As the big banks fail, we learn the truth to trickle down. Failure always crushes those at the bottom. Crushes them first, more, and longer.

Let us suppose that you are a very cash rich person, but cautious. You have several hundred thousands of dollars in savings. Lucky, huh? You have put this money into several FDIC banks, making certain to keep under the 100K limit. With each collapse you feel nervous, yet comforted that the government stands behind the market. It is after all government money, remember you aren’t permitted to print your own. Soon though you realize that there aren’t many big banks remaining. Your distributed strategy seems to be collapsing too. As two banks become one, what happens to your formerly separate insured accounts? Wachovia and Citi, like amoeba, or jelly fish bobbing in the Chesapeake.

With each collapse you have fewer insured choices, and for a time uncertain, you may have account totals above the FDIC limit. Step quickly. With the Newt’onians afoot in DC it may be time to check out those overseas banks. If you play the game, know the limits of the board. This game is being reset, and not to your advantage. The theory is flawed. System Failure is the only guarantee.