FDIC insolvent until...forever

The article says until 2012, but let's face it...this crisis is never going to end until the whole system collapses under its own weight. Banks will continue to fail, people will continue to seek reimbursement from the FDIC for money lost, and their balance sheets will be in perpetual imbalance. This crisis is inherent in the system designed 96 years ago; this is its inevitable, planned outcome. If you own dollar-based investments, roll them over into precious metals. Yesterday. The dollar is brain-dead on life support, just waiting for someone to mercifully pull the plug.

CNN -

The government insurance fund designed to protect consumer bank deposits will likely stay in the red through 2012, Federal Deposit Insurance Corp. chief Sheila Bair said Wednesday.

Testifying before members of the Senate Banking Committee, the nation's top commercial bank regulator stressed that her agency was taking immediate steps to replenish the dwindling fund. But she said those efforts would not put the rescue fund in the black until a little more than two years from now at the earliest.

The fund has come under severe strain in recent months amid the recent surge in bank failures. Ninety-eight banks have failed so far this year, which has reduced the fund's value to $10 billion from $45 billion a year ago.

Last month, the agency painted an even more dire picture, estimating that the fund is currently in the red after taking into account future bank failures it anticipates will happen.

That would not be the first time the fund has had a negative balance. During the S&L crisis of the late 1980s and early 1990s, it slipped into the red.