Last Friday the FDIC shut down First Regional Bank of LA (along with 5 other banks that day). The “traditional assets” were sold to First Citizens bank of Raleigh, NC, but the FDIC chose to maintain control of all the IRAs that 1st Regional held on behalf of its customers.
Up until now retirement funds such as IRAs and 401ks were privately held accounts to which the government had no access. During the budget talks the current administration briefly talked about the possibility of nationalizing privately held retirement accounts so that those accounts could be borrowed against, thus offsetting the need of increasing the debt ceiling by another billion or two dollars.
Of course a few sensible people in congress were horrified by such a prospect and put up a huge stink (all of which barely registered a blip in the American media – I heard about it from Deutche Welle). After the tempest in a teapot, the administration quit talking about nationalizing retirement accounts …
… Until Jan. 29, when the FDIC effectively nationalized the private retirement accounts formerly held at 1st Regional Bank of LA.
One small step for the FDIC. One giant leap for national socialism in the I.O.U.S.A. (to borrow a title from Addison Wiggin and Bill Bonner).