If the US Debt Bomb goes off, and banks across America collapse like a house of cards, there's not going to be any such thing as going to an ATM or cashing a paycheck. So my question is this: since the day-to-day economy (e.g. groceries) isn't going to convert overnight into a precious metals & barter based system, how much cash do y'all think it makes sense to stuff under the mattress?
Stash Cash for the Short Ters?
If you honestly believe that if/when everything blows up we immediately switch to trading silver coins for products and services I think you're in lala land. Go ahead, carry an ASE (or any coin for that matter) around with you and ask everyone and their sister if they a) know what it is and b) if they have any clue what it's worth in $US.
I've done this and have never had anyone know what it's worth. Only a few old-times recognized the coins. Most have never seen an ASE but almost universally say "wow, how much is it worth?" when you hand it to them. People know it has some value, but that's about it.
Cold hard cash, baby. If you honestly believe it's worthless, take a sack of $100 bills and throw it from the top floor of the atrium of you local mall and watch the sheeple trample each other for it.
I'm all for honest money and I stack like it's my job, but I'm still connected to reality.
If the US Debt Bomb goes off, and banks across America collapse like a house of cards, there's not going to be any such thing as going to an ATM or cashing a paycheck.
Yes. Correct. I think having a couple of months living expenses in cash is prudent. Hopefully since you are thinking about this subject you already have a supply of necessities at home so you won't have to run down to the store in panic though. Several layers of "insurance," right? In the short term there will be a few merchants who will know the value and desire of exchanging precious metals for goods, but most will not. I have always believed that currencies will continue operating as the primary means of exchange, and once the dust settles those with precious metals will generally be exchanging their metal for a currency that will be used in transactions (rather than using the metals directly). One thing to consider is which currency(s) one wants to hold for a panic situation such as that. I like the idea of holding a mix of $US and $CA.
I don't think "Dr Durden" even bothered to read your post.
I think you've got a great question. When the black Monday or whatever day it occurs on does happen, I think you'll see the majority of the populous in denial and think that "oh, they'll figure something out tomorrow and the ATM will be fixed." You'll see truckers still making deliveries to your supermarket, farmers still growing food, and people still going to work even though their last paycheck couldn't be cashed.
I expect that there will be a bank "holiday" while they urgently try to distribute cash into the system to meet demand. When banks re-open, we'll probably see some of those "defective" $100 bills that have been vaulted enter the system as there just isn't even close to enough cash to meet demand. The Treasury knows they weren't really defective, they just needed an excuse to hold a large quantity of extra bills in the event of a bank run. When the banks re-open, they'll limit cash withdrawal sizes for sure.
While a few people are aware that banks already limit large cash withdrawals today, its going to be a big wakeup call for those that think their $5k life savings isn't sitting there waiting for them... imagine the people with $50k or > $200k waking up realize they cannot get at their savings more than $500 per day!
After the bank holiday is declared, I suggest you immediately talk to the general manager at your favorite supermarket and let him/her know that due to the ongoing currency troubles that you would like to work out a plan to pay in silver in the future. The reason I say __AFTER__ the bank holiday is because silver and gold will skyrocket overnight from their already high levels. The store manager will need some time to think about your offer to pay in silver and he'll probably hear on the TV that silver and gold are going to the moon. So yes, he'll eventually accept gold and silver as payment for groceries and goods you need to acquire.
As for how much cash on hand: I highly recommend WAY more than you'd normally spend in a single month. Prices will likely rise dramatically for goods in high demand as the economy slows down. Work to save a two month supply of cash that you can keep at home. Leaving cash in a bank account returning zero interest is silly and helps fund the evil empire. That is two months including the cost of rent or mortgage and tax liabilities, so yes it is a lot of money for most people.
I don't expect anyone to pay their taxes or mortgage payments with cash during such an economic collapse, but the reason I say to include it is because prices are going to go through the roof for basic goods and the common folk, the sheeple if you want to call them that, will still be giving value to fiat currency. It will take a lot of time for people to lose trust in the fiat currency which they've believed their whole life to be of value. A collapse of one's basic beliefs held for many years can take a lot of time and can be not just emotionally, by psychologically, so traumatic that people will go into denial and think things will return to the way they were last week. Its the normalcy bias on the grand scale of an entire nation or possibly even western world.
Before saving 2 months of cash, make sure to save up essentials that are relatively cheap now: Dehydrated food, canned food, canned meats (spam, chicken, roast beef, tuna, etc), rice, wheat (and grinder), oatmeal, beans, and of course a few bottles of multi-vitamins. The prices will quickly rise in a currency crisis where cash is in short supply. Have at least $500 cash in various denominations at home right away, before working to save up that two month supply. $500 will help you handle the first week better than most people.
People may ask, why multi-vitamins? Because you're likely going to have a dramatically different diet and some vitamins and minerals will be lacking. Taking a good multi-vitamin will help you keep your brain and body in good condition. Staying mentally stable and alert is incredibly important in such situations and multivitamins do help with this.
I agree with this completely, for sometime now I have not kept much Bernanke bucks in my account, just enough to pay current bills on a monthly basis. No one knows when a bank holiday will occur but we know eventually it will.
I have been with the same CU since 84, and they started noticing my account draw down to the point it is now, so I was asked about it, and they never blinked an eye.....I can get 0% interest holding it in my own hand or realize later gains in my PM purchases as you never know when a deal will present its self.
I'm in the making under $20,000.00 a year crowd so any cash amount is a big percentage. At a min. keep enough to get out of dodge or buy groceries for a week. Cash will be king at least for a little while until the system resets. Even a few stashed 20's will help you feel more in control. Keep cash on hand or in PM and not in a savings account. I think you should always change FRN's into a hard asset as soon as possible. Be it a canner, a pair of undies, food or toilet paper. Make sure you are prepared before it "hits the fan", then you won't have as much to buy/need.
I've always felt the need to have a couple months cash and more supplies lying around in case of collapse. A bank run type event is probably in the cards over the next couple of years.
One thing to remember about the mattress over a bank: Right now they're both yielding about the same interest on the deposit.
Dollars will trade for some time after a system reset due to the psychology listed previously. Also, because price movement will also be limited by the same psychology, you may actually to be able to cut some good deals with FRNs in the first few days.
Shopping today, what you guys are saying really hit home. Goods are costing more. Exchange fiat for Physical, useful items, not just PMs!
Don't get me wrong, PMs need to be part of your OVERALL preparation for a SHTF scenario. I know it's not as 'fun' to think about as oz. bars, but PHYSICAL items are costing more funny money than ever. Think... really long "Camping" trip...
Here in New England during winter storms, it is crazy how rapidly food supplies can be cleaned from the shelf. Bread, water, batteries, ect. This, during a relatively minor event? With it able to be forecasted by meteorologists days ahead? How many people live in the North East Corridor?
Even as simple as 10 gal. water supply stashed. that would be 10 gal. ahead of most others. Then if SHTF you do not have to place additional strain on supply (or behold to) just trying to get stocked up. It's like this. Feel over paranoid buying bottled water or other non perishable now, or stand in line for a ration, as we have so sadly recently seen in Japan.
( and you thought bottled water was expensive @ a concert?) lol!
How much will food cost, say after an inflationary event, in the midst of a supply disruption?
Once started, the Cookie Crumbles fast.
Long winded, sorry!
My sister had a plumbing explosion/ leak and had to turn off the main water supply. She went nuts and called me to complain and asked me what I would do?
Turn off power to the water heater: 50 gallons of water that is safe and won't burn out the coils of heater.
I keep 2, 2.5 gallons of stored water, one at room temp and 1 in the fridge. So that takes care of the first couple of days.
5 gallons of water in a camping jug stored in the house. That takes care of cleanups and flushing the toilet.
A couple of big pots to heat water in and store warm in thermos and insulated water jugs.
That's not even counting the rain barrels or the other 60 gallons I stored.
I think I may have pissed her off with my answer...... LOL
About the Rain barrels, My Father does that! waters his entire garden w/ it when it's really dry. He's on well water, never ran dry just old habit i guess. would also keep buckets for toiletflush, ( yes, even w/o power, pouring some water into the bowl will "flush" it)
Heats with pure wood heat. as the supply comes from 'his' land. ( owned for almost 40 years, now paying about 5K per year property tax) w/ no retirement... ouch.
As regulation was passed to prohibit selling seafood direct from harvester to restaurant, price fix was in for dealers. Due to location location location, we have been successful in selling directly to consumers from My father's home! all legit, less product, bigger profit, small volume = fresher. It works!! F the middle man!
Our neighbor was the highschool Home Ec. teacher, she always said that if SHTF, my father would b the first person she would seek out!
He is a Forester,
Gardener... THANK YOU DAD!!!!!