If The Economy Collapses Is My Money Protected

If the economy collapses, is my money protected? You should be really concerned about this, given all of the political dynamics, the recession, interest rates, the collapse of the Silicon Valley Bank. Do you know? Is your money protected? Do you need to spread out in banks? I brought the smartest man I know to this conversation today to give us the most, I'd say, detailed insight. So Kelly Korshug is a world-leading economist, mathematician, great analyst, worked for the Deutsche Bank, oversaw billions of dollars, and he's here to tell you, is your money protected or not? So let's continue this conversation about banking and the economy. Specifically, I'm going to talk about three things today, and I brought with me Kelly Korshug back, leading expert in money, banking, finance, the actually architect of iFlip, which is an AI-driven software. You can grab a copy of it in the description below. We're going to talk about these three things, FDIC insurance, is it real? Can you trust it? The economic collapse versus bank failures, what's going to happen? Other forms of protection in general. And then Kelly, I got to have you at the end of the video talk about the U.S. dollar and the value and the speculation that it's going to crash. So welcome back to our YouTube channel. Good to be here, Laura. So one by one, let's knock these out. So if the economy collapses, is my money protected? Talk about FDIC first. Well, obviously, that's a very broad term. If the economy collapses, I think it's a matter of extent. However, in general, if your monies are in a bank or in a stock market account, they're protected by the federal government. If it's in a bank, they're protected by the FDIC, the Federal Deposit Insurance Corp. That was something formed in the 1930s under FDR when the banks collapsed back then and we had the Great Depression, up to $250,000. The same is true by the Securities Investment Protection Corp, SIPC, if your money is in a trading account like Charles Schwab or TD Ameritrade, Fidelity, et cetera. Both of those agencies will insure your assets, cash or securities up to $250,000 each. If the economy collapses, as it did, for example, in 2008, clearly, even though the FDIC went broke at that time, in other words, the FDIC had only $40 billion to be able to cover the collapse of the accounts. And obviously, the amount of the collapse at that time was a great deal more. What did the Federal Reserve do? They basically immediately lowered interest rates and they stood behind the stocks and the securities of the companies that were affected, the banks and securities firms that were affected, and ultimately some of which went out of business. So that was a pretty bad time in the 2008 financial crisis. And yet, the government did come through and protect those assets, as just mentioned, up to under that collapse. If the collapse is broader than this, it would devalue the dollar, which means that maybe you would probably still get your money from the FDIC or SIPC. However, if it was local, which I doubt it would be, but if it would be local, you wouldn't be able to travel to Europe or abroad easily because the value of things would become much more expensive somewhere else. I think in today's age, a collapse in the United States ultimately means very similar to the same thing that would happen in, say, Europe, which would affect all of us equally, meaning that we probably would be okay. But it is a scenario that is very difficult to perceive that the economy could completely collapse. Now, my own perception is the economy will have some rough times as we try to wean ourselves off of all the stimulus that the government put into the economy since the beginning of COVID, especially now that we have to do it at higher interest rates. So this is a time to be very concerned about these things is a very important topic, and it has many kinds of various outcomes. We would be able to survive. However, with the higher interest rates, I think it becomes much more difficult for us to survive them without a much greater amount of pain than I think we faced in 2008, 9. So again, all of this is a matter of degree. So with some of the political, I say, efforts that are going on in China, Russia, Brazil, lots of countries actually making announcements, whether they're going to do it or not, or threats, I'd say is better than announcement that they're going to move away from the U.S. dollar. How does that affect the economic potential of a collapse? And again, the U.S. dollar devalue? This is probably one of the most serious problems of our day, and this deserves a lot of talk. And I hope to have further conversations on this in the future. What's happening now, and I think everybody sees it, again, this is a question that requires opinion, is that a society is only as strong as they are united. If a society is bifurcated, which is what I feel it is today, then it is weaker. And this is why Russia, Iran, China, certain countries in Africa, and now to a strange macabre event, possibly France, pointing out that the U.S. dollar may not be the best place to have a reserve currency for the world to depend on. This is occurring because in this country currently, having a united, a divided society is stemming from a divided government. And generally for the markets, a divided government is generally a good thing for the markets. But when it gets to an extreme, it is not. And this means that this has serious impacts for the dollar going forward. I feel that the dollar just came off of all time highs. I think people maybe four months ago, remember that the dollar was at literally above par against the euro currency. The euro currency went to 96 cents. Most of my life, I saw the euro at about $1.30. Now the euro is about $1.11, which is saying that the United States slowly has, the dollar has slowly come off of its highs. And now that these countries are starting to unite that are essentially considered our adversaries, it will weaken the because the combined power of China and Russia and some of these other countries, their currencies do match the dollar because their economies are about the same size. The sum of the Russian economy, which is small, but with China, it is larger than the U.S. economy. If for example, India or even another country comes on board, then obviously we would have potential adversary that has a stronger base set of values and currency than we do. And that changes the reserve requirement around the world. It means the dollar is no longer the stable currency. Monies would outflow from the dollar. The dollar would get weaker. And that would also be very, very inflationary. It would mean that we would have to now buy any imported So there's definitely a problem ahead going forward when we see the other countries that are perceived adversaries, adversary or not, they are perceived that way by both sides of the aisle in this country. And that means for a weaker dollar. And by the way, this is an extremely concerning issue because this could be a long-term decay of not just our currency, but of our country in general. Yeah, it's a long recovery. We're going to talk about protection next. Before we do that, I want you to subscribe to my channel, click that notification button. And in this conversation, you need to share this, not with five or 10 people, with 20 or 30 people. The more you get educated, the more you hear five days a week, we talk about business and finance. If there's a topic you want me to talk about that you can't find in my search bar or on our playlist, just put it in the comment section below and I will be right back with you. Again, make sure you grab the iFlip app. It's a free app that you can go grab and think about moving some money over there, especially out of Robinhood. I always have to give that little plug, Kelly. So what do people do? They're probably eyes are wide open now listening to this video. What's some protections that they could and should be thinking about? Well, the first thing I could say is at least on the iFlip portfolio, one of the things I'm in the creation mode for right now is an ETF inspired dollar smartfolio, which basically means if you were to buy it, you would be betting against the U.S. dollar. If you were to sell it, you would be betting for the U.S. dollar. This would be a portfolio where the best way to protect yourself and the value of your dollars, which if you're a U.S. person, your dollars have a value, but your dollars have a value only in terms of another currency. So for example, if the dollar decays against other worldwide currencies and we have inflationary problems, it may not affect what we're doing. If we don't go overseas, we may not notice it. What we would notice is an inflationary aspect in our country. However, if you want to go a step further and protect your U.S. value, your U.S. wealth, so that it has a commonality against the wealth of other countries, then we would want to own a product that has some appreciation if the dollar were to go lower. So for example, there is some contracts out there, for example, in ETFs called EUO, Edward Unicorn Oscar, and that is a product that essentially measures the euro currency against the dollar. When you buy that particular ETF, you are literally buying a euro. So there are ways within the equity markets to participate in global macro events. For example, oil, of course, we all know that oil is a global macro commodity. Everybody uses it. And so we have a symbol for that called OIL, O-I-L, that you could buy or sell. So the same thing is true of worldwide currencies. The question is how best to do it and which currencies should we be doing this against? My instinct is that most of us in this country travel no really further than Europe, maybe to some parts in Asia. And the way to protect your currency so that it has the same value somewhere else as it does today would be to own these other kinds of so that in the event that our dollar depreciates, these ETFs go up and you could hedge your entire wealth in such a manner. This is not for the faint of heart, however, and it should be thought of with caution. However, that doesn't mean that certain people shouldn't be able to take advantage of that inside their general stock accounts, whether you're with IFLIP or others. The difference is, again, going back to IFLIP, is it will be created using a certain technology that will try to do its best job to manage the events should the dollar really, truly depreciate in the coming years, which I suspect it probably will. And or even if we're wrong, if the dollar stays steady in here, great, then we shouldn't be able to lose any money if we did it. We would just lose the opportunity cost of putting it somewhere else. So that's how I would go about it. You're brilliant, Kelly. Thank you again for being here. We're going to have you back as this economic and the dollar value and all of this investing conversation continues. I appreciate you being here. Again, get that IFLIP app today. If you have any questions, go to askloral.com, A-S-K-L-O-R-A-L.com. Ask a question, make a request. We'll see you tomorrow.