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Deposit Insurance: Lauren Lyster Interviews Mish at Wine Country Conference

I have another interview to present from the Wine Country Conference. This is an interview of me by Lauren Lyster of Yahoo! Finance regarding FDIC deposit insurance.

I did not discuss deposit insurance in my presentation, however, deposit insurance was the focus of a five minute interview with Lauren Lyster.

You can play the interview at the Daily Ticker site Don’t Depend on Bank Deposit Insurance: Mike Shedlock

SitkaPacific Capital Management’s Mike Shedlock, who is also the author of the Global Economic Analysis blog, says the Cyprus fiasco is an example of what can happen in a banking system that really can’t guarantee everything it’s promised. He argues these are issues that exist in the U.S. banking system too.

“Here in the U.S. we have something like $ 3 trillion worth of monetary base, with $ 50 trillion worth of money out there that’s lent on that monetary base,” Shedlock told The Daily Ticker on the sidelines at the Wine Country Conference in Sonoma. “So how are we going to pay this all back? We can’t.”

Shedlock argues that deposit insurance – guaranteed by the FDIC for accounts up to $ 250,000 – can’t possibly cover all bank deposits.

“The whole idea of insurance… is fraudulent,” he says.

Shedlock points to New Zealand, which does not promise to insure depositors, as a better system.

Depositors may be forced to figure out if the banks they put their money in are solvent. Shedlock says the current system creates “moral hazard.”

I have gone on record stating that FDIC will be honored, up to the stated limits. If necessary, the Fed will print money to paper over losses.

However, amounts in excess of FDIC will not be honored.

Those not wanting to trust FDIC at all may be seeking alternatives. Given global happenings, I cannot really fault anyone for that attitude.

I presented some ideas regarding deposit insurance in Five Alternatives to FDIC “Insured Deposits”.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com

Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Mish’s Global Economic Trend Analysis

Deposit Insurance: Lauren Lyster Interviews Mish at Wine Country Conference

S&P 500 May Fall More Than 40% By Fall Says Chris Martenson in Interview with Lauren Lyster

In another interview from the Wine Country Conference, Chris Martenson says S&P 500 May Fall More Than 40% By Fall.

Even though the S&P 500 and Dow Jones Industrial Average are hovering at all-time highs, Chris Martenson, author of PeakProsperity.com and the “Crash Course” Series, is forecasting a major market correction.

Martenson predicts the S&P could fall 40% to 60% to the 600-800 level by this fall. His last major market call was in March 2008, before the financial crisis.

The Daily Ticker’s Lauren Lyster sat down with Martenson at the 2013 Wine Country Conference in support of Les Turner ALS Foundation to get his market and economic predictions.

“I see recessionary signs all over the landscape. In particular, Europe is already in recession [and] Japan is already in recession,” he says. “We are looking at global economic slowdown.”

As for corporate earnings, a stronger U.S. dollar could bring down profits this year, Martenson believes. Corporate profits currently account for 11% of GDP, which is way outside the norm of 6% of U.S. growth. He’s also bearish on the U.S. economy and sees weakness in sectors that have shown improvement like the housing market.

“Fundamentally there always has to be some connection between where markets actually are and their price,” Martenson says. He believes the Fed’s monetary policy has reached a point of diminishing returns and could result in “a pretty significant” market pullback.

Click on the first link at the top for a video interview.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com 

Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Mish’s Global Economic Trend Analysis

S&P 500 May Fall More Than 40% By Fall Says Chris Martenson in Interview with Lauren Lyster

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