User:ArenasO'dell767

Today, we seek protection with regard to things we regard being important. For example with life, I believe a lot of people have life insurance. Equally, to protect bank deposits, governments provide security by implementing deposit insurance.

As much of you know, the use of deposit insurance is to safeguard your savings in the lending company. This helps provide a sense of security to savers thereby prevents mass withdrawal of savings (known as bank runs) within countries. With this, the structural integrity of banking in countries is maintained this also stabilize financial markets.

However, the kind intentions of governments to protect savers encourages bankers to look at more risks with savers' money. This is because bankers know that the government will cover their mistakes, since the money risked is insured by way of the state. History has exhibited and proven this reality repeatedly. One recent example would be your recent financial crisis within US where banks who lose savers' money in financial games are bailed out with the Federal Reserve's printed funds.

However, it should get noted that only major banks with political influence are bailed out. For example, Goldman Sachs, JP Morgan, or anything else. For small banks, they're usually gobbled up by the big banks to achieve market share, leading to help oligopolies where they gain greater power. If your prize of risking savers' profit for big banks are bailouts that increase their capital, wouldn't it be fair that deposit insurance protect bankers a lot more than savers?

Also, bailouts increase national debt which definitely ought to be repaid by higher duty. This cause taxpayers to bear the burden where the big banks get the free money to lend people. In the long run, this will increase inflation noticeably. To make it worse, there have been many supply bottlenecks in commodities for many years and this is bound to cause imported inflation for importing countries like China and US. Both of these would add fuel to your fire of inflation, burning the purchasing power of money worldwide faster. site reference: deposit insurance uk With policies strongly tilted towards the interests of bankers and inflation, I don't think saving would be a viable strategy to construct wealth. I believe which during such periods with high expected inflation, investments that will effectively hedge against inflation is better ways to build wealth compared to saving. I may be wrong for this purpose but I believe several of you see the advantage bankers have over us but will take action to create wealth with methods other than saving.