Moving dollars from savings to the drawer

[KenJackson]

These days, the best money-market savings accounts in the nation pay less than 1% interest. Most pay a lot less.

We know some big event is coming--at least a major stock market correction if not a total loss of confidence in the dollar. That may cause a "run on the banks" (though I wonder what that means in this increasingly digital access world). So for a while, it may be impossible to get currency from ATMs, and there may be hiccups with credit cards.

In light of all this, it just seems wise to keep a bundle of 20's hidden at home instead of in the bank. And thanks to the Fed, it doesn't cost much in lost interest.

In the long run, I guess everyone here probably agrees that silver coins and rounds would make more sense. But I doubt there's a single store in my area I can walk into today and get more than 25 cents worth of stuff for a silver quarter. It's going to be a while before stores, at least on the east coast, accept silver as money. (Do any stores in Utah accept 1ozt generic silver rounds yet?)

[Cebu_4_2]

I wouldn't keep any sort of money in a bank or otherwise that turns into digits in a machine. You are much safer buying a big ass hunting rifle safe and keeping your valuables in that and not in digits.

[Glass]

yes you need to strike a balance of cash on hand and some savings that are not in a bank.

I maintain a transaction account to pay bills but everything else is somewhere else. I figured rounds might be usable for trade if they are small enough. I doubt you will find your regular store is going to be into accepting silver rounds. You need to find someone who is in the know. Either do it now while things are still ok or try your luck once SHTF.

Any farmer markets or similar near you?

[KenJackson]

I doubt you will find your regular store is going to be into accepting silver rounds. You need to find someone who is in the know. Either do it now while things are still ok or try your luck once SHTF.

Interesting. I have the opposite take.

ShadowStats (http://www.shadowstats.com/alternate_data/inflation-charts) claims that the real inflation rate, calculated as it was in 1980, is about 9% today. Grocery stores in particular are sensitive to inflation because they work with narrower markups. So they have to be constantly increasing prices (except for packaged goods that constantly reduce the content for the same size package).

When the SHTF, as you say, the real inflation rate may jump a lot higher, which will place a big burden on stores, especially grocery stores, to have to markup prices even faster. They may start posting prices on grease-pencil boards and update them with every delivery. It's only then that some stores will start thinking about accepting silver.

So I expect to need the bundle of dollars to make it through the transition period. But eventually in this scenario (though I still have difficulty picturing this) many stores will start accepting silver, probably grocery stores first.

[Glass]

Interesting. I have the opposite take.

ShadowStats (http://www.shadowstats.com/alternate_data/inflation-charts) claims that the real inflation rate, calculated as it was in 1980, is about 9% today. Grocery stores in particular are sensitive to inflation because they work with narrower markups. So they have to be constantly increasing prices (except for packaged goods that constantly reduce the content for the same size package).

When the SHTF, as you say, the real inflation rate may jump a lot higher, which will place a big burden on stores, especially grocery stores, to have to markup prices even faster. They may start posting prices on grease-pencil boards and update them with every delivery. It's only then that some stores will start thinking about accepting silver.

So I expect to need the bundle of dollars to make it through the transition period. But eventually in this scenario (though I still have difficulty picturing this) many stores will start accepting silver, probably grocery stores first.

ok I don't think we disagree significantly. I also think there will be a transition period. I guess it's determining what amount of what form of money you will need and when. I figured there wouldn't be many stores operating. I expect it will be mostly horse trading, barter from whom ever but probably not many stores. It depends on what kind of shtf I suppose or what point in time.

We are getting the message that we are going cashless down here. Credit cards when completely paperless july 1 so the concept of negotiable instruments has become 100% virtual. I suspect we might be one of the first countries. The key word is Reset. Everyone is talking about a Reset. Global Reset.

[gunDriller]

In light of all this, it just seems wise to keep a bundle of 20's hidden at home instead of in the bank.


in a 2-hour safe.

[Horn]

We are getting the message that we are going cashless down here. Credit cards when completely paperless july 1 so the concept of negotiable instruments has become 100% virtual. I suspect we might be one of the first countries. The key word is Reset. Everyone is talking about a Reset. Global Reset.

Or Australia is setup as the guinea pig to see if it slides off the face of the planet.

So you have no cash?

[KenJackson]

... down here.
I wondered if that might mean Australia.

While the US is inventing a trillion new dollars per year, many other large economies are inflating right along with us: Japan, UK and Eurozone. But I've read that Australia is going in the other direction, actually reducing debt.

That's such a novel idea that it's worth investing in. I recently shifted some investments into the EWA (http://www.ishares.com/us/products/239607/ishares-msci-australia-etf) ETF, which invests in Australian companies. And I plan to invest more.

My hope is that when the world looses confidence in the dollar, Australia and my EWA investments will be hurt less or even prosper.

[mick silver]

"If you don't hold it, you don't own it"... Ponce
and some will never learn mick silver

[Sparky]

This is an often-discussed topic here, and I think generally agreed upon as a GSUS tenet.



...
In light of all this, it just seems wise to keep a bundle of 20's hidden at home instead of in the bank. And thanks to the Fed, it doesn't cost much in lost interest.
...

However, not a bundle of 20's. If you have only 20's and the seller has no money, you'll be paying at least $20 for everything.

You need to keep smaller bills as well.

[KenJackson]

You need to keep smaller bills as well.

That broaches an aspect that I have great difficulty imagining.

I know I've read about countries that suffered hyperinflation, and I've heard that if you have a job, when you get paid, you should run out and immediately spend every penny you have. Because tomorrow everything will be more expensive. The dollars in your pocket lose very noticeable purchasing power over night.

That's where silver comes in. Since PMs have tended to hold their values across not just years, but millennia, the thinking is that it's wise to have a bunch of silver coins and rounds on hand for spending.

But whether it's dollars in the initial days of the event or silver coins after a while, I just can't imagine it happening. I look around me and I see that, in general, things have only gotten better, more convenient, easier my whole life. I've had an ATM bank card in my wallet continuously since 1976. It has never failed me, even overseas.

So now we have to figure out how to be prepared for the unimaginable.

[Sparky]

In my mind, there's a whole spectrum of what could unfold. I think the extreme scenario is very unlikely, but I don't rule it out.

I think the most likely scenario is that bad things happen in temporary stretches over a long period of time, and mostly on a regional or local basis. For instance, there could be periods of days or perhaps weeks where there are local or regional shortages of food, water, or energy, or perhaps some other items that we take for granted. There could be failures in the financial system where digital currency or credit gets interrupted, or paper assets get frozen or taxed. Again, I think these things will be short-lived, while politicians scramble to implement new procedures and policies to keep things from falling apart. I don't think TBTB want things to completely fall apart; it's not in their best interest because it means there will be less productivity from which they can skim profits. And they have plenty of resources at their disposal to deploy in order to avoid complete collapse. They are only willing for things to get bad enough for the masses to remain dependent, but not defiant. They don't want revolt.

I've listened to the inflation/deflation debate for years, and realize that both sides are correct. A big financial event will be related to a lack of liquidity or "real resources" in the system. This will lead to a period of deflation, which could include shortage of paper money that will be in high demand as digital assets evaporate in a derivatives hiccup or meltdown. But the political solution to deflation will be a complete abandonment of attempts to keep the perception of fiat currency as legitimate. Perhaps it's already not legitimate now, but they maintain just enough prudence now to uphold the perception that it's legitimate. When they are forced to abandon those prudent measures in the face of deflation, it will open the floodgates for inflation.

So, you'll want those paper FRNs in your possession for the deflation portion of the show. You'll want the metals for the inflation portion. And you'll want other tangibles (food, water, energy, supplies, land, etc.) for both, as both phases could include periods where the distribution chain is disrupted and stuff becomes unavailable.

[Glass]

Or Australia is setup as the guinea pig to see if it slides off the face of the planet.

So you have no cash?

We do have folding currency, it's plastic but yes its currency. The push to do away with cash is certainly on. Everyone is getting one of those wave and pay chips in their cards. I think most have had a chip in them for 10 years but I don't think they have been wave and pay enabled until recently.

there was an article today about the fraud risks with these style of cards that do not need a pin to work. Mastercard was criticised because Fraud was too easy And some customers said they didn't want to wave and pay. They wanted to PIN their transactions.

the Mastercard said they didn't care about the fraud because the maximum transaction on wave and pay is $100 so the fraud is not that serious. But the Judge said, that means nothing because someone could make dozens of purchases before the card owner even knows their card is stolen.

Mastercard also said that people could have their PIN option as well. All cards still had PINS and if you wanted to use them you could. BUT the thing that Mastercard didn't point out was that the Wave and pay feature was still working on all cards so it if got stolen the crooks could still use the card.

The owner can use the PIN but the thief can give the Wave. I'm not a smart guy but I can see there is a problem here. It's almost like the gun debate.

The reality is that Mastercard do not care, they don't put any of their money into the credit card clearing system, it is fully funded by the people who use the cards and theft/fraud is built into the interest rates. They can't lose.

[Horn]

And when a solar flare hits the satellites they will all remain sitting on their thumbs.

I like when your standing behind someone making a 4$ purchase with a card and the signature receipt tape gets jammed every single time.

The notion of "going green" is defeated when the cashier rips off 3 feet of dual receipt paper/tape two or three times trying to reload it into the machine,

As if everyone else included in the line can't tell that we as a human race have gone terribly wrong somewhere.