Background:
- Trump’s second term could mean the downfall of the FDIC, CFPB: Here’s what that means for consumers | CNBC
- Senator warns of national security risks after Elon Musk's DOGE granted 'full access' to sensitive Treasury systems | TechCrunch
What prompted this is I logged into my bank this morning to send some bill payments, and the FDIC banner at the top caught my attention. At first it made me laugh because of recent events, but that laugh turned into kind of a nervous chuckle:
I was like "Surely this administration won't fuck with the FDIC" but then read through the articles above, and now I'm not so confident.
Currently, I use a small, local bank. I've never really worried about it because of FDIC protections, but should I move my money out of it to a larger bank? Withdraw it all and stuff it in my mattress?
I'm not freaking out, but I am concerned about this for the first time in my life.
The rational part of me says that if it gets to that point, my money would probably be worthless anyway except for burning it to keep warm.
I have no idea how to get started with moving money to a foreign bank and into its local currency, but might be something I can look into and safekeep a portion there. I'm not wealthy by any means, but it's still a life savings.
Mostly I'm just concerned that the small bank I use, and have used forever, may no longer be safe. Like most small banks, they're pretty risk averse, but there are plenty of other factors which can cause them to go under. As for larger banks, I try to avoid them as they tend to take more risks and are generally more customer-hostile (which is why I love my small bank; they know me, and some of the old-timers have worked there for decades and knew me when I was a kid).
Yeah, makes quite a lot of sense to me. You can also, if you don't want to deal directly with a foreign bank (not to say that's a bad option, especially if you're thinking in terms of maybe doing some travel there depending on how things play out), do this: Open an account with Vanguard (vanguard.com), or call and say you're thinking about it, and ask them what to do if you wanted to move some money into being backed by a foreign asset. They are, at least historically, extremely reliable people on par with a local bank or better than. I won't give investment advice, but they have risk scores for their stuff, and you can focus on things like international bonds that are low-risk and pegged to the faith and credit of something that isn't the US government. Basically, not trying to make money off placing assets there, just putting it so it's pegged to something that's a little safer than the US right now. Bear in mind that they are still putting risk scores of 1-2 next to all sorts of US treasury stuff, so take it all with a grain of salt.
My feeling is that something that's aligned on the side of the fence for the rich people, is much less likely to get fucked with than something that's on the "consumer" side of the fence. Of course, deliberate fucking-with isn't the only way that something can suffer problems.
You also don't have to go whole hog. You can do some proportion of your savings to something that's diversified away from the US, however you do it, and get a feel for it. Don't try to be fancy, don't move things around on a short timeframe, get advice from professionals when you feel like you need it.