As we all know, the Federal Deposit Insurance Corporation (FDIC) guarantees depositors that they’ll get their money back if a bank fails, at least up to a certain amount. To fund its operations, the FDIC collects small fees from the banks that are held in reserve for the purpose of taking over troubled banks and paying off depositors.

Since the Great Depression, a period marked by widespread runs on banks, the FDIC has done a good job of fulfilling its mandate. So how are they doing in this crisis?

In a nutshell, they are in trouble.

The FDIC insures 8,246 institutions, with $13.5 trillion in assets. Not all of them are going bankrupt, of course. Yet as of late July, a disturbing 64 banks had gone belly up this year – the most since 1992 – costing the FDIC $12.5 billion. At the end of Q1, the agency was already asking for emergency

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At Casey Research, they have been watching the actions of foreign holders of U.S. dollars as closely as a Las Vegas pit boss watches a card player on a $1 million winning streak. Many of those in the deflation camp largely, or entirely, ignore the potential role these foreign holders may play in the drama now unfolding. But in fact, foreigners have, over the last decade, been by far the single most important source of buying for U.S. Treasuries.

Given the Treasury’s need to flog on the order of $3 trillion worth of its unbacked paper this year just to keep the government’s doors open – and that is a four- or fivefold increase over 2008 – the foreign buyers not only have to show up for the Treasury auctions, they have to show up in droves.

In mid-July, the Associated Press reported that “Foreign demand for long-term U.S. financial assets dropped

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I wouldn’t read a lot into the action in the gold market on Friday. It was just another day off the calendar…as Ted Butler would say. The only comment I would make is that the action in the gold price feels more like a top than a bottom. Silver was a little more interesting, as it rose in price through the entire trading day, and finished virtually on its high of the day…and a new high for this move. Now the dichotomy between gold and silver is starting to show up in the price action, and not just the open interest numbers.

Speaking of open interest numbers, gold o.i. on Thursday fell 3,216 contracts to 391,144…on absolutely monstrous volume of 174,662 contracts. Silver’s decline was much more modest…only 93 contracts to 96,309…on total volume of 18,664 contracts.

The Commitment of Traders report issued yesterday, was as expected. In silver, the bullion banks

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In November of 1997, my partner and co-editor of  The Casey Report, Doug Casey, wrote an article titled “Foundations of Crisis,” which leaned heavily on the research of Neil Howe and the late William Strauss.  Howe and Strauss have written many books on how generations determine the course of history and how they will shape America’s future. Their forecasts on a wide variety of indicators have turned out to be amazingly accurate. They were among the first to predict (back in the late 1980s) the rise of Boomer-driven culture wars and the simultaneous rise of Gen-X-driven free agency and distrust of government. And they were completely alone back then in predicting, for the post-X “Millennial Generation” (a label they coined), a decline in youth crime and risk taking and an increase in youth civic engagement that would first become apparent around the year ...

Today’s guest is Olivier Garret, CEO of Casey research. Oliver is going to give us his take on the ballooning deficit. Enjoy and be sure to leave us a comment giving us your thoughts on the deficit!

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On March 20, 2009, the bipartisan Congressional Budget Office (CBO) released its latest forecast in an effort to take into account the impact of the recently released Obama budget.  The verdict?  A whopping $1.8 trillion deficit for 2009, approximately four times larger than the all-time record established in 2008 ($455 billion).

The concerns raised by this latest forecast are many: 1)    A mere two months ago, the CBO’s estimate for 2009 was “only” $1.2 trillion. They have already grossly underestimated a deficit that will most likely continue to balloon in the coming months.

2)     While the new administration has focused its attention on the spending side of the budget, it has paid little attention

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Obama’s stimulus plan will only end up making a sick patient even sicker, says Jon Herring. But that won’t stop it happening. Jon says infrastructure firms stand to benefit in the short run. But the real long-term winners will be companies that benefit from rising inflation.

This from Investors Daily Edge:

From the government that brought you $1,000 toilet seats and $500 hammers comes the “Great Economic Stimulus Boondoggle of 2009″. Okay, while it might be an appropriate title, that’s not what it is called. President-Elect Obama’s stimulus plan is actually called the “American Recovery and Reinvestment Plan.”

In my article last week, I brought up the distinct parallels to Ayn Rand’s book Atlas Shrugged and what is happening in the financial and political world today. In a Wall Street Journal article highlighting these startling similarities, Stephen Moore tells how Rand pilloried various acts of government futility and

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HIDDEN VALUE

Dear Value Seeker,

Sometimes words speak louder than actions.

Especially when it’s the Fed’s words.

Today, market watchers are on the lookout for clues about how the Fed is going to tackle deflation.

A rate cut of at least 0.5% is already in the can as far the pundits are concerned.

But with consumer prices plunging, investors expect the Fed to signal more emphasis on more unorthodox ways of ‘stimulating’ the economy.

According to MarketWatch, “The bottom line on Fed policy is supply of money. The Fed typically targets the price of money but, with the price so low, it will focus on increasing the quantity of money through its balance sheet.”

Not that the Fed hasn’t tried this already.

It has doubled the size of its balance sheet to over $2 trillion since September.

As Bud Conrad at Casey Research notes, “Mostly under the covers, [the Fed]

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Within the last year, the true extent of the real estate debacle and ensuing credit crisis in the United States has become blatantly obvious.   But now there is a new phenomenon rearing its ugly head: a credit crisis of the individual that is hitting a large number of Americans straight in the pocketbook. The reason: credit providers have started to batten down the hatches.

According to a November report by the Federal Reserve, nearly 60% of banks severely tightened their lending standards on credit card loans and 65% on other consumer loans in the last three months. As unemployment and delinquency rates go up and lenders are trying to minimize their risk, the average American all of a sudden finds himself cash strapped… this at a time when home equity has dried up, 401(k)s and IRAs are losing value by the day, and many common stocks are barely worth the

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Gold hovered around $755 from the far East to the New York open on Friday, but then it was off to the races with a vengeance, rocketing nearly straight up from the beginning to end of the Comex, puncturing $800 and holding through the Globex to close at $801.60, up a stunning $57.00. For the week, gold added nearly 8%, albeit most of it yesterday.

Platinum also pushed higher through the day, cresting $800 and holding there, to end at $819, up $45. For the week, platinum lost 1.7%.

Silver’s followed gold’s lead and posted a steadily rising day, closing at $9.64/oz., up 72 cents. For the week, silver was up 1.7%. (Click here for charts)

Gold bugs have been predicting (or hoping for) the day when gold would finally break the shackles of the $750 barrier and submit a monster up day, and yesterday they got what they were

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The October statement of the U.S. Treasury Department revealed that the federal deficit has reached the largest level on record. Over the last twelve months, the U.S. government spent $618 billion dollars more than it was able to collect.

The deficit is already enormous and with all signs pointing towards even greater government spending, the implications are astounding. Casey Research Chief Economist Bud Conrad predicts that next year’s budget deficit will be closer to the tune of $1.5 trillion!

Source: Budgeting your Future