PAT DALRYMPLE
BANKERS HOURS

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August 24, 2014
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The government does have its useful moments

Now that things have settled down, and the recession is fading into the sunset, we’re waking up to new realities in the financial world (and, yes, the sun did in fact come up every day since September 2008).

There have been many changes, and we’ve covered them for some five years in this column. But some things haven’t changed. Revolution and chaos didn’t descend, the United States is still the pre-eminent power in the world, and it continues to be a financial haven for foreign investment.

The primary reason that the apocalypse did not envelop us is …

The United States government.

There, I’ve said it. Surprising, isn’t it, coming from this corner. I’ve taken more than my share of pot shots at the feds, bank regulators and government wonks. Hey, it’s fun, and the whole apparatus is an inviting target.

But a political system need only do two or things right to justify its existence, and outweigh a surplus of stupid.

One thing that the feds do right is insurance for bank deposits. In the Great Meltdown, nobody’s bank account melted away, if their accounts didn’t exceed the insured amount. And, in most cases, depositors came out whole, even if their accounts were above the insurance coverage.

A safe and stable banking system is essential to an intertwined world economy. It’s not a stretch to say that it’s vital to modern civilization as we know it.

I have a friend who proudly announced a few years ago that he’d buried cash in his back yard.

“Why?”

“Because, if the banks fail, and I can’t get to my checking and savings accounts, I’ll have money to live on.”

I had to tell him if the banks fail, and you can’t get to your cash, it means the U.S. government has failed. In which case you might as well have dug a hole for a case of Charmin, because there would be only one use for paper money, and Charmin does a better job of it. If you’d buried coins, well, you’re just out of luck all around.

Money is a commodity with no intrinsic value. Coffee beans are worth something. Money isn’t unless the nation that stands behind it is viable. After the Civil War, a lot of folks saved their Confederate bank notes for quite a while, but the South did not rise again.

So, we have to remember that the objective of federal bank regulators is simply to ensure that your money is there, always. They’re sort of like ants, sometimes irritating beyond endurance, but necessary.

For the few of you that read this column, let’s just keep this positive commentary about the gov’mint between us. After all, I have a reputation to maintain.

We’ll return to our regularly scheduled programming with the next article.

Pat Dalrymple is a western Colorado native and has spent almost 50 years in mortgage lending and banking in the Roaring Fork Valley. He’ll be happy to answer your questions or hear your comments. His e-mail is dalrymple@sopris.net.


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The Post Independent Updated Aug 25, 2014 06:54AM Published Aug 24, 2014 10:04PM Copyright 2014 The Post Independent. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.