On the morning of Sunday June 29, a net rumor was started, alleging that the CEO of Fortis predicted 6,000 banks will fail within 2 weeks. That's more than 2/3 of the FDIC insured banks in the United States. Two weeks later, this has not happened, and the hoax proves conclusively to be false.
On the evening of June 29, I wrote an article predicting that this outrageous claim was indeed an urban legend. In the past few days, my article has been viewed, quoted, and reprinted over ten thousand times, and I have received much criticism (and personal attacks) from people defending the rumor. Two weeks later, only one bank has closed - not six thousand.
It now appears that this rumor was started by, and/or perpetuated by, speculators in Gold commodities. Most of the people who responded to the OpEd News article are indeed from gold commodities discussion boards (the biggest offenders are from the KitCo Gold discussion boards).
In fact, it looks as if a small handful of people, who stand to profit from scare tactics such as this, are coordinating their efforts on discussion boards to spread misinformation about the economy and the value of gold. This is a follow-up to my original article, as well as responses to new information about the original hoax:
TWO WEEKS LATER - HOAX DOES NOT COME TRUE
We're safe. You're fine. Big sigh of relief. I'm digging up the money I buried in the back yard.
For 7 years I have been predicting a collapse of the US economy. Not a complete collapse, but a major correction and restructuring. And people have called me crazy.
Now, in responding to this manipulative hoax, I said the collapse is not going to happen quite yet. And people have called me crazy.
I just can't win. But I'm right.
Let's briefly revisit the original hoax. This urban legend (which misquotes a Dutch news article, and may have been first posted on the KitCo Gold reseller site) contends two basic allegations: That 6,000 US banks will go bankrupt two weeks from June 29 (either Friday, July 11, 2008, or at the latest, Monday, July 14, 2008), and that this prediction was allegedly made by Fortis Chairman Maurice Lippens.
First, the alleged source of the myth: Lippens made no such comment. Did he say the US economy was in trouble? Yes, but that's hardly going out on a limb. It doesn't take Nostradamus to notice we've been struggling with a recession for 7 years. In fact, such a comment is hardly even newsworthy - it's common sense, as most of you have pointed out. But did he say that 6,000 banks would collapse within two weeks (by Friday, July 11, 2008)? NO.
Second, the substance of the myth: Have 6,000 banks gone bankrupt by Friday, July 11, 2008? NO. Let's think about this, folks. There are only about 8,500 banks registered with the FDIC in the United States. Sure, there are a few banking institutions outside this group, but that's the bulk of them. That's 2/3 of our banks.
According to the FDIC, do you know how many banks have closed since June 29? Only one (IndyMac). In fact, only 5 banks have failed in ALL of 2008, according to the FDIC: click here
Are you folks seriously defending this premise? Or, are you just trying to sell your fear (and your Gold)? Let me proceed...
-Was the failure of IndyMac significant? YES. Have 6,000 banks failed? NO. Will they fail by Monday, July 14? NO.
-Might a few more banks close? YES. Did 2/3 of our banks fail last Friday? NO.