If legislators do not walk on the ceiling of the debt, and the U.S. default on its debt, it may be necessary to start worrying about the safety of your bank deposits - in the end.
If the failure of government, not just a failure, but draws short, financial markets are in crisis, credit markets will take and the economy will turn around, "said Greg McBride, senior financial analyst at Bankrate.com .
Assuming that lasted for several weeks, the question is: support the government's deposit insurance cash good? (Federal Deposit Insurance Corp. will charge banks to guarantee deposits, but says it is supported by the faith and credit of the U.S. government.)
"There would be no net government," said McBride. While bank failures has slowed down - 61 to 30 July this year against 108 from January to July 31 last year - a debt default, suggesting an economy in turmoil, and thus, perhaps an increase in bank failures. If the FDIC fund had been exhausted, you have a scary scenario.
Fortunately, a predetermined period for U.S. debt is "very, very unlikely," said McBride. Moreover, "the doomsday scenario would be in place for some time before we have to worry about deposit insurance."
Another area of concern is now downgrading of credit rating agencies of the U.S. Agency debt. Savers, which is not so worrying. "If it is true, but not in default, bank deposits would probably become a safe haven, especially for consumers," said McBride. The bad news is that the current low interest rates on deposits would not improve anytime soon.
If the failure of government, not just a failure, but draws short, financial markets are in crisis, credit markets will take and the economy will turn around, "said Greg McBride, senior financial analyst at Bankrate.com .
Assuming that lasted for several weeks, the question is: support the government's deposit insurance cash good? (Federal Deposit Insurance Corp. will charge banks to guarantee deposits, but says it is supported by the faith and credit of the U.S. government.)
"There would be no net government," said McBride. While bank failures has slowed down - 61 to 30 July this year against 108 from January to July 31 last year - a debt default, suggesting an economy in turmoil, and thus, perhaps an increase in bank failures. If the FDIC fund had been exhausted, you have a scary scenario.
Fortunately, a predetermined period for U.S. debt is "very, very unlikely," said McBride. Moreover, "the doomsday scenario would be in place for some time before we have to worry about deposit insurance."
Another area of concern is now downgrading of credit rating agencies of the U.S. Agency debt. Savers, which is not so worrying. "If it is true, but not in default, bank deposits would probably become a safe haven, especially for consumers," said McBride. The bad news is that the current low interest rates on deposits would not improve anytime soon.
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