Bernanke’s promises to save banks raise false hopes!

Fed Chairman Bernanke’s promises stressed this morning — that major financial institutions will not be allowed to fail — raise false hopes for the American public and fly in the face of on-the-ground facts:

1. Bank losses are now estimated at close to $2 trillion, or nearly seven times more than the remaining $300 billion in the TARP rescue fund.

2. Among U.S. banks and thrifts, more than 1,500 institutions are weak or vulnerable to failure, involving more than $3 trillion in assets. (See our white paper, Proposed $700 Billion Bailout Is Too Little, Too Late to End the Debt Crisis; Too Much, Too Soon for the U.S. Bond Market.)

3. The government’s available resources are grossly overestimated. Already, the proposed federal budget for 2009 projects a $1.75 trillion deficit. Moreover, that projection is based on a GDP decline of only 1.2 percent for 2009, while recently released employment data and World Bank projections clearly indicate a far steeper decline.

Rather than rely on false hopes of government rescues, consumers and businesses should take prudent steps to protect their savings by moving from weak institutions to the many stronger financial institutions worthy of their trust.

For an instructional guide, along with a list of weakest and strongest financial institutions, consumers can download a free Weiss guide at
http://www.martinweiss.com/images/pdf/SMR0250_BankingSurvivalGuide.pdf

Martin Weiss is president of Weiss Research and the only one who warned consumers of nearly all major financial failures well in advance.

Dr. Weiss will present constructive proposals to restore the financial system at the National Press Club on March 19.