How to “get into cash” ??

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  • Thu, Oct 09, 2008 - 10:28pm

    #21
    Maldek

    Maldek

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    S197

2001 in argentina this banking holiday did last a few MONTHS…not days.

This was done to prevent brank-runs.

"My point is not that the FDIC will never fail, my point is that if the FDIC fails, your dollars will be good only as firewood (see Zimbabwe).  The second a banking institution fails and a person walks out with anything less than their $100,000 check, there will be a massive run on every bank in the "

The result was they lost 2/3 of value when banks did re-open due to inflation. All pay-checks also have been reduced to 1/3 in their purchasing power. Cost of living on the other hand didnt get cheaper. Thats how you transfer a first world country into a 3. world country. Think about it.

 

  • Fri, Oct 10, 2008 - 12:39am

    #22
    S197

    S197

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    Maldek

[quote=Maldek]The result was they lost 2/3 of value when banks did re-open due to inflation. All pay-checks also have been reduced to 1/3 in their purchasing power. Cost of living on the other hand didnt get cheaper. Thats how you transfer a first world country into a 3. world country. Think about it.[/quote]

 Yes, I’m aware of that which is why I said:

 "What will your $100,000 buy in this scenario?  Probably not much, but you’ll get your check.  I bring this up only to illustrate that if the FDIC fails, our fiat currency whether in Wells Fargo or buried under the dog house will be virtually worthless.  So you may as well leave it in an institution with government backed insurance.  You get no insurance digging a hole in your backyard."

 The question was asked where to park Cash.  My response was in an FDIC insured account.  Why?  Because whether you have it in a bank or under your mattress it will be devalued either way should the FDIC fail.

 Yes, Argentina had a very long banking holiday.  And it costs over $50 billion Zimbabwe dollars to buy a loaf of bread.  But we’re talking about the US so maybe some apples to apples comparisons would be more helpful?   

  • Wed, Feb 11, 2009 - 06:27pm

    #23
    1440 minutes

    1440 minutes

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    S197

If the dollar suddenly lost one-third of its value in order to cover massive runs on the banks, then I could see why that might suddenly transform the USA into a third world nation, but I don’t think that we would be at the point of burning dollar bills to keep warm.  Am I missing something? 

Good point that the FDIC probably would shift the printing presses into overdrive in order to cover deposits in case of a major run on the banks.  However, shouldn’t we assume that the bureaucrats would screw this up (Katrina, Iraq, etc.)?  If so, then how long would the banking holiday need to be for the bureaucrats to get it right?  Days?  Weeks?  Maybe repeated holidays as more and more screw-ups emerge?  If the banks were going to be closed repeatedly and/or for quite a while, then wouldn’t that be an argument to keep some cash outside of the bank?

 

And what if there were frequent rolling energy blackouts (or worse)?  ATMs, computers, etc. wouldn’t work.  Probably the branch offices of banks would close along with every other business establishment.  Wouldn’t that be a reason to keep money outside of banks in addition to having energy backups in our houses?  As long as people saw the power restoring intermittently, then wouldn’t cash come in handy?

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