinda guy (I even had a Palm Pilot!), my “bank” still literally was my sock drawer, where my cash was tucked away. It stayed that way until age 18, when I went off to college and my cash (then stashed in the fold of my laptop I brought with me) went into a credit union, and I opened my first checking account.<\/p>\n

Even then, the tangible disconnect with money was minimal. I worked and got a paper check every week, that I then physically took to the credit union. The check was then magically turned into cash whenever I slid my ATM card into a machine and punched a few buttons. There was some virtualization, but the end result was still money<\/strong>: paper greenbacks that I stuffed in my pocket and traded for other things as needed.<\/p>\n

It wasn’t until I left college that this really changed. Ironically, it was all because I was a bit uneasy that my money wouldn’t be so safe in a teeny tiny little credit union with only a few thousand or so people hoarding their cash there. I also saw that big banks offered online banking and check cards, things my little credit union didn’t quite offer yet. So I moved up in the world. My post-college job offered direct deposit, and my new Big Bank gave me a check card. <\/p>\n

And so it began. Almost instantly and without even realizing it, I would rarely actually touch or have physical cognizance of the money I earned. Some data entry clerk in a payroll office somewhere would click a few keys and, entirely through some mutual agreement between work and bank, I would get “paid.” My cash (and the paper check that stood in for my cash) was replaced by numbers on a screen. And I would subsequently “pay” others for goods and services via keystrokes, card swipes and mouse clicks. <\/p>\n

In short, somehow, we all just decided to replace actually having<\/em> money with the abstract concept<\/em> of “having money.” I no longer pay someone by actually handing something over. Instead it’s by some sort of agreement that I’ve transferred over some digital bits that we believe that people have been “paid.”<\/p>\n

I’ve actually done the math. In restrospect, I now only physically come in contact with about 2% of the money I earn. The rest of it I never see or touch myself. It just gets stored, or flows in and out of this conceptual account somewhere, and my only real knowledge of its supposed worth is by looking at a computer screen or the occasional printed receipt to see how big or small the numbers are. Even my bank statements are “paperless” (helps the environment, so my bank says), and just as ethereal as the money it claims to represent.<\/p>\n

It’s the same concept, unfortunately, that is causing the banks to fail. It’s not because they are actually, physically losing assets or money. Rather, the failures are happening simply because a lot of people just think<\/em> they don’t have the same money that these people thought<\/em> they had just a few weeks ago. Nothing tangible has changed. No payments have been made, no transactions have caused money or goods to change hands. It’s all based on what a bunch of humans think something is worth or not worth from one moment to the next. <\/p>\n

And that to me is the scary part. It no longer matters that conceptually, I should<\/em> be able to turn my labor into physical bits of paper and conversely, into goods and services. If a group of people get nervous and decide that the bank which keeps my money should go under, those numbers on a screen become instantly meaningless. And eventually, even the bits of paper will lose value. And I could wake up one morning to having nothing, thanks to the hysterics of a bunch of panicked investors.<\/p>\n

A week ago, if someone had told me this, I would’ve said they were just overthinking the issue. Now, I’m beginning to think that this concept is indeed, precarious and downright scary.<\/p>\n

How long will it be before I can simply will any common individual into bankruptcy, simply because *I* think they’re poor? <\/p>\n

I wonder if maybe it’s time for me to consider filling up that sock drawer again….<\/p>\n","protected":false},"excerpt":{"rendered":"

Today, with the collapse of the nation’s largest Savings & Loan I, like many other people in America, are waking up to an awful truth. Our money doesn’t really exist. Sure, the government wants people to THINK it’s real, and that it’s also very, very safe. Because allegedly, all of this “real money” is insured […]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,6],"tags":[],"class_list":["post-742","post","type-post","status-publish","format-standard","hentry","category-general-stuff","category-sociopolitical-rants"],"_links":{"self":[{"href":"https:\/\/scaredpoet.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/742","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/scaredpoet.com\/blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/scaredpoet.com\/blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/scaredpoet.com\/blog\/index.php?rest_route=\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/scaredpoet.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=742"}],"version-history":[{"count":0,"href":"https:\/\/scaredpoet.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/742\/revisions"}],"wp:attachment":[{"href":"https:\/\/scaredpoet.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=742"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/scaredpoet.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=742"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/scaredpoet.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=742"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}