Posted on 09/10/2012 11:46:26 AM PDT by Kartographer
If you have been reading this blog for some time you already know that there’s much truth in the “cash is king” saying. When disaster strikes the “cash only” signs go up. When you have to buy / sell on the go, cash makes it happen. When banks go on holydays and everyone is looking for an ATM with some money left, Cash not only buys you good and services, it allows you to get some pretty nice deals. Since we’re talking deals, nothing gets you as many of those as a wad of cash at the right time. For someone looking to close a sale, the money being physically within hands reach, literally speaking, is an important factor. When you have to leave everything behind, what you carry with you and what you have in the bank is all you have left, and if the banks happen to go down along with whatever is forcing you to leave, then what you have with you is all you have left. Looking at different events around the world, if there’s one thing all refugees have in common is that they can all use a fat wad of cash.
(Excerpt) Read more at ferfal.blogspot.com ...
“It would seem to me, that “if the banks happen to go down”, then the little green pieces of paper one has in their pocket aren’t going to be worth much for very long.”
No, cash will be better than gold in the very short term, as cash will be the only option other than bartering for people needing to buy and sell stuff (and bartering is very, very, inefficient). As to cash not having value - in the short term it will have huge value, because electronic money is gone, so, essentially 90% of US dollars are gone. People with EBTs can try to use them to buy food - but they will not have any luck - only people with greenbacks will be able to use them. Gold and even silver, won’t work immediately, as people selling items won’t know what to do with those metals, or even how to tell if they’re legit.
Now, for the longer term, it gets more complicated, as the government will likely be tempted to print huge amounts of money - so cash would start to lose value. But in any disaster in this country’s history, those who had cash ready could get what they needed, those with debit/credit cards were told “sorry” it’s not that we don’t trust you, it’s that we don’t trust anyone.
Doesn’t look like quarters will fit in there either! lol
“Did you listen to Rush today? He actually gave major credence to the imminent financial collapse of America.”
It HAS to happen. We cannot get away with trillion dollar deficits for very long. There is a level that we can sustain, which works out to having a deficit that roughly equals the interest costs on our existing debt - in other words, if our debt only increases by the rate of inflation, and is not too high, it’s manageable.
But we are far beyond that. Rush has run the same numbers - we may ‘seem’ fine right now with a ‘strong’ dollar, but the vultures will strike, they ALWAYS do, as Greece found out (and Spain is finding out). We have some options, such as nationalizing 401k’s and private pensions, but even that is limited, as we’ll wipe out that money in less than a decade (maybe much less). This trajectory CANNOT be sustained.
...and because of that, I would just LOVE to see the entire Bush tax cuts expire. For two reasons: First it makes the lower classes and middle classes start paying taxes again, and second, it clears his name - in that the Dems have ALWAYS called it a “tax cut for the rich”. As much as I wished that was the case (as tax cuts for ‘the rich’ always help economic growth), the rich were an afterthought - it was mainly a lower and middle class tax cut.
The Dems know that - although I doubt the Republican leadership has enough intelligence to also know that. But the Dems will DO ANYTHING to not let those tax cuts expire for the lower and middle classes, because that will expose them (and the media) as frauds. But they should expire, because the REAL MONEY is in those classes (including the upper middle class). Once we hit those bad-boys up, we will start getting closer to real deficit reduction.
Of course the other option is to cut government spending, but even the old people here still insist on their cut of Old Age Welfare (sometimes called Social Security), so that option isn’t going anywhere.
“YES..I heard Rush today! Was a little shocked...”
He’s right. It simply is not sustainable. See my prior post. People might as well prepare for a very ugly downfall, if Obama is re-elected...because we’ll get it.
There is a significant percentage of flks who believe the collapse they are experiencing is only a temporary dip. These will take cash for inflated priced goods, so cash will have value even as the authors of that cash are scurrying to the government bunkers hoping they can wait out the chaos until a new master arises. At first a five will buy what a dollar would by. Then it will be a twenty for what a five bought. Eventually, a C-note will be the minimum exchange, though what it will purchase will be of little value within days.
There is a significant percentage of folks who believe the collapse they are experiencing is only a temporary dip. These will take cash for inflated priced goods, so cash will have value even as the authors of that cash are scurrying to the government bunkers hoping they can wait out the chaos until a new master arises. At first a five will buy what a dollar would by. Then it will be a twenty for what a five bought. Eventually, a C-note will be the minimum exchange, though what it will purchase will be of little value within days.
“Though he sometimes gets on my nerves it just goes to show how far ahead of the curve Glenn Beck is. Even ahead of the great “ Maha-Rushi”.”
Concur. Rush takes his time coming to conclusions, but once there, he is seldom wrong. He’s on board now with the consequences of this election.
Didn’t he do the one about the ragged old flag? Everyone should have that one, as well.
There may also be the fall back of setting up a small savings and checking account with a local credit union, where money is accessible if your big bank locks up funds or is considered an “out of state bank”. You still have a debit account and debit card but aren’t as affected if the big banks are nationalized or lock up your funds.
A compromise for long term storage and the fact that chocolate can melt: chocolate brownie mix in #10 cans or chocolate chip muffin mix. You get the chocolate kick with something that lasts years. Medium range scenario, you’re eating it after getting laid off or when you rotate your food stores.
In a temporary crisis, cash on hand has real value. But ...
Most of the concern is about a SHTF or TEOTWAWKI scenario — longer lasting.
What this implies is that CASH, coinage, precious metals has/have a limited shelf-life. Traditional currency will quickly lose value when needed items are disparately scarce — meaning barter takes over, I trade what I have (that you need) and I get what I really need and you can spare.
Cash on hand allows you to bug out or stock up in the first 36 hours. in the first day, travel will be OK. In the second day, travel will be difficult and risky. On the third day, travel will be treacherous and deadly. ... and traditional commerce will be gone for a LOOOONG time. No need for cash after four days.
SO ... cash is arguably valuable only for the period when banks fail/shutdown (for whatever reason, including grid-down) UNTIL “realization” sets in and rational, civil commerce ceases. After that cash and metals will not, in my opinion, be valued for trade.
As many folks here have suggested, security (arms, structures and tactics) food, clothing, water, shelter, health/hygiene items, work/labor skills and sex will be the currencies. Cash will only be good until people REALIZE the SHHTF. Once ‘they’ get past their normalcy bias and see the realiy ahead of them, the real currencies will immediately emerge.
IMHO.
If banking stays down, you can't pay your bills because nothing works, so don't need money to pay bills. Within one or two days, there's nothing to buy at grocery so don't need money for that. In the future, when stores may begin to open again, cash would be good to have to buy stuff as the whole system won't be up for a while and who knows whether your money can be found on a computer at the bank. The bank does not have a box with cash in it and your name on the box.
If some order comes about during the bank downtime, say after the zombies have all been killed, barter areas may appear. Then, be careful what you use for barter - don't use ammo unless you don't value your life.
In this situation, cheap items you bought for barber, are suddenly worth a lot of value. Say a man has a fine house but no water and he is dying. You have a quart of good water, so he trades you his house for your water as his house is no good to him if he is dead. The value of items now, change in the barter system.
I’d take most of it out of the bank. You’re not even earning anything (hardly) on it there anyway. Just hide it well but remember where it is.
Most credit unions are safer because they don’t do derivatives, sub prime loans, and other risky investments like many banks do.
At a coin show Sat a guy told me that in FT. Worth (in that area) they are printing $100 more than $20
Many people think they are being clever in keeping cash withdrawals and deposits below the $10,000 limit.
Wrong, things that get the IRS or the ‘Central Government’s’ attention is ANY deviation in your usual banking habits and the banks comply.
That brings up a good point: if you are going to be bugging out with a large wad of cash, be sure to only keep a hundred or so in smaller bills in your wallet, and the rest of the cash in multiple places on your person and in your vehicle. Replenish your wallet from one of your discrete stashes ONLY when you are in a place of privacy.
Also, remember that if you keep cash in the house, to rotate it occasionally, spending the older bills and replacing them with newer currency from the bank. Paying for gas with a couple of twenty-year-old bills may attract notice.
Bring gold, silver or barter.
That is all.
One precious set of widgets that nobody can steal from you: skills. Knowing how to fix things when they break, and there's no replacements, will make you welcome in many places. Knowing how to fix PEOPLE is among those skills.
Your local community college has classes on EMT skills, advanced first aid, as well as classes on how to weld, how to fix PCs, etc. Review the catalog.
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