Unless you think banks themselves are about to go belly-up, which seems - um, fanciful, at best.

call me crazy.

So, to answer your question: no.

Actually, when Countrywide first started reporting its huge losses there was a run in California.

FDIC eliminates the risk, but it doesn't necessarily prevent people from panicking.

Here is a thought for WaMu employees TAKE A DAMN ECON. COURSE!!!

a. they are in mutual funds or retirement accounts; or

b. you have more than $100,000 in checking and savings account at the same bank.

The serious threat is the independent currency traders out there... As we know, countries are already making moves to diversify their dollar holdings into other currencies --yuan & euros being popular-- which is just sensible.

However, if something triggers currency TRADERS to dump a significant portion of their dollar holdings for other currencies, --even 5%, it is claimed--, they could depreciate the value of the dollar in a free-fall. Such a free-fall could not be stopped by the US Central Banks purchasing up all the extra flapping supply of dollars (which is the standard process to prop up the value of a currency value drop).

Check out "The Future of Money" by Bernard Lietaer, a former currency trader and one of the architects of the Euro itself.

I think you'd like what he has to say Charles. I'd be happy to lend you a copy of the book if you can't acquire one.

Good thing we've got our trusty pal China watching our economic six o'clock. They'll just jump in, scoop up all those loose dollars at bargain-basement prices, then hold onto them for about hundred years or so, until we either buy everything we need directly from them (pesky lead-poisoning issues notwithstanding), or they in turn buy up everything we currently still own.

Guess I should have taken that Mandarin course in HS after all...

I don't think it's certain that China would do that, or be able to do that. With a dollar-value in free fall, the US Central Banks could spend(waste) literally trillions trying to prop it up, to no avail. Other currencies would likely drop in value also (since most countries have dollar holdings, and those holdings would evaporate in value, lowering their overall 'basket' of value.)

I'm not certain that it would be in any country's interest to then purchase a huge amount of a low/no-value currency. I don't believe that occurred in any of the currency collapses we've seen across the 80's and 90's (baht, rouble, Argentine peso). ((But then, perhaps it would be a strategic move considering the US's place in the world. On the other hand, since the rest of the world is riding on American consumerism (not manufacturing) to keep everything afloat, once Americans have no money with which to purchase, we may become economically useless.))

In those cases investors fled the country and the currency, leaving it to rot on the ground. The IMF then moved in to restructure requiring the gov't to set exorbitant interest rates (like 30+%) to re-establish a favorable environment for loans. These adjustments/rates led directly to a massive unemployment and a depression and then what is known as "IMF Bread Riots".

If the U$D plummets, there would be no real safe currency in which to loan the US cash, as the entire world's currencies would be affected severely. One wonders if the IMF's 'structural adjustment' would be effective at all. I'm not clear on all the ramifications, but there would likely be a worldwide depression that would affect even mighty China.

Clearly it's in no-one's interest to precipitate a dollar collapse, but it could happen via the uncoordinated actions of many minor players.

And yes, you should have taken that Mandarin course in HS. You still have time to start, however. :)

One wonders how coordinated American's could be in the face of such economic abuse...

I mean, who else is going to buy all that stuff? And what are the consequences of a collapse (or at least a serious reduction) in China's current trade surplus if we stop buying it?

(Of course I hope the $ doesn't tank. I just hope we get complementary currencies up and running a.s.a.p. to stave of the worse of any financial messes the future holds.)