In the event that my bank, which holds a lot of my booty is forced to close for whatever reason, Is true that the FDIC only covers 20% of my holdings? I was informed that the FDIC is for the protection of the bank not the costomer of the bank..

Whatever accounts you have at each bank are insured up to $100,000.  If you had $1,000,000 - you would have 10 different accounts at 10 different banks so that all the $1,000,000 would be insured.  In theory at least.  

In reality, it is the American taxpayer who is insuring your accounts.  You have x amount of essentially worthless script which is insured by the taxpayer with y amount of equally worthless script.  As long as people continue to believe that the U.S. will redeem their paper, your money is pretty safe.  In the event that folks lose faith in the U.S. ability to pay its loans, it will be worthless.

This is not as far-fetched as it seems.  But there is not much we can do about it.

That would be true if you had $500,000 in one account.

IIRC, fdic covers holding of $100,000 per account per person. If you had a checking and savings account, that would be a total of $200,000.

I believe they covered more than that in the S&L bailouts though.

Unless you're a business that needs a lot of cash at the ready, keeping $100,000 or more in a regular bank account is a realllllly poor way to store a lot of money.