Record withdrawals at U.S. banks as Americans lose trust in financial system
by: Ethan A. Huff
Thursday, January 31, 2013
You probably haven’t heard much about it from the mainstream media, but the latest figures released by the privately-owned Federal Reserve (FED) indicate that America’s largest banks saw record cash withdrawals during the first full week of January 2013. As reported by Bloomberg Businessweek and scant others, account holders withdrew a record $114 billion in just one week, which represents the largest one-week withdrawal sum made in America since the September 11, 2001, terrorist attacks.
The data, which accounts for all cash withdrawals made from the nation’s 25 largest banks, has reportedly shocked many financial analysts who say they are unsure exactly what sparked this minor bank run. Some have speculated that the December 31, 2012 expiration of the Transaction Account Guarantee (TAG) insurance program, which was designed to protect smaller banks from insolvency, may have played a role in triggering what appears to have been a wave of panic withdrawals.
But since the bulk of these withdrawals were made at larger banks that were not covered by TAG, this explanation hardly suffices. Another more likely explanation is that Americans are simply unsettled with the current state of the financial system, and for all intents and purposes are trying to protect their own assets from insolvency. This is further reinforced by the fact that a similar run on “physical” gold escalated around the exact same time, suggesting that depositors are anticipating rocky times rapidly approaching.