Is Paypal FDIC Insured?

Business
22

Gold is accepted by virtually anyone in society as having inherent value, and it is very easy to use - there is a lot of value in a very small amount of it. Same goes for silver, if carrying around gold is like carrying around hundred dollar bills, carrying around silver is like carrying around tenners.

In a world of high specialization, barter deals are not only impractical, they are quite frankly impossible, as most of the times a collective of people produces a single good. Imagine a blacksmith that produces a pitchfork. The farmer needs a pitchfork, so he offers the blacksmith one sheep. But the blacksmith doesn’t want a sheep, he wants some meat, some potatoes, some tomatoes, and be able to get some iron ore. So now he’d have to exchange the pitchfork for the sheep, kill the sheep, go to the market, and offer pieces of sheep for sale to the potato farmer. But the potato farmer doesn’t eat sheep meat, he wants cow meat, so he exchanges some potatoes for some sheep meat, and then tries to exchange the sheep meat he doesn’t need with the guy who sells cows. But the guy who sells cows doesn’t want sheep meat. Imagine the problems in trying to exchange goods with all the people of interest.

The people of the bronze age found this impractical, and hence, we now have currency. Currency was composed of the most precious of all minerals - gold and silver (and occasionally some others). All currency was “worth its weight in gold”. So now the farmer could sell his sheep meat in the market to whoever wanted sheep meat, then take the gold/silver coins he earnt and buy his pitchfork. The blacksmith could then use that gold to buy some ore for the next tool he’ll make, and go to the market to buy all the food he wanted. A bazzillion problems were solved. The price of gold is whatever the people doing the deal agree the price of gold is.

For us living in the space age, currency would be a necessity, unless several billion people die. The planet just cannot support a nonspecializing population that is required for barter deals to be effective. The chances of this happening are minuscule, we’d need a nuclear war to unwind the world that far.

If there is a major crash that leads to world currencies collapsing, precious metals will, without a shadow of doubt, become the actual currency until confidence in paper is restored.

23

You should never keep more money in your Paypal account than you can afford to lose. Not only are they not a bank, but they have a long history of freezing people’s account for small disputes. I don’t trust them one bit.

24

I only keep money enough to buy something that’s $100 or less from paypal. Still, paypal is not a lender company and more act like a credit card service for people to people transactions. I don’t think they’ll bankrupt in any decades.

25

Returning to the main question (I am not going to go into a “golden” debate :D), paypal is not a bank, and as a private company of course it can close down, but if they do it is because the banks they use close down.

Paypal doesn’t have the same risks as a bank because they don’t give any insterests, or offer loans, or mortgages. They do cash-in-hand trasactions. Their major risk is fraud, but not people that doesn’t pay. They are pretty safe on that size.

Still, I would transfer regularly from paypal account to my personal account, and just keep a bit there… The amount depends if you use Paypal’s debit card or not.

26

if you’re a member of eBay’s internal forums, most sellers recommend NEVER keeping a paypal balance and always siphoning money to your bank account. if there’s a hacking or some kind of fraud suspicion, paypal may put a hold on your account and you won’t be able to touch it after a full investigation. so even paypal themselves are worse than this banking crisis.

27

Your money (frederal reserve notes) itself is not reliable, it is going to be worthless soon. :shifty:

28

Paypal is probably as good as a bank, but I don’t even trust a bank these days. And it is not advisable to keep money or precious metals(i.e gold and silver) at home as that can be an open invitaion for robbery.

29

Paypal is not as good as a bank. I will give my opinions, but first off I want to clear up a few misconceptions I think some people might have:

First, you can store your money in your paypal account, but that’s where the similarities to a bank stop. There is ALOTTTT more to a bank than simply storing money. Banks give out loans, banks take loans, and (the biggest difference, IMO) banks invest your money. By investing your money, this means technically if everyone wanted to take out all their money, they wouldn’t actually be able to give everyone’s money back, they only keep about 20% of their deposits / liquid assets, the rest is usually either loaned out or invested. This is what happened during the great depression, people wanted their money back, but the banks didn’t have it!

Secondly, as others have mentioned, it is not uncommon for paypal to seize money, and not insignificant amounts–they can seize your entire account, and never release that money to you, and you could do absolutely nothing about it. A quick google search will pull up many horror stories of people who have had this happen to them (there’s even a website http://www.paypalsucks.com/).

Because of this, your money is much safer in a bank than it is in a Paypal account. Seeing PayPal as a bank account is not smart.

[offtopic]Also, to the man saying gold is not valuable in its use: Is paper valuable? We’re not on a barter system, we’re on a currency system. The currency does not have any value, and it was never supposed to. It either represents something that actually does have value, or it is promised (by the government in most cases) to be able to be used as legal tender. I just fail to see why the usefulness factor of a currency makes it any worse…because as Dan mentioned, it is very finite and rare, which in my mind is justifies its worth. [/offtopic]

30

I agree with everything Dan Grossman posted about gold.

I think the point that a few are missing is that gold and paper dollars, in terms of functioning as money/currency, have the same purpose: to store value. The question should really be which is best at doing so.

In my opinion, the USD is an unstable store of value and it can be easily manipulated. The exact same can be said for many currencies around the world. Gold, on the other hand, is a very stable store of value and is extremely difficult to manipulate.

What probably confuses many people is the inflation factor as well as what it means to have purchasing power. Also add to that how people are deceived when they are told that inflation is simply a “cost of living” increase - but in truth it is nothing of the sort.

A great example of this is viewing over many years how much gold it takes to purchase a quantity of oil versus how many paper dollars it takes to buy the same: http://www.kitco.com/ind/Turk/images/feb252008_1.gif

Notice on that chart the disconnect between gold & USD which started in the early 1970s. That was actually on August 15, 1971 when President Nixon ended the gold standard. So, 37 years later the price of a barrel of oil in terms of gold has remained virtually unchanged (3 to 4 grams), but in terms of USD we are paying a great deal more. The reason for that is due to paper money, USD, not holding its value. So as each dollar loses value (purchasing power) it takes more of them to make that same purchase.

Governments, in my opinion, abandoned the gold standard because that enabled them to print more money out of thin air and thus taxing the people further via inflation.

31

32

correct me if i’m wrong, but the inflation rate is controlled is it not? the inflation rate is to curb the GDP growth to a stable level, i thought. it’s been a while since i’ve taken economics though, i could be wrong…just wondering.

33

It’s somewhat controlled by the fed which can put money into the economy or take it out. The last many years they’ve just been putting more and more into it (like the hundreds of billions the past two weeks already). Increased money supply means each dollar is worth less, aka inflation.

GDP is a worthless statistic for measuring the health or growth of an economy. If you go by GDP alone, Hurricane Katrina and Ike are good things since they increased spending for rebuilding. Clearly they were not positive events for the economy, destroying huge amounts of physical infrastructure and personal wealth. That increase in GDP contributes nothing to producing anything to sell or export.

34

I always take out all of my money right away.

35

If I’m understanding you correctly, you’re asking if the government sets the inflation rate. The government doesn’t set the inflation rate, but rather calculates it via the CPI (Consumer Price Index) which is published by the Bureau of Labor Statistics.

However, you asked if inflation is “controlled” - I believe that the actual inflation numbers might be. Well, maybe manipulated is a better word to use. It seems to me that the calculation of inflation is really shoddy. The government apparently has been adjusting how it calculates CPI over the years in order to understate it. If you’re interested in learning more on this topic, I suggest you read the following article by Euro Pacific Capital: http://www.europac.net/whitepapers/The%20Truth%20About%20CPI.pdf and also check out the website http://www.shadowstats.com/

The “controlled” numbers that I believe you may have been thinking of are all the various interest rates that are set by the Federal Reserve. The Fed does adjust these rates in order to control the markets in various ways. I believe the concept is that by lowering rates they increase borrowing, which increases money supply in the economy, which then increases inflation - and when that happens they usually increase rates again. It’s sort of a balancing act for the Fed to keep the reported inflation rates right around where they want them to be.

Currently, I believe the Fed is somewhat stuck in regards to rates and has been for a few months. If they go much lower they risk causing a great deal of inflation, but if they go higher they risk significantly damaging the economy because higher rates would result in less borrowing, resulting in less money supply, resulting in an overall contraction. It could be that all these various recent “bailouts” are because the Fed cannot take care of this issue any longer by playing with the rates. What a mess. And to top if off, the Federal Reserve, from what I’ve read, is a quasi-government organization due to it being privately owned.

36

yes, manipulating the rate is what i was talking about, not setting it directly.

37

PayPal is not a bank.that’s right!

38

I’ve had a Paypal business account for over 5 years, and the other day Paypal suddenly decided I was ‘unverified’ - at that point, I was only allowed to withdraw or send another £89. My balance at the time was over £3000.

Verification involved me setting up bank funding/direct debit, which I didnt really want to do for security reasons. It was complicated by the fact that my Paypal trading name doesn’t match my bank account name and hence Paypal wouldn’t let me set up the transfer correctly. In the end I had to change my paypal trading name for a week until the bank was set up, then change it back again.

The whole process made me realise just how my money is at their mercy. I now extract funds every few days - I’d drop paypal completely, but my customers love it and it counts for 1/3 of my transactions. I also dislike their rather sneeky exchange rates, which are always incredibly poor compared to the rates I get from my HSBC merchant account (which are very close to the mid-market rates). Exchange rate differences alone cost me over £100 a month, plus paypal charge 0.5% more on cross-border transactions.

39

yeah i WOULD NOT KEEP MY MONEY IN PAY PAL FOR PERIODS OF TIME. . .

one time i got XX.say23 cents

i took out XX and left the pennies in my account and a few months later i went to check out again and THERE WAS NOTHING THERE . . . and some one else i dont really know who ( bad memory ) but they told me if you leave the money in there for long enough they will return it to the sender . . . i dont know if thats what happend BUT I DO KNOW i lost a few cents one time and now I TAKE IT ALL OUT IMMEDIATELY !

HOPE THIS HELPS !

40

I’ve had my account for more than 8 years and they’ve never returned any of my money to a sender. I’ve had 5 digit balances in there at times. Since I move more than $200,000 through the account per year, it’s all balanced in Quickbooks and there’s never been a penny missing.

41

No you don’t. The Western financial system is very close to collapse and things are getting worse by the day