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With the calendar not even 1/3^rd of the the way through the year, when four more U.S. banks were shut-down on Friday, this brought this year's total to twenty-nine. This already exceeds the total number of U.S. bank failures for 2008.

The bank-bankruptcies cost the Federal Deposit Insurance Corporation (“FDIC”) another $700 million. As the FDIC pay-outs climb, this brings it closer to needing ANOTHER large cash-infusion from the Federal government. The FDIC has already promised to increase the insurance premiums it requires U.S. banks to pay – which are supposed to cover all these losses. This will eat into bank capital even further.

Perhaps the most significant news from the latest set of U.S. bank failures is that this time the FDIC could not find buyers for all these banks. The largest of the four, First Bank of Beverly Hills, had to have its depositors bailed-out entirely through FDIC insurance. Because not all of those deposits were covered by FDIC insurance, deposit-holders will lose about $179,000.

This will undoubtedly make both depositors, and the banks themselves increasingly nervous. For depositors, the specter of possible losses will make them very leery about leaving their money in U.S. banks. For the bankers, not only will the increased unease of depositors add to their own anxiety, but now they also have to worry about their banks becoming “orphans” should they fail – rather than the relative security of being confident that a buyer could always be found in any “worst-case” scenario.

The result will be that bankers and depositors alike will become more conservative. Depositors may choose to either keep some of their money in their own possession, or invest it into tangible assets (like gold) – to eliminate the possibility of these paper losses. Banks will reduce credit lines further, and reduce conventional borrowing. They may also “call in” loans at an earlier stage of default than previously.

The final observation about this latest series of U.S. bank failures was that the Bank of Beverly Hills operated in one of the most affluent districts in the United States. Not only did the general affluence of its customer-base not save it – but there were not even any interested buyers.

If events like this can occur in the wealthiest segments of U.S. society, this clearly illustrates the severe weakness of the entire U.S. banking system, no matter what lies come out of the mouth of Tiny Tim Geithner, and the rest of the dishonest stooges in the U.S. government.

The collapse of the U.S. housing market isn't even close to the half-way point yet. Defaults on commercial loans and consumer-credit loans are just beginning. This means that U.S. bank failures are also just beginning.

This also means that yet another, large bankster-bailout is looming in the near future. Forget about the utter nonsense that the “TARP” money is sufficient to deal with bank losses. That money has already been spent several times.

Unless there are once again private investors who are suicidal enough to put money into U.S. fraud-factories, then another trillion-dollar hand-out can be no more than weeks away.

This also adds a little more drama to the farce of “U.S. bank stress-tests” (see “Geithner's stress test comedy approaches final farce”). As I pointed out previously, the short-sighted, knuckle-draggers who came up with the idea of this sham now realize they are in a “no win” situation.

Tell the public that ALL U.S. banks are healthy, and not even the market “sheep” would believe such an outlandish lie. Admit that some banks are weak, and those banks will be crucified by the market (and then likely cannibalized by the U.S. financial crime syndicate).

The worst possible choice would be to admit that some U.S. banks were weak, but refuse to divulge which ones. This would then cast doubt over the health of ALL, U.S. financial institutions, and they would ALL be “punished” by the market. Since the health of virtually all U.S. banks is suspect, such suspicions would be “healthy” for investors.

Since this is the worst possible option, this makes it likely to be the choice of the bumbling, errand-boy, Geithner.

Ultimately, the U.S. government still has no plan, other than to stall for time (through an endless series of lies), and then hope that some miracle will occur to end this economic collapse.

Unless you believe in “miracles”, do not put a penny into a U.S. investment.

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