In a recent interview, Eric King of KingWorldNew.com asked me why CMIGS customers are buying. “Is it concern about inflation, the dollar or the economy?” he asked. My answer was that most buyers comment on concerns about the world’s financial structure. Will the banking system survive? Craig Stahl of Problem Bank List has put up a blog post that confirms why investors are turning to gold (and silver).
According to Stahl, “a recent Rasmussen poll indicates a great sense of unease regarding the stability of the US banking system. ‘Only 8% are very confident in the stability of America’s banks, while 11% are not at all confident’. In addition, the survey shows that ‘54% lack confidence in the stability of the US banking industry.’ Prior to the financial crisis, 68% of the public had confidence in the banking system.
“Rasmussen’s survey also showed that 32% of Americans are ‘at least somewhat worried’ and 8% are ‘very worried’ about the money they have on deposit in the bank. Most of the American public still professes to be unconcerned about losing money in a banking failure, despite the admission by government officials that the entire financial system was on the precipice of collapse in 2008.”
That Americans are worried about the banking system but mostly are unconcerned about losing money in a banking failure does not surprise me. Ingrained in Americans is not necessarily faith in the FDIC, which guarantees deposits, but a strong belief – and a correct one, I believe – that fedgov will not let any depositors suffer any losses, which could precipitate a bank run.
Problem Bank List counts 129 failures so far this year. And, not a depositor has lost a dime. Further, bank failures, except in the state of domicile, rarely get any news coverage. People in general simply are not concerned. However, the people who are buying gold and silver state that they are.
Problem Bank List further notes that this year’s banking failures are on track to outpace the 140 banking failures of 2009.