I’ve just about lost all confidence in the banking system.  Ben Bernanke lost me at “well contained” and Sheila Bair lost me at “The blogs were a bit out of control” and Paulson lost me at “sound financial banking system.”  But what really broke this camel’s back was this idiot in this video laughing it up while TRILLIONS of dollars in value and cash have disappeared off the face of the financial earth.

The “solution” Congress and the Administration have come up with is to dump the problem on the tax payer.   The only thing I can do to stop the madness is to remove my own liquidity from the system.    I’ve taken the first $50,000 out of the banking system and used the funds to pay some of my mortgage off.   I don’t know what is going to happen over the next 12 months any more but I do know when the dust settles that I’ll have a place to live in when the world collapses in all around me.

Since banks lend out 9 times what they have in reserve, I’m assuming here that I’ve taken out $450,000 in “leveraged capital” from the banking system.   I hated doing this because my existing mortgage is under 5 pct and that debt will get inflated away at today’s real inflation rates but I just can’t be a party to the madness any more.

If things don’t get better I’ll take out another $50,000 from the banking system and pay more of my mortgage off and remove yet another $450,000 from the “leveraged capital” banking system.   I’m still in the process of moving money around but there’s only so much mortgage I can pay off.   The next thing left to pay off is an outstanding loan on my wife’s car.   I’ve already taken a substantial amount of cash out of the banking system a couple of months ago and paid off my other new car.

The last thing on the list is 40k in zero percent credit card arbitrage to pay off but why would I ever pay that off?   That’s my insurance policy against this banking madness.    My spidey sense is tingling and that must mean a new bank run is in progress.    Be careful.