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$75M FDIC Coverage?
2 points by churchill on March 13, 2023 | hide | past | favorite | 2 comments
Rho.co claims to offer up to $75M FDIC coverage by splitting their customers deposits to a network of 400 banks. But, I know arrangements like these usually work until they don't. Is this a safe bet, given last week's events?



It’s more that you won’t need them because if the govt is serious about stopping bank runs it will raise or eliminate the cap.


Well, there is nothing that can prevent a bank run: at times of crisis when bank would suffer a bank run, when trust in currency is lost, government can only print out more money, thus deflating the value of a dollar.

Which is when people will still want to convert to something that is better guaranteed to preserve value: prompting a bank run!

US has so far resisted this because it's such a huge economy that nobody wants to see default on its debts (all foreign debt it has is denominated in USD), and as dollar drops, everybody starts buying in the US.




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