How to “get into cash” ??

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  • Tue, Oct 07, 2008 - 12:23am

    #1
    barrt

    barrt

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    How to “get into cash” ??

Hi all, im hoping to start a disussion on how to manage cash, please let me know your thoughts

Chris, and many others, are predicting a period of deflation and to me that sounds about right, sure looks like it at the moment! The accepted smart thing to do in the face of deflation is to;

1 Sell stocks
2 Sell gold (while perhaps holding on to a little to hedge against the possibility of inflation/ hyper inflation later on)
3 Hold cash (with a view to jumping back into gold when inflation comes later and much later on, back into stocks)

Ok, so ive done the first 2, no problem. I now have a fairly large cash balance in the bank! YIKES!

So, what ive done is to spread it around a bit between a few different banks so that im covered by the goverment bank deposit insurance. But, im starting to feel a bit worried about that, the Govt cant pay everyone back if many/ most banks go under which is certainly possible. The 2 banks i have savings with BOTH look shakey now!

So, whats my options here? somehow walking out of the bank with a suitcase of cash and hiding it in the back yard doesnt seem like a possibility, but i cant think of anything else!

Mesaage to Chris;
Hi Chris, please hurry with the final part of the crash course!, we need to know some sensible precautions we can take and we need it fast, the whole system is circling the toilet bowl now and we dont wanna go down with it!

How can we protect our savings? any ideas anyone?

Surely its not piles of cash under the mattress time, there must be an alternative no?
HOW CAN I PROTECT MY BANK BALANCE???????

Good luck everyone!

  • Tue, Oct 07, 2008 - 12:35am

    #2
    switters

    switters

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    Not everyone (including Chris) would agree on selling gold

There are many, many experts out there who believe gold and silver are a good way to preserve wealth in both deflation and inflation.  In Chris’s recent post predicting a deflationary collapse, he mentioned at the end of the article that he still recommends holding gold.  I’ve read several articles over the past few days by financial experts suggesting the same thing. No one is selling physical gold at current prices, and that’s one reason there’s almost no supply whatsoever.  

I’m taking cash out of the bank and hiding it, but I suspect you have a lot more to hide than I do.  I have more of my money in precious metals, also well hidden.  

Chris suggests keeping 1-3 months living expenses in cash at home, and spreading the rest of your money across 2-3 very highly rated banks.  You can use Bankrate.com’s "Safe & Sound" ratings as a starting place; I believe Chris mentioned another rating system but I don’t remember which one.

 

  • Tue, Oct 07, 2008 - 09:57am

    #3
    barrt

    barrt

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    Thanks for the Bankrate tip

Thanks for the Bankrate tip switters, but does anyone know an equivalent rating system for UK banks? its getting VERY scarey over here now. (7th October) Royal Bank Of scotland is down 30% today and they have half of my savings!!

Deflation isnt very easy to understand, for me anyway. Not like inflation which we have all grown up with. But doesnt deflation mean that even your gold is going down in value? so in a deflationary period the only thing to hold is cash? I too have read ‘experts’ saying to buy gold,, ive also read others saying GET INTO CASH which seems right as everythign is going down down down, silver is way down and gold is only going sideways. If the ‘buy gold’ call was right then it would be going up now, this is the time for gold to be shooting up no? deflation looks most likely to me

If i wasnt worrying about deflation, i would have perhaps up to 70% of my savings in gold, instead im at about 15% in bullion with the rest in banks! scarey, which way to run?

Looking forward to some good advice, at last, from the last instamment of the crash course, any news Chris? and keep up the good work 🙂

  • Tue, Oct 07, 2008 - 09:58am

    #4
    barrt

    barrt

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    doh! how did that post go

doh! how did that post go above your reply? Frown

  • Wed, Oct 08, 2008 - 06:19pm

    #5
    csadvisor

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    Article on Deflation

 

The link below gives a good explanation to the issue of deflation.  The way I think of deflation is to consider you are airing up a tire that has a leak in it, as long as you keep pumping (expanding available credit) faster than the leak (decreasing available credit) the tire continues to inflate.  When you stop pumping (money isn’t loaned/nobody borrows) the tire (economy) delates.  Check out the link to a pretty good article on deflation and its causes.

 http://www.elliottwave.com/deflation/

 

  • Wed, Oct 08, 2008 - 06:29pm

    #6
    switters

    switters

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    There seems to be a 50/50

There seems to be a 50/50 split between analysts who are predicting deflation and those who are predicting inflation.  Mike Shedlock over at Mish’s Global Economic Analysis blog is absolutely certain we’re entering a deflationary period and that all Fed attempts to avoid this through printing money will be unsuccessful.  He argues that no matter how much money the Fed prints, they can’t force banks to make loans or consumers to want them, and if loans aren’t being made the money supply decreases.

Others predict a mixture of inflation and deflation, and still others predict hyperinflation from the get-go.  Nobody really knows what will happen, but many seem to agree that the long-term result (even if we have deflation for a couple of years) is hyperinflation and a big decline or total collapse of the dollar.

  • Wed, Oct 08, 2008 - 10:56pm

    #7
    barrt

    barrt

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    i think we can agree on one

i think we can agree on one thing, that its not clear as to whether we are going to suffer deflation or inflation. Its probaly wisest to accept that fact in my view.

Keep your options open and dont allow yourself to convince yourself if there is no real way of knowing

 it still doesnt answer my original question thouigh of How to get into cash? sell everything sure, but that just leads to a larger bank balance, which is not cash, its a liability of the banks and in the current situation is a big problem, yor cash could dissapear

so how do i turn it into cash? walk out of the bank with it in a plastic bag/ small suitacse?

 before this trouble banks would only allow you to withdraw 500 of your own money, would they now allow you to walk out with 5,000? 10,000? in a bag? i cant see it soemhow

 so, how do i protect my savings? anyone?

 

  • Wed, Oct 08, 2008 - 11:19pm

    #8

    EndGamePlayer

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    Adding it all up . .

So I go shopping and realize – I just paid 6.5% tax on what I bought.

I pay 15% income tax and just saw a new tax pop up on the gas I bought to get there (2%). I pay taxes on my house ($1,000+) a year and I pay 6% on my home loan

15% on my credit cards (more than that if there are no late fees) and when I use my credit card to buy something, the retailer has hidden a 4% transaction processing fee in the goods I buy. 

THAT’S 48.5% of my money going to taxes, interest and hidden fees – So how the H_LL can these people NOT HAVE MONEY?!!!

 

 

  • Thu, Oct 09, 2008 - 12:13am

    #9

    PeasantFarmerCFP

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    Stealthy cash withdrawals

 

I’d be nervous walking out of my bank with a duffel bag full of cash, too. Fortunately my net worth is all tied up in my highly leveraged house. If I were you, I would go to the bank weekly (or however often they’ll let you) and withdraw as much cash as you can fit neatly in an envelope. Small business owners with merchant account do this all the time, why shouldn’t they let you? I talked to a manager at my WaMu branch and he said they were dispensing up to $8,000 per client per day before the takeover. For stealthier withdrawals:I’ve been telling friends/family to use debit cards for everyday transactions and ask for cash back on every purchase. At least here in Seattle, you can go to any supermarket, buy something and then debit your account for up to $100 in cash back per day per account. If they’ve got a self-checkout with a cash dispenser, you won’t even attract attention from the store employees. Do that every day for a month (or forever, until they shut down the banks) and you’re building an emergency fund without having to walk into the bank and pull out stacks of cash in front of curious onlookers.  Now, if you can figure out, how I can get my house to start dispensing $100 in cash per day—while still allowing me to live there—I will bake you a dozen chocolate chip cookies.

 

  • Thu, Oct 09, 2008 - 01:50am

    #10
    ladamski99

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    You can also see about

You can also see about getting your ATM/Debit limit upped. Just call the bank and ask, can’t hurt. In my younger, crazier days I asked my bank to raise my limit to 3000 daily for a trip to vegas and they never put it back down. Now you might have to visit more than 1 atm, but it could still work.

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