Almost, but not quite...
It means everyone in this country will run as quickly as possible and get all of their money out. This would be a huge mess for the bank because they make money by using your money as liquidity by which to make loans, in which the interest is their primary form of revenue.
Our banking system is a fractional reserve system, meaning that banks only hold 10% on every 100% they loan out.
Let's put it this way: I deposit $100, my bank loans out $1,000.
There is only so much money being held for liquidity, and once that money is gone, there is none left for the people last in line.
"Won't the FDIC give me what the bank didn't have on hand to fulfill their obligation to me?"
Well, in June, the FDIC only held $46 Billion to cover bank failures, and that was before IndyMac went under. There is over $300 Billion on deposit that they would need to cover if everyone wanted to pull their money out of all the banks at once.
A more frightening thought? Consider those checks that credit card companies send out. Say you take them up an offer for $1,500. Well, for that to work, someone would have had to deposit $150 for you to get the $1,500. Say you take that $1,500 and deposit it to your bank account. Then your bank loans someone else $15,000. Then they deposit it to their bank account, and their bank loans out $150,000.
Our currency has no intrinsic value (save for the value or faith you place in it), as we are a fiat currency system- not backed by a gold standard or the ilk.
We don't know how much money is in circulation because The Fed quit publishing M3 reports some time ago, for fear that the public would figure out how bad things really are.
To make matters worse, there will never be enough currency in circulation to pay off the national debt, as each dollar in circulation represents debt plus interest owed to the Federal Reserve.
I digress. If you're interested, search the following:
~The Federal Reserve Act
~Fractional Reserve Banking
~Gold Standard
~Fiat Currency
~The Weimar Republic
The conclusion? Buy gold or silver. Or tangible goods. With the bailout, the value of our currency is about to plummet to $0- it may not be within days or weeks, but it is only a matter of time. How much time is anybody's guess.
As with every fallen economy, eventually, the money will be replaced with something. At that point, I am sure we will openly embrace the Amero.