As long as you don’t see double digits, US treasury is not yet bankrupt and can borrow to replenish FDIC.
If you start seeing double digits, it is “red alert” time and you should convert your $ to other currencies or assets since the money will be rapidly losing value.
(Last time this “red alert” was reached was during 1979-85 see http://finance.yahoo.com/q/hp?s=^TYX&a=01&b=15&c=1977&d=07&e=25&f=2009&g=m&z=66&y=0 )[/quote]
Using bond rates as a measure of risk for your deposits is insane especially when the biggest Treasury buyers are the Primary Dealers and the Fed. That’s manipulation of your risk market and by the time you’d see the risk hit double digits it would likely be too late to do anything about it.
Also if you are using the 1979-1985 scenario as a reference in that case you would want to load up on long term Ts hand over fist at high rates. You’d be living well off of the up to 18% interest the taxpayer is paying you long term. Another much much less likely scenario would be rates don’t peak at a reasonable/profitable level (much higher) and the currency collapses. Then money wouldn’t matter anyways in a Mad Max scenario like that.
For the purpose of this thread I would be very concerned that the organization insuring my deposits may not be able to pay out and the gov’t may not be in a position to help at some point.
