That's why it's considering assessing a special fee on the banking industry in the second quarter of 2009. The fee would be around $0.15 per $100 of deposits, in addition to the regular fee, which is $0.12–$0.14 cents per $100 for most banks.
An American Banker article said today, "A diminished fund could undermine consumer confidence in deposit insurance. Such an outcome would be catastrophic for the banking industry if consumers began running on banks." If fractional reserve banks weren't inherently insolvent, you couldn't run them. If deposit insurance really worked, a bank run wouldn't be a catastrophe. Fractional reserve banking and deposit insurance are complementary frauds unraveling in tandem.
The FDIC's perennial inadequacy has two clear implications for investors: inflation and insolvency, the twin opportunity-creating dangers.
First, the FDIC's inherent insolvency provides another incentive to create money. Camden Fine of the Independent Community Bankers of America, realizing the new FDIC fee would punish small banks worse than large ones, says, "The FDIC should just cut out the middle man and go directly to the Treasury to recapitalize the [Depositors Insurance Fund] and not assess thousands of banks that had nothing to do with this mess." He's right. Inflation is the only way out.
The other implication of the FDIC running out of money is that our inherently insolvent fractional reserve banking system is in the painful, drawn-out process of being found out. FDR's New Deal is unwinding, decades after the crime was perpetrated, the same way communism fell apart, decades after it was erected.