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Sorry for sounding arrogant or something.... by no means do I know everything or have all the answers.
I agree with HappyTexan, that you should diversify.... but I don't really think panicing is really necessary since we actually have FDIC, unlike back when we had the depression where bank runs actually meant a total loss of savings. Just my .02 cents.
-chuck22b
FDIC is only as dependable as the next pen stroke, on a policy change....
There is no way in a collapse that it can meet its promises.
No one is going to buy treasury notes to pay off the insured....
I have a question, you may think it stupid, if this doomsday scenario happens, what will happen to the deposit boxes that people keep in the vault at the banks?
I wouldn't trust keeping cash at home but would consider keeping it there.
Any thoughts on this?
Thanks
Banks can get into safe deposit boxes, so I wouldn't trust them. When my father died I had to pay them to drill the lock on dad's box but I don't believe for a second that they didn't have a key.
I've thought of sawing a big square hole in my basement slab and installing a large and very high quality floor safe in such a way that the safe is not visible.
I'm not too worried about getting the money to the house as I have a couple of very good friends that are State Troopers that would escort me....who's going to rob them?
But, as some have mentioned, if the **** really hits the fan and the US Govt collapses....cash will be worthless anyway. So, we're back to food, fuel, and ammo...
Ok, some will think I'm crazy here and I'm ok with that. With all the talk of nationalzation and banks doing really bad I have to admit I'm thinking of taking a chunk of my cash out of the bank. I know its insured by the FDIC, but with the way things our going out there I could see them putting some kind of freeze on those assets etc. I don't put anything past them right now. I would rather take an offensive approach instead of waiting until everyone is making a run on the banks or whatever may happen.
When people think a bank may fail they rush to take their money out. BOA & CITI are looking REAL bad right now and the odds increase everyday that they could in fact fail. We bank with BOA.
I was told there was no way they would let FNM & FRE fail, they did. I was told Lehman & Bear stearns would never fail, they did. I also watched the largest mortgage lender out there (countrywide) fail. Do I even need to mention the Merril lynch takeover? I just don't trust anyone anymore and want to protect what we have saved the best way possible.
Use bankrate.com to see how the banks in your area are rated. If you have a solid bank I would hope that your money would be safe. If you have an account at BOA or Citi, you may want to move your account somewhere else before the government takes it over.
Remember how ape**** the markets went when Bear Sterns, ML, IndyMac, Wachovia, and WaMu failed? WaMu was fairly small in size and it was the largest bank failure in history. If BoA failed, that would be the equivalent of the nuclear bomb on Hiroshima for bank failures. They have almost 3 trillion in assets that would need to be purchased, and it is the largest bank in the world. It would take A LOT of money to buy them up and after all the former consolidations, many banks aren't willing to put up money. Also, everyone says w/ relief "FDIC" however, I don't think the FDIC fund would be big enough for this one. An entity that big really can't fail (oh god, I sound like a politician) or it'll take more than just itself down. So many deposits would be lost, including retirement nest eggs and the savings of the unemployed (if they had any). So again, the common man would get screwed even if they had been financially responsible and saved.
I'm not usually a doom and gloomer, but it would be a huge calamity.
FDIC is only as dependable as the next pen stroke, on a policy change....
There is no way in a collapse that it can meet its promises.
No one is going to buy treasury notes to pay off the insured....
The Fed can buy its' own debt. Basically, all I'm saying is that if it comes to that point... you might as well not even hold dollars. And yes, diversify... you should keep capital in a lot of forms and places. But, a complete withdrawal from the banking system, is just as unsafe as having all your money in one bank. Diversify, and plan... but at the moment, there's no real point to panic.
The Fed can buy its' own debt. Basically, all I'm saying is that if it comes to that point... you might as well not even hold dollars. And yes, diversify... you should keep capital in a lot of forms and places. But, a complete withdrawal from the banking system, is just as unsafe as having all your money in one bank. Diversify, and plan... but at the moment, there's no real point to panic.
-chuck22b
Chuck I understand where you are coming from but if it gets that bad its not a 100% guarantee that money will be worthless. For instance a lot of people lost all of their retirement, investments, etc. with the stock market crash that we are experiencing right now. BILLIONS and BILLIONS of dollars lost. Is the Dollar worthless right now? When the depression happened and many banks failed and people lost all of their money was money worthless then?
If Citi & BOA go under what will happen? Am I still covered under FDIC? The answer is, YES... but like someone mentioned above the FDIC can be changed pretty quickly by one stroke of a pen. I feel that you are relying too heavily on the FDIC and it can be taken away from you at the blink of an eye.
Lets look at this rationally for a second. Say the government does something really stupid(Won't be the first or last time right?) and does away with the FDIC shortly after these banks fail. Do you honestly think money will be worthless at that point? No it won't. You have to revert back to the great depression when there was no FDIC and people LOST all of their money. The economy eventually came back but those that had ALL of their money in banks lost it all and suffered immensely. It would suck to be at the end of the line during a bankrun and thinking "Man I hope I get my money, why didnt I see this coming? Why did I put all my faith in the FDIC?
In my honest opinion I don't think these banks will fail and I don't think the FDIC will go away. But one thing I can tell you is I have been wrong and shocked several times in my life. One small example is Bear Stearns. Bear Stearns had been around since 1923 and survived many recessions and even survived the great depression. I never in a million years thought they could fail. I was dead wrong.
Sorry about being rude to you earlier Chuck. You sound like a cool guy. I don't know all the answers either and think its good that we all have different ideas thats we are bouncing off each other.
Also, I don't like to talk about doom and gloom. I feel we will make it out of this deep recession and prosper but at the same time I think its smart to take precautions just in case. Worse case I just return that money to the banks when all is back to normal.
The FDIC actually has up to 1 year to give you your money if you do some reading on their site.
This is not a new rule, but nevertheless a rule. Currently the FDIC closes a bank on Friday evening and customers are able to access their money in their new bank on Saturday.
Can you wait up to 1 year to get access to your bank account ? (worse scenario here)
The FDIC actually has up to 1 year to give you your money if you do some reading on their site.
This is not a new rule, but nevertheless a rule. Currently the FDIC closes a bank on Friday evening and customers are able to access their money in their new bank on Saturday.
Can you wait up to 1 year to get access to your bank account ? (worse scenario here)
And seeing as the gov't memory lasts about 6 months when it owes us, your pretty much not going to see a dime of your (their) money.
Chuck I understand where you are coming from but if it gets that bad its not a 100% guarantee that money will be worthless. For instance a lot of people lost all of their retirement, investments, etc. with the stock market crash that we are experiencing right now. BILLIONS and BILLIONS of dollars lost. Is the Dollar worthless right now? When the depression happened and many banks failed and people lost all of their money was money worthless then?
If Citi & BOA go under what will happen? Am I still covered under FDIC? The answer is, YES... but like someone mentioned above the FDIC can be changed pretty quickly by one stroke of a pen. I feel that you are relying too heavily on the FDIC and it can be taken away from you at the blink of an eye.
Lets look at this rationally for a second. Say the government does something really stupid(Won't be the first or last time right?) and does away with the FDIC shortly after these banks fail. Do you honestly think money will be worthless at that point? No it won't. You have to revert back to the great depression when there was no FDIC and people LOST all of their money. The economy eventually came back but those that had ALL of their money in banks lost it all and suffered immensely. It would suck to be at the end of the line during a bankrun and thinking "Man I hope I get my money, why didnt I see this coming? Why did I put all my faith in the FDIC?
In my honest opinion I don't think these banks will fail and I don't think the FDIC will go away. But one thing I can tell you is I have been wrong and shocked several times in my life. One small example is Bear Stearns. Bear Stearns had been around since 1923 and survived many recessions and even survived the great depression. I never in a million years thought they could fail. I was dead wrong.
Sorry about being rude to you earlier Chuck. You sound like a cool guy. I don't know all the answers either and think its good that we all have different ideas thats we are bouncing off each other.
Also, I don't like to talk about doom and gloom. I feel we will make it out of this deep recession and prosper but at the same time I think its smart to take precautions just in case. Worse case I just return that money to the banks when all is back to normal.
no problemo ufcrules1,
you sound like a cool guy too... and it's definitely a legitimate concern.
who said I had all my eggs in one basket? I said I agreed with diversification. But, I still feel relatively safe with the bulk in the banking institutions.
in a true emergency of that proportion, i got food, water, and other provisions as well as some cash on hand... hey i live in California, earthquake supplies aren't just for earthquakes
-chuck22b
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