No institution is safe for all can be closed by decree, including credit unions. This is true of safe deposit boxes as well. They may not confiscate it, but they can deny access. So PLAN B should be an amount of cash that is enough to live on for at least one month if not three months insofar as basic essentials, not mortgages etc. This is food money effectively and gas for the car. Gold coins will not help in this case or even silver coins for we are not talking about trying to preserve wealth, this is the emergency stash for living purposes and in that case you need CASH which is recognized by everyone. Try explaining a silver quarter to a teenage clerk who has no authority to accept a quarter for more than a quarter. Precious metals will be more of an underground economy of barter – not useful at the local supermarket.Also keep in mind that cash could come in handy in a computer-failure whereas you cannot access a bank, exchange, or whatever just to survive for there could be a scenario where not even plastic credit-cards or debt-cards would offer any help.
Our corporate clients have increased their cash positions tremendously in preparation for 2015.75. They learned their lesson from 2007.15 and do not want to get caught in a liquidity crisis. Hence they have increased their cash position albeit in banks.
His last paragraph is completely unrelated to his first paragraph. “Cash” in a bank for a corporate client is simply the bank’s debt to pay cash-units at their basis value. It’s not a physical anything, and few if any corporations hold cash beyond their daily retail working cash. The corporate “cash” in a bank is useless if the banks close or whatever.
First paragraph makes some sense – kinda like being told to wear a seatbelt and not drink water from dirty streams. Yeah, you’re an idiot if you have $20 or less in your wallet and rely on credit cards for all purchases.
“Digital” currency (not to be confused with cryptocurrency) is one of the thing sthat makes this coming collapse even more impossible to predict. Digital currency was sold to all of us on the basis of being completely fungible with cash…a dollar bill is worth exactly as much as a dollar in your checking balance or credit card balance, and all are fully interchangeable. This perception was the only way people would ever have trusted electronic banking…and it was true for a while, but now the rules are changing. Cash is being seized, withdrawals are being tracked, it is not being accepted (look for videos of people trying to pay mortgages in cash)…This eliminates the fungible nature of money, which is the very foundation of people’s confidence in it. Currency without confidence has zero value. Will people lose confidence in digital currency before they lose confidence in folding cash??? Will the government flood the market with physical cash when system is threatened or will they continue their efforts to get rid of it??? I have no idea how this will break, but I think these are critical questions in determining how to best prepare.
In a deflationary/bank failure situation just simply having cash is not going to get you far. From my years of waitressing I know first hand how few people have cash and those cash holders rarely had small denominations of cash. If you are prepping your on hand cash supplies have most of your cash in lower denominations less than twenty. I would set a priority of first stashing away $1s and $5s well as having a change jar to routinely roll coins. When money is scarce so will be large denominations and it would suck to have to pay more because nobody can make change. Also, I would not want to be caught will bills larger than $10 because it will make you a target for theft.
This is food money effectively and gas for the car. Gold coins will not help in this case or even silver coins for we are not talking about trying to preserve wealth, this is the emergency stash for living purposes and in that case you need CASH which is recognized by everyone. Try explaining a silver quarter to a teenage clerk who has no authority to accept a quarter for more than a quarter. Precious metals will be more of an underground economy of barter – not useful at the local supermarket.
Bullshit.
Sorry, but bullshit.
The economy tanks, bank runs, then bank closures, etc. You don’t take your PM’s to some pimply faced high schooler running the register… anyone who does is a fucking idiot and/or has no idea how to barter. I might not be a “businessman”, but I know how to argue something from a position of strength.
It goes like this:
You: “Excuse me son. I need to see the manager.”
Kid: “Okay, be right back.”
Assistant manager: “Hi, I beez Bonequeesha tha assistance manager.. How kin I hep youse?”
You: “No, I need to see the manager. The person running this store. Please.”
Bonequeesha: “Ah kint hep youse?”
You: “Eh, no. Thank you. The manager. Please.”
Bob the Manager: “Yes sir, how can I help you?”
You: “Is there somewhere we can talk in private?”
(Bob’s office)
You: “Okay Bob, here’s the deal. Cash is for shit and it’s on the way out. My family needs provisions – you know, food, cooking oil, etc – and I’m thinking this (slide a Gold Eagle across the desk at him) will get both of us a lot farther than the toilet paper being used.
Bob: “I don’t know…”
You” “Look Bob, I know you write off a certain percentage of your stock every month – breakage, spoilage, theft, etc. You let me and one or two of my family members do our “shopping” and you can write off what we “buy” as breakage, spoilage, theft, and in exchange, we will take care of you with more of those. Nobody has to know, it looks legit on the books, we get what we need and you get nice shiny gold and silver coins.
This way, you make Bob the Manager complicit in your nefarious scheme – he won’t rat you out because then he’d have to rat out himself. His sense of self-preservation will do you fine… if he’s gonna rat you out, it will be right at the beginning. But he won’t. That’s why you slid him a Gold Eagle.
You should see people’s faces when they handle genuine gold for the first time – it’s almost a magical incantation. Their eyes glaze over. They stare at it. They can’t stop handling it – turning it over and over in their hands… you can see the hook being set…
Yep, you slide Bob a Gold Eagle and he’ll be hooked just fine…
You don’t want to show up at the grocery store with all the other mouthbreathing proles and motherfuckers and expect to slide through the checkout line… even as brain dead as folks are, you think someone won’t notice something’s up?
What you do is give Bob a list of shit you need, agree upon an exchange rate – so much goods for so much PM’s – then you and some discreetly heavily armed “friends” meet Bob around back of the grocery store after hours. Load up your shit in nondescript boxes, throw a tarp over it all and then go home.
Of course, you don’t want to establish a pattern. If you meet at the same spot at the same time – all the time – that’s just asking for trouble. Especially as things degenerate. Eventually, folks will get hungry enough or greedy enough – or worse, the “Authorities” will get wind of what you’re doing – and you’ll get bushwhacked.
You make a couple of contradictory arguments, Steph…I too waited tables and tended bar for years. I had maybe 1-2 shifts total where I didn’t walk with all my tips in cash. has that changed? I see your point on small bills and have also read that elsewhere…however, any significant amount of cash is hard to hold in small denominations only. If larger bills are enough to specifically make one a target for theft, then they also have value. So much of this will also depend on the breaks. If financial then commercial the governmental collapse (Orlov model) occur very rapidly, then you would be correct, a lot of small denominations and change would be very wise. However, if government stays powerful fro long enough, they could throw a lot of wrenches in the cogs..for instance, flooding markets with physical cash. So cash value would surge for a while, then plummet. Or, a parallel currency could be issued at gunpoint (is there any other way for government to do things?)…dollars may still be traded in black markets, but who knows? Maybe Mt Dew cans and Tide laundry detergent become currency (the Tide thing really happened). Ultimately, as much self-reliance as possible is the first, most valuable commodity, then land, then stored food and water source.filtration/purification next, physical security (guns and ammo), energy (oft forgotten: gas, diesel, propane, generators, inverters, batteries, lights, solar panels), barter goods (booze, cosmetics, candy) and finally financial assets (physical cash, gold, silver). I don’t even mention paper/digital assets. That’s how catastrophic I think this collapse will be.
Billy & Steph – the question I have for you is this: if “The economy tanks, bank runs, then bank closures, etc.” and no one can get credit, how do the stores stay open? Credit is what keeps the whole JIT inventory system going. Without it, stores have nothing to sell. I don’t have an answer, I’m just throwing out the question. I could see a new system without stores (at least big box retail) at all. Need something: go to the person who produces it. period.
Now, I know that level of fracture won’t happen, but I could see us moving closer to that and further from what we have now.
DRUD- Large denominations would not be worthless they would just be worth less in relation to physical cash scarcity. What I mean by this is $100 is only worth $100 of goods. If you are out to purchase something for $10 and don’t have smaller denominations your $100 just because worth less than $100 to purchase $10 worth of goods.
Some will disagree with me that they would just simply hold on to the $100 until they could purchase $100 worth of goods but it doesn’t work that way. If you look at pictures of Greece from the past month there were empty shelves as people bought daily consumable items knowing there would cash shortages.
In reference to being a target of theft is because of flashing perceived wealth. The larger denominations are easier to steal and they are harder to conceal within eye sight of another. If I were to go to buy something I would want to carry the least amount of money to cover my purchase in case of being mugged. I also wouldn’t want to have extra cash on me whatsoever in cash of somebody seeing it and making me a target of being mugged.
Spot on, Steph, the difference being what you carry vs. what you take out of the bank now. I have all denominations. Also, if/when cash spikes in value, the key is not to just hoard and survive. That is the time to be bold. Joseph Kennedy built an empire when almost everyone else was hoarding. I have no desire in empire building, but I would like to build an income source when everyone else is just trying to survive. Invest in farm? Energy sources if power grids are failing? Carpentry? I don’t know. The point is, don’t just aim to have enough to get by, aim to have some capitol to invest.
How much cash should you have outside the banks?
Only put in the bank the amount to pay your current expenses. Hold any money other than that in cash, if you don’t need the cash, convert that to PM’s. Rinse-n- repeat. Let that be your monthly routine until they burn this muther down.
This is part of …plan ,prep ,prepare…. I go with 6 months. Have enough cash to pay your bills for 6 months. Only you know what your monthly expenses are.
DRUD: I absolutely would not hoard cash. It is really worthless while being hoarded. For instance, If I had more than $1,000 and the risk of a bank run was in the air I would take that $1,000 to buy anything useful for today’s price. My top priority would be medical supplies (respiratory, infection, and digestion), tools, seeds and planting equipment, etc. When you don’t need anything you don’t have to worry about the value of money. Money is not wealth and it can never be “own” in the way people today arrogantly believe they own it. Money is only as valuable as what it can or cannot purchase.
Billy & Steph – the question I have for you is this: if “The economy tanks, bank runs, then bank closures, etc.” and no one can get credit, how do the stores stay open?
A valid question.
My answer: They don’t.
Not long term anyway. But while they are open, you can use cash reserves (that you’re supposed to have on hand anyway) until that paper becomes not worth the effort to use anymore.
At which point, you move on to your PM’s for as long as Big Box has shit to sell.
If Big Box can’t get deliveries because diesel costs money and drivers need to be paid – and they’re refusing to deliver because they’re not getting paid – then you don’t go to the “producers”.
I’ll say that again – you don’t go to the ‘producers’. Know why? Because the folks who produce the shit that Big Box sells might be several thousands of miles away. You can try to source things you need locally, if you live close enough to an agrarian area and the local farmers/etc aren’t too off-put by a non-local come sniffing around for stuff…
However, Big Box has distribution hubs. That’s basically a super-sized version of all the shit that Big Box sells on a daily basis. And if nobody is making deliveries, then all that shit is just sitting there. That’s where you go. You, some discreetly heavily armed friends and a couple big-assed pickup trucks. You don’t show your hand too early. If they’re even remotely on the ball, the place will have extra security – perhaps even “legit” copfuks guarding the place if the local Sheriff is switched on enough… he might know what that distribution hub means in the long term, and will dedicate resources to protecting it.
Provided you get past the Wall of Denial security goons, find the hub manager and cut a deal with him/her. This is only a temporary fix, since eventually everyone will wise up to the fact that distribution hubs = the good shit and then it will be game on.
Which means you need to be sourcing your needs locally as much as you can and stacking shit high and deep as well, while we still have some wiggle room…
Or, if you actually know the manager of the local Big Box, cozy up to him or her now and pre-arrange a mutually beneficial agreement between the two of you…
There’s loads of ways to get what you need… you just need to be able to think sideways.
Fuck cash!!
I’m hoarding candy bars.
Steph – I did say hoard and perhaps that was the wrong word. You are correct about converting to useful goods, BUT balance is key. Not all your eggs in any basket and cash needs to be at least one of those eggs.
Billy- “Not long term anyway. But while they are open, you can use cash reserves (that you’re supposed to have on hand anyway) until that paper becomes not worth the effort to use anymore.”
Exactly my take as well. There may be a slight window where a lot of very valuable shit can be scooped up on the cheap if one has some cash.
You’re ideas about distribution hubs, managers, general ends-around the system…also spot on. Stay flexible and mobile, be bold when it makes sense, think outside the box.
Drud- That is why I say my priority would be small denominations. That way it would only be for the purpose of using it. I just saw on ZH of stories of Greek using their debt cards to make big purchases in case of a hair cut. Many were buying clothes, appliances, and jewelry. My point is not too store wealth in money. Use money to make purchases but not as wealth storage.
I chuckle when people posit the ZA around the corner.
To me, that’s Plan D (or even Plan E), one step short of the Yellowstone caudera blowing off fully.
Instead, why not look at what happened in relatively affluent countries (at least 2nd world) where economic/financial calamity struck?
Argentina.
Iceland?
Cyprus.
There are others, I’m sure.
What did not happen?
ZA.
Shooting in the streets.
People walking around with their battle rifles (unless they were in some sort of uniform.)
Mass starvation.
Zero movement of cars, trucks.
What did happen?
People adjusted.
Stores bought what they could and resold it at a profit.
Ditto gas stations.
Cash was king. Maybe not the local cash (pesos) but SOMEONE’s cash.
Metals had to be turned into that cash to be used in purchases.
The same thing will happen here, in all likelihood. People adapt quite quickly.
Greenback cash dollars are the ONLY money that both 1) has no spread between the “bid” and the “ask,” and 2) is the medium in which all prices are currently set (and people are quite habituated to this, it’s unlikely to change very fast.)
All other discussions about post-Zombie-Apocalypse posit conditions that have never occurred.
Your mileage may vary.
Oops. That’s “Yellowstone caldera.”
Many states passed legislation for mortgage companies to accept gold bullion for payment on mortgages/property. I would worry about payment of property taxes as those taxes could elevate drastically and you will need cash and lots of it if you could not use PM’s.
We may get the chance to be the carpetbaggers this go-around if we have a stack of bullion. Pennies on the dollar would buy you a rental property.
-Hershey’s Bar: $ 1.39
-10 oz. Silver Bar: $161.30
– Hearing Mrs Droopy Tits asking if the HERSHEY BAR is real @ 1:33′ mark: PRICELESS!
DC – I agree with you to a point…read a lot of stuff from FerFal on Argentine collapse and I have friends in Argentina as well. But there are differences between them and USA!USA!USA!!
1) We are the empire…we do everything bigger and badder, possibly including collapse.
2) We have no ethnic identity and therefore very little natural solidarity.
3) We are very, very spoiled…we have not gone through a true collapse. With only a few exceptions store shelves have always been full, every fruit and vegetable is available year round.
4) We have a police force (one wit here refers to them as copfuks) that is extremely prone to violence and extremely well-armed.
5) We have crumbling infrastructure, coupled with insane reliance on just-in-time inventory systems.
6) We are a populace of addicts. Addicted to drugs (sure illicit ones, but mood-altering ones are most scary). Also, addicted to entertainment (300 channels of bullshit is not enough now we must have streaming on-demand bullshit).
What you say is true. People adapt and quickly. But there has never been a populace like the USA!USA!USA! has today, there has never been a empire collapse in the electronics age (USSR maybe in its very infancy), and there has never been a fourth turning with anywhere near our level of dependency on technology.
Maybe you are correct and we will peacefully adapt to a new standard of living, a new “normal.” But it is far from guaranteed.
Also, I do not believe in zombies, ghosts, elves, dragons, and I am not so sure about Eskimos.
disclamer: (/sarc o the last, so no comments calling me a moron for THAT, I make no claims of prognostication, am not liable for people believing bullshit, I only work obliquely for the MIC, and all people and places everywhere are entirely coincidental. My apologies to the Simpsons and Mr. Vonnegut for stealing your stuff.)
If the banks close in this country for more than a few days the sheep will panic. Yes, they will eventually adjust but the Free Shit Army will likely go ballistic and the object of their rage will be store workers. Very few FSA troops will have cash and if hurricane Sandy was any indication, very few FSA troops have more that a day or two of food at home. That will make them dangerous.
In the early days, and for a few weeks or months, cash will absolutely be king. Small bills will be preferable. Your best bet will be to have a minimum of 30 days worth of food, water, medicine and other essential supplies at home BEFORE the festivities get under way. I would aim for three months or more myself. Same goes for cash. Maintaining this minimal level of preparedness will keep you out of the harms way you’re likely to encounter with the FSA or Gestapo during those early days. Keeping your pie hole shut will be essential as well. That goes double for your wife and kids. Be prepared to do a little play acting during such a crisis as well. You’ll want to grouse about the “difficulties” you’re having right along with your neighbors. You don’t want to be grilling steaks in the midst of a shortage either. That kind of thing will attract unwanted attention.
If you are not already in the habit of spending cash, develop the habit now. Spending 100’s, 50’s and 20’s only will allow you to amass a supply of small bills without attracting attention. You’ll be amazed how fast they pile up by paying cash for everything. In my experience, $10 frn’s are the most difficult to acquire as retailers don’t seem to have many. The biggest problems with keeping cash at home are theft, fire and destruction by rodents. Make certain you have a safe, secure place to keep a small fireproof lock box. A metal lock box might not burn but in a house fire the contents will be reduced to ashes. Use fire rated lock boxes. Depending on how much you have to store, you might want to have multiple hiding spots. Remember, if it is convenient for you to access, it’s convenient for thieves as well.
Water and utilities will still function during a bank holiday but that will be your signal to lay in larger supplies of water and fuels. In case the crisis stretches on a bit, be prepared to deal with your human waste and garbage as well. Not doing so will attract disease and rodents.
I don’t see the attraction of buying big ticket items in the USSA during a crisis. Greeks are buying new cars and shit because they can take them to a nearby country and sell them for cash. That won’t be a big option here. I would focus on PM’s first. After that you can lay in a stock of kerosene or propane heaters, small stoves and things that people will genuinely need and then trade them for things you need.
By Jesse:
Taking Profits, Holding More Cash
As I mentioned the other day, this is the kind of market where it makes more sense to take profits if you have them and hold more cash until the mispriced risks resolve themselves. I am holding mostly cash and precious metals for myself. I am looking carefully at a couple equity plays along the lines of the precious metals, but not with any particular conviction.
The biggest drivers of global risk are the collapsing China asset bubble and the inherently unstable governance of the Eurozone, manifesting as it is now in Greece, and all the uncertainty that this brings.
But Spain, Portugal and Italy face the same challenges. German hubris is destroying the Eurozone which itself is not a particularly durable model of organization economically and politically.
One of the biggest single issues is the unreliability of the media and the political and economic class to tell the truth, particularly as the quadrennial power struggle called the Presidential elections approaches. Spin and deception and flying hot and heavy, and unfortunately most of the captains and crew of the ship are busy packing goods into their personal lifeboats.
Speaking of unsustainable, take a look at the big spike in new unemployment claims and the high continuing claims number in the US economic data. And the Fed is still biased towards raising rates, and continuing to pump the top down stimulus into a broken system.
And as for the Congress and the Administration, politically the US has not been this badly led overall for quite some time, and I remember the Nixon years.
So, let us protect ourselves, both financially and spiritually, with an eye towards the things that really matter.
All other discussions about post-Zombie-Apocalypse posit conditions that have never occurred.
Germany teetered on the edge of revolution when the Reichsmark tanked and hyperinflation raged during the Weimar Republic… you do remember reading the history about the street battles, etc?
So there’s that…
Argentina.
Iceland?
Cyprus.
Argentina’s population is about 80% Euro, the rest a mishmash of Indians and immigrants from other South American countries.
Iceland is about 100% Icelandic/Norse. They’re not going to throw down because of a bank collapse. They don’t throw down when volcanoes explode. What makes you think a bank collapse will phase them?
Cyprus is divided into two autonomous zones, each being about 100% Greek and 100% Turk, respectively.
One thing you don’t see is the populations of these countries having age-old animosity towards each other and being forced to live in close proximity to each other because of an asshole government, an agitating media, along with almost universal firearms ownership.
The Greeks and Turks hate each other from way back, but they’re smart enough to know if they’re both camped out on the same island, the Turks get their bit and the Greeks get their bit.
The Argentinians had their innings, including a ‘depression’ that lasted from the 70’s through the 90’s, then after a small breather, a final collapse with riots where people died, raging crime and the government itself was toppled, so it’s nothing like you’re portraying where you make it sound like everyone was sitting around smoking shit and communing with nature while shit righted itself…
Billy- Could you check into the MTV thread, I would like your thoughts on that article. heh
I deal with the just in time inventory system everyday .At the moment ,its humming along very well. But when the tractor trailers stop ,look out! Most places carry 2-3 days of inventory on hand. As far as consummables . Food ,bread etc. We have random credit card outages,if customers don’t have cash , they don’t eat . If its regular customers ,I just comp it . My uppermanagement are well aware of this ,and condone it. They are aware of how fragile the system is and rule number one atm is don’t inconveinance the customers. But I have had late deliveries and had to have a limited menu.
I spend 12k or so on food orders everyweek . When shit gets real I am in a unique position to PANIC first lol and implement several action plans . I watch closely for food/fuel disruptions. It might be a good heads up to frequent travel plazas and truck stops on a frequent basis just for the info you can glean from watching the normal course of business . I have learned much from this website and hope that possibly gives some info back ))
@Bea Lever: You’re trying to start some shit, aren’t you, you devil!
I think hording small bills is the ticket. Any PM’s you have should be held back to take advantage of the “new ratios” created by the crisis. And I don’t think any manager-level clerks will go for the PM’s under the table routine. First, they probably don’t know what PM’s are and second if they do they’ll suspect they’re fake. Unless of course you have an assay office in your pocket.
Whiskey and cigs are great for barter, just make sure your trading partners don’t know where your stash is.
Westy
Who me ?? Never……heh.
West,
I think a GM of a Big Box will be savvy enough to know what PM’s are and if you buy correctly, you don’t need an assayer’s office… pre-1964 quarters and dimes are a known quantity and you can see their composition right on the edge. Plus, they have that distinctive ring when bounced on a hard surface.
Silver and Gold Eagles have their content and weight stamped right on them. Yes, some might be faked, but I seriously doubt that really good ‘fakes’ will show up in Dirtville – especially when everyone knows of everyone else. By name. And if you don’t know them, then someone you know knows them. And where they live. There will be too much riding on such exchanges to risk jeopardizing it all on a one-time score.
A simple scale will be enough to establish the genuineness of a silver or gold coin like an Eagle, since no metals have the exact same density, and so no metals can be substituted, then plated, and maintain the same dimensions as the genuine article, save tungsten and gold – One is hard as the hinges of hell, the other soft as warm butter – so if it deforms under moderate pressure, it’s gold. If not, then it’s not. One ounce troy is about 31.1 grams.
http://mojobob.com/roleplay/weight_chart.html