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Great summary, thanks. But I just have to comment on this: > unless that third party is insured by a government in the event of disaster. "Insurance by govern

Great summary, thanks. But I just have to comment on this: > unless that third party is insured by a government in the event of disaster. "Insurance by government" does not help those who save money. Dollar lost 98% of value over the century. It did not help those in Cyprus last year who got their deposits locked up indefinitely within the island. And it will not help EU depositors if ECB starts using Cyprus case as they suggested in last year's paper. According to your own words, "your money belongs to someone else" and those guys will be able to take it from you should they need it before you run to an ATM. Also: all those bail-outs and QE? Those are effective taxes that instead of changing number of units on your account, make your share of money supply (and therefore purchasing power) smaller while someone else's share gets bigger. Primarily, of some big bankers or investor groups. (Example: did you notice how businesses struggle to stay up, or how prices rise, especially in the places close to money distribution centers: e.g. NYC, SF, London, Paris?) So I would say, considering all of the above, "FDIC insurance" (or alike) is more like a red herring. Your bank will never fail and take all your money outright because it allows the entire system of banks to steal from you steadily in a more obscure manner. Anyone who brings up security of "FDIC insurance" either does not see the whole picture or is taking part in the fraud.

maxerickson 12y ago
You should calculate the value lost by a dollar in a savings account for that argument, not a dollar stuffed in a mattress.
- oleganza 12y ago
  Do you really consider that some % offered to you as an interest on savings account make a difference when there is almost 100 billion USD printed each month in form of bond purchases by Fed? I'd say more: by locking your money in the savings account (in return for few %) you guarantee your bank protection from bank run. If suddenly it turns out your bank is being bailed-in (your deposit is partly taken by central bank), or dollar goes down, they have all legal reasons to deny you access to your cash. Also, they can reliably use that cash for tons of loans (based on fractional reserve, of course) since you are not going to remove that cash from your balance any time soon. These little favors: "FDIC insurance", "interest payments" are all pieces of a theater to make you either blind or a part of the scheme (but you will lose nonetheless).
  - maxerickson 12y ago
    Yes. Interest rates are low now, but over a 100 year period like you are complaining about compounding will offer a significant offset to inflation. My point is largely that if the charitable argument still makes your point, it makes the situation look even worse than the favorable number and rhetoric against the system that you are using. Government policy towards inflation is partly a result of a desire to have people put their money to work, exactly in things like savings accounts, so it makes sense to account for those benefits, even in a criticism.

maxerickson 12y ago

You should calculate the value lost by a dollar in a savings account for that argument, not a dollar stuffed in a mattress.

oleganza 12y ago
Do you really consider that some % offered to you as an interest on savings account make a difference when there is almost 100 billion USD printed each month in form of bond purchases by Fed? I'd say more: by locking your money in the savings account (in return for few %) you guarantee your bank protection from bank run. If suddenly it turns out your bank is being bailed-in (your deposit is partly taken by central bank), or dollar goes down, they have all legal reasons to deny you access to your cash. Also, they can reliably use that cash for tons of loans (based on fractional reserve, of course) since you are not going to remove that cash from your balance any time soon. These little favors: "FDIC insurance", "interest payments" are all pieces of a theater to make you either blind or a part of the scheme (but you will lose nonetheless).
- maxerickson 12y ago
  Yes. Interest rates are low now, but over a 100 year period like you are complaining about compounding will offer a significant offset to inflation. My point is largely that if the charitable argument still makes your point, it makes the situation look even worse than the favorable number and rhetoric against the system that you are using. Government policy towards inflation is partly a result of a desire to have people put their money to work, exactly in things like savings accounts, so it makes sense to account for those benefits, even in a criticism.