How safe is money in the bank?

[KayLaw]

I just happened to read a column on another site written by a woman who doesn't keep her money in the bank because with the huge deficit, the FDIC doesn't have enough money to follow through if a bank collapses.

I've heard of people who hide their money in their mattresses or bury it in their yards and always thought they were kooky, then I read a book about the Great depression and people actually were unable to get their money from the banks - they just locked their doors. Can this happen again? Is their a safer way to stash money? And what about a dollar crisis?

Any thoughts or information?

[slackmaster]

1. FDIC insurance covers up to $100,000 per person

And with creative use of account vestings a couple can put up to $1.2 million in a bank with full FDIC coverage.

They've covered accounts after bank collapses in the past. I think you'd have to look far and wide to find any case of a person losing principle as the result of the collapse of a US bank since 1933.

IMO any amount of money is a hell of a lot safer in any US bank than in a mattress. Think of the potential for loss by fire or theft.

[JailForBush]

2. The FDIC?

Hmmmm... Is the FDIC by any chance something that's associated with the federal government? If so, is it safe from Republicans and corporations?

[Throckmorton]

3. Yes it is.

Where did you get the idea that everything that the goverment does is evil?

[JailForBush]

9. I don't know, probably from the Executive Branch, Legislative Branch,

Judicial Branch, Republicans, Democrats and Microsoft.

[smirkymonkey]

45. Good Answer...

why on earth WOULD we trust them??

[Superfly]

7. That's per account...

I believe

[Frodo]

14. Not really "per account", though you CAN get well over $100,000

IRAs are insured separately. Joint accounts, while not separate, can impact things.

But biggest of all, that's per bank.

If you've got a few million dollars that you want to insure, you can simply (after sending me a check for the idea :-)) spread it around between banks. They are EACH insured. Some bank holding companies can actually do it for you within their own network. They may own several separately insured banks.

[mouse7]

4. National Government Bonds are more secure

US Savings Bonds are the most easily obtainable form.

[DuctapeFatwa]

5. US Treasury Defaults On 30 Year Bond Holders

The U.S. Treasury will default on contracts with investors, mostly individuals, who loaned the government money in 1979 on the agreement that they would receive 9.125 percent interest every year until their bonds mature in the year 2009.


No longer will politicians and appointed bureaucrats be able to brag that the United States has never failed to live up to its obligation as the safest investment in the world. Investment is no longer guaranteed.



The Bureau of Public Debt announcement claims that this recall applies to about $4.6 billion in 30 year bonds issued on May 15, 1979 and calls for their redemption by May 15, 2004. Of course, investors holding these bonds are not forced to cash them in and can hold them until 2009 if they want, but they will no longer receive the interest promised, the main reason for investing their money in the first place.



That means that if you loaned the government $10,000 in 1979 you will lose $912.50 a year, $4,562.50 in the next 5 years, in interest you would have been due from the government—before the government decided to back out of their end of the contract.

http://www.uncle-scam.com/Breaking/jan-04/br-7.html

[amazona]

11. you are losing the interest NOT your principal

The interest pay-out of 9.125 percent is just too ridiculously high and has been for years. It's high time the U.S. backed out of this, just as you would back out if you were paying interest at this rate. My house note was this high, and yes, I went ahead and just paid it off early. My investors didn't lose anything -- they made years of interest and the principal was returned in full. They just didn't get it for 30 years because I'm not an idiot. In this climate, for the U.S. gov't to keep paying 9.125 interest rates would be damned irresponsible because that is
just not today's interest rate.

The investors in your example didn't LOSE anything. They got back their principal and they got many years of high interest payment to boot. They just didn't get to keep the party going for a full 30 years.

I don't put that in the same category as being at risk of actually losing your money.

Just my humble opinion. I'll acknowledge that I am far from a financial expert. I'm a little hesitant to offer this perspective because you seem to be very knowledgeable in this area, so perhaps if you can see the flaw in my logic, you can explain it to me (gently?).

[Frodo]

12. That story was a mistake.

Charitably, the guy who wrote the article didn't know what he was talking about. At worst he was a lying fear monger.

The Treasury did not default on anything, nor did they change IN ANY WAY what they have been doing for years.

[DuctapeFatwa]

19. Here is the link to the US Treasury bulletin

The Treasury Department has called for redemption on May 15, 2004, a 30-year bond issued in May 1979. The bond is the 9 1/8 Percent Treasury Bond of 2004-2009, CUSIP 912810CG1.
Under terms of the call, the bond will stop paying interest on May 15, 2004.

http://www.publicdebt.treas.gov/sec/seccall5.htm

[Frodo]

20. And? What relationship do you see between that link and the other story?

Because there isn't one.

It's like saying when you refinanced your home last year you "defaulted" on the previous mortgage.

For me to say that would be "wrong" if I knew nothing of personal finance. For me to say that when I DO know something of mortgages would be "a lie".

Calling callable bonds is not a "default". It's not the first time this has happened. Nor was it unexpected. I think every one of these callable bonds has been called on the appropriate date. I don't have the link any more, but the last time this came up I posted links to the same thing the previous year and all the way back into the 90's.

It is simply wrong to say "No longer will politicians and appointed bureaucrats be able to brag that the United States has never failed to live up to its obligation as the safest investment in the world."

Or "Investment is no longer guaranteed"

Or "How long will it be before the United States loses the credit rating it has enjoyed for years"

To put it simply. It would have been stupid and irresponsible to do anything ELSE. Why pay foreign (and domestic) banks and mutual funds and wealthy individuals 9% interest when you don't have to???

[DuctapeFatwa]

21. Is the fact that the gov has been doing it since "way back into the 90's"

the best argument that that things are fine and people should trust the government and invest in it?

[Frodo]

24. No, the fact that they've been doing it for as long as it's been POSSIBLE

is.

Treasury securities are not usually callable, so late in the Clinton administration was the first time this could happen. But when interest rates hit such high levels the government (wisely) decided to pay a little extra THEN for the privilege of being able to call those bonds NOW if things got better (yes that was a slightly above-market rate to compensate investors for the possibility that it would be a 25 year investment instead of 30).

Whether you should "trust the government" or not is YOUR problem. My point was that the article you linked was full of lies and intentional slanting of the facts to arrive at a scary conclusion. A conclusion not supported by the facts. There was NOTHING even the slightest bit unethical or credit-damaging involved in calling bonds that investors KNEW would be called.

[DuctapeFatwa]

28. I think you may be missing the point, which is not whether the bonds are

callable, or whether you agree with the commentary of the article's author, and hopefully any individuals who purchased these bonds did so with an awareness of the call provision.

The point is that people tend to think of government bonds, the FDIC etc, as safe and secure, when in reality, the government now issues callable bonds, and the FDIC would be unable to make good if it needed to.

In other words, when Alan Greenspan goes to sleep at night, his last thoughts are not of how to keep your money safe.

[Frodo]

29. Sorry, no. The point is that the author doesn't get it.

The point is that people tend to think of government bonds, the FDIC etc, as safe and secure

And they are and nothing in what we've been discussing impacts that in the slightest. The people who bought those bonds 25 years ago got a HIGHER rate than they would have gotten on a non-callable security in exchange for the call option. For the government to NOT use that option would be negligent (and stupid).


the government now issues callable bonds,

Also not true. Current treasury securities are not callable and have not been for many years. It was really a relatively brief period when rates were so high. And it was the right thing to do at the time.


and the FDIC would be unable to make good if it needed to.

A completely different subject - though also completely incorrect. The FDIC has never failed to pay every penny lost in an insured institution and is not currently in any danger (if a $50B bank goes under it doesn't "cost" the FDIC $50B, or $10B or even $5B). And it wold be a minuscule dent in the budget if the FDIC needed help from it's backer. It's axiomatic to say "if all the banks go under we're in big trouble", but no amount of FDIC insurance would help that. The fund is fine for what it is supposed to do and I think insurance rates have been lowered because the fund is over capitalized.

[DuctapeFatwa]

30. For what it's supposed to do. Which is make you feel better

Not to actually give you your money when the shrinking number of banks "go under."

If you're lucky enough to have any money, unless it is a very very large amount of it, put it in gold and get it the hell out of the oilngun Wal-Mart.

[54anickel]

13. Well, they were callable at that time. It sucks that they called them,

but I don't think it's the same as defaulted. We'll see a lot more of them being called in early now as they approach their anniverary dates.
Yes, it looks bad and sounds bad. But if you have the legal option to call wouldn't you be doing the country a disservice by not calling them?

[RainDog]

33. I made the same mistake with that article, Ductapefatwa

it seems that person is spreading disinformation.

as far as money goes, unless Bush wants to undo the laws which were put into place after the bank failures of the great depression (which is why the FDIC now exists), they will have to honor their insurance pay outs if something happened.

as far as sh** vs sh**-

if you have the means, everyone who lives in an area which has earthquakes or tornadoes or snowstorms, etc. should have three days worth of drinking water on hand, some canned goods for the same amount of time, something like granola bars, whatever does it for you, to tide you over a disruption in delivery of things. if you're lucky, you have a freezer full of garden produce.

Have candles and matches in a waterproof container, and if you wanna go wild, you can have a kerosene lamp and a bottle of kerosene, but keep it safely stored away from any possible source of fire.

in addition, keep a box of fairly heavy trashbags, toilet paper, and baby wipes...and we won't talk about why.

also, have a tube or two of anti-biotic ointment, some sort of aspirin or substitute, a roll of bandaging, and if you can, stay a month ahead of prescriptions so that you won't run out. Most insurance cos won't do that, though.

have a couple of hundred in emergency funds, if you are able.

those sorts of things are much better to have on hand than a wad of cash if there were some disaster to cope with.

you can use all of them if you don't have a disaster, even the kerosene lamp in the summer outside, so you won't waste money, and if you don't need the canned goods and don't want to use them, you can donate them to a food bank which can definitely use them, or have something for your kids to take to school when they do their food drives.

I do not think, in fact I could say I know that the big economic powers that be in this country will not allow Bush to totally screw up the entire economy.

Sure, they may let them bankrupt social spending, move jobs in all sectors except for services offshore, but they will be that they will survive Bush, which means they will not allow the entire economy to collapse.

obviously, whenver these things happen, it's the poorest who get the worst of it, same as it ever was.

but surely today's economic elite learned a thing or two from the French Revolution and the Bolshevik Revolution, and they know if people get too desperate, then their own hides are on the line.

[amazona]

6. fdic/savings account still your best bet

I've had money in several failed banks or savings and loans, having lived through Bush I's America, and I was never inconvenienced in the slightest, nor did I lose a penny.

If you keep cash at home, and you are robbed, or flooded, or your house burns down, your homeowner's insurance only covers $200 worth of cash. So if you have your retirement savings in cash, quite likely you will lose it to theft, flood, fire, etc. with NO recourse. This hits home with me as my house was almost destroyed in a tropical storm last summer.

Unfortunately, some minorities are preyed upon by fear and believe that banks are unsafe. When the Vietnamese first came to Louisiana in the 1970s, many of them did not know that banks here were insured, and they kept cash in their houses. This caused thieves to target their homes. Many people had their life savings taken. If for some reason you do keep cash in your home, you need to be sure that NO ONE knows about it.

It's a terrible thing that Snow is pursuing a "weak dollar" policy and destroying the value of our life savings...but putting money under the mattress won't do anything to slow down its rapidfire drop against the euro. It's already for dead certain that, when the worst happens, damn few DUers will be able to afford to flee to another country. But that's a separate topic from FDIC insurance.

Please don't worry your fellow posters and do the safe thing and keep your cash in the bank!

[Thothmaninoff]

46. Fed, Future, and Inflation

FDR's "fix" to save banks in 1933 quite literally stole the gold from the population (they devalued the dollar subsequently), starting the inflation that persists today. Of course, we still had silver in our pockets, until the 60's, but now it's simply credit-based paper that loses value every minute. I see the trend of big steps made by bankers to "fix" economic problems as something that always does more damage long-term and those who implement it tend to be the beneficiaries.

I fear that the folks who are causing the current economic problems, by short-term attention to bottom line with no consideration for long-term consequences (be it wealth transfer, debt, deficit, trade imbalances, environmental abuses, unfair and inhumane labor practices), are the same folks who will continue to provide us with "solutions". And while it seems to be unpopular to advocate currency that is backed by anything tangible, it is the ignoring of this first principle -- that money should be worth something generally agreed to have value, more than "full faith and credit" of a government -- that continues to erode away the wealth, sovereignty, and future of our general population (I'm not so worried about the folks at the top), to say nothing of the world, which accepts our fiat currency as reserve currency and gives us goods and services in return; though this is beginning to shift, one more reason for our geostrategic presence in the middle east.

I'd be far more worried about the cash itself than the banks holding it. Heck, they can always print more -- in fact, they are as we speak.

[donsu]

8. if s--t happens, one of the first things is closing the banks

how would you cash in a bond if the banks are closed?

[amazona]

15. most of the time the banks are not closed when s--t happens

99.9 percent of the time when s--t happens, the banks are not closed. How long were the banks closed on Wall Street after 9-11? Some people were able to get money from ATMs that same day. During the disasters I've personally experienced, the longest I've even HEARD of someone being unable to get their money was several weeks (Hurricane Andrew). During the Cedar Fire in San Diego County, most of the people I met were still able to use charge cards, ATMs. A man who had lost all of his identification was still able to get checked into the hotel and they were walking him through the process of getting back in touch with his money.

I think my savings and loan that went bust in '92 was closed for a few hours while the feds did whatever it is that they do. By the time I knew it was broke, it was already up and running to give people their money again. I didn't have a moment's inconvenience.

Disasters don't hit every one and every bank at once. Even the height of the dot.com bust didn't cause anyone to lose their savings account. Remember Next Bank? Again, it didn't even have a physical presence. Yet I didn't lose one penny, and neither did anyone else who had less than $100,000 deposited.

What causes people to lose money is taking their money OUT of savings and putting it into equities, gold, condos, and other high risk vehicles.

So my answer to your question is...in an emergency, use your debit or credit card and then cash the bond in to pay off your emergency expenses when the bank re-opens. Which will probably be first thing Monday morning!

[CaptainClark23]

18. s--t vs. S--t

For most "normal" emergencies, I would say your advice is sound. But if there is a systemic failure of the financial system, as some postulate there could be, all bets are off.

Consider the possibility of an attack upon on or critical failure of infrastructure that takes out power for more than 48 hours across a wide-spread area. Could be there for awhile swiping plastic at the kiosk, with little result.

Too, given the continued erosion of the United States Constitution, I personally cannot and will not depend wholly on established regulations and "fail-safe" strutures to protect my interests.

I am an optimist by nature, but also pragmatic. There are enough potential flaws in the system of money-keeping that I think it is perfectly reasonable to arrange for alternate methods of having some tradable medium as a contingency.

I might ask the reasoning behind your assertion that buying gold is how people "lose" money, unless they were trying to get rich off of the trading, but its of no consequence.

[amazona]

32. you can't protect against TEOTWAWKI

I'm going to agree that my advice works for limited disaster. I don't believe in planning for general widespread disaster because I think it's impractical. For instance, I'm
not clear why paper (cash under the mattress) would be any better than money in the bank in the event of a total financial meltdown. I think it would be pretty worthless. Confederate money, anyone?

I saw a lot of people lose money in gold because I've been around for awhile, and there was actually a time when gold hit $800 an ounce, and people were still buying. It was the tulips of its day. So that wasn't reasoning, just an observation. Perhaps no one will ever lose money in gold again, but I tend to doubt it.

When you are talking TEOTWAWKI, gold is pretty useless unless you are an artisan. A better investment would be knowledge. Can you make a solar cooker out of junk and purify water and cook food? Can you catch a squirrel, skin it, and cook it without using more calories than it took to catch it in the first place? Can you keep your laying hens alive? Do you know your local medicinal herbs? Any bit of knowledge like that would be worth far more than gold, in my humble opinion. A drug dealer who knows how to cook amphetamine might be more valuable in TEOTWAWKI scenario than a teacher of economics, who knows. Anyway, whoever had the most guns at his disposal would end up with all the gold anyway. Just like now. :-)

I just can't in good conscience advise people to put cash or gold in the mattress, knowing as I do the very high likelihood of robbery, flood, or fire destroying it. In a TEOTWAWKI situation, thinking you can go to Sav-a-Center and buy food with your gold, well, I just don't think it will happen. People will quickly learn who has the gold and then you will have to ask yourself if you are willing to kill (or die) for it. Gold has the added disadvantage of being quite quickly found wherever you have concealed it. There are special metal detectors that can be set for gold! Even hobbyists have them. Heck, I've got one.

I'm not the world's most trusting person but there comes a point where you have to weigh likelihoods. If you live long enough, someone WILL break into your house, you will experience fire or flood or treefall or another disaster. My feeling is if you truly believe the world is about to end, working and saving money is not a smart thing to do. You should be going out and experiencing and enjoying while you can. But most of us agree the odds are that if we did that, the money would run out before the world did.

[JailForBush]

10. Wise investors diversify!

Put half your savings in a bank, the rest under your mattress.

[amazona]

16. check your homeowner's policy

Unless half of your savings is $200 or less, it is too high risk to put half under your mattress. I have not heard of any homeowner's policy that covers more than $200 in cash. And I used to be in a cash business so believe me I looked.

[slackmaster]

22. Most of my personal wealth is invested in my house

Kind of cool because I can live in it.

:evilgrin:

Going on down the list are my truck, which I can drive, and my gun collection, which is insured and provides some amusement. After that it's stocks and mutual funds, going on down to less than $1K in the bank in cash.

[junker]

17. FDIC can only cover 1.5% of half of the bank accounts (those under 100K)

Basically the FDIC is a feel good effort. It only works if ONLY a few banks go bust. It has reserves to the tune of 1.5% of one HALF of the accounts in the USofA. And further, that is personal accounts only yada yada yada....

if you ask me, Gold/silver is the way to go. Converting dollars to gold, and then back to dollars so far in the last 3 years you would have made money.

ANd it is not a piece of paper....

But TPTB won't like you if you abandon their paper-chase system.

[slackmaster]

23. You're talking only about its liquid assets

FDIC insurance is backed by the "full faith and credit" of the US government. If they ever ran out of cash and defaulted on anyone's bank coverage there would literally be a revolution in this country.

[Frodo]

25. You missed the point...

That IS what he is suggesting.

[54anickel]

26. Hmmm. Well we do want change...n/t

[junker]

27. They have no other assets. FDIC = TOO BIG TO BAIL.

THe full faith and credit and a buck won't buy a latte around here. FDIC has NO assets that would not be consumed in trying to cover less than 2 per cent of the insured deposits.

Look at it this way, if the top bank in this country fails, then all the accounts in the country go bad cause that one bank has just wiped out the FDIC 46.7 times over.

If the bottom 2 national banks, or the top 3 regional banks fall, virtually the same result as they will again have wiped out the FDIC.

Ok, so what then? Can you see congress ordering the Fed to give everyone their money back? Bear in mind congress can't print money, it can only borrow it.

And it is not possible for the poor people of the US to pay for the clean up of anything banking crisis which takes out the FDIC.

Also note that any crisis which impacts the FDIC to one half of its abilities (that is, calls upon the FDIC to use up half its cash/credit to recover accounts) has also wiped out both Fannie Mae and Freddie Mac.

It may well be the latter two firms which precipitate the coming currency crash as they are really NOT housing lending institutions as much as they are giant hedge funds playing with derivatives which are in the process of melting down a'la LTCM in 1997. Only this time, no amount of loans can cover it.

Ever hear about 'too big to fail', well in the K-wave winter, the operative phrase is 'too big to bail'. Look at Enron. They tried to get the Bushies to bail them, a study was done over 3 days, and the word was, can't happen. Too damn big.

[slackmaster]

37. You're assuming a complete wipe-out type of calamity

Look at it this way, if the top bank in this country fails, then all the accounts in the country go bad cause that one bank has just wiped out the FDIC 46.7 times over.

Only if the bank is left with zero assets and the FDIC has to cover every penny of insured deposits. That's not how things work in the real world.

I've personally witnessed what happens when regulators take over an institution and pay off deposits. I was working as a consultant for a basket-case savings & loan when the Resolution Trust Corporation came in and liquidated the place. They literally sold fixed assets to offset the cost of cutting checks to all the depositors, which included me personally. The RTC came in on a Saturday morning and started up full speed. I had my check in hand on Tuesday, and it came by US mail.

Can you see congress ordering the Fed to give everyone their money back? Bear in mind congress can't print money, it can only borrow it.

I can't predict how Congress would handle such a Doomsday scenario but I would expect them to uphold their obligation to cover the deposits. But that is not likely to matter much to me personally, since I keep very little in bank deposits. I have some risk-based investments but most of my worth is in real estate and hard assets that are likely to become even more valuable in the unlikely event of a complete economic collapse.

[Centre_Left]

39. False sense of security

People assume their deposits are secure because of the FDIC label. The idea of a "bank run" is an alien concept to nearly everyone who was born after 1938. I'm not sure that this is a good thing...

[Frodo]

40. Two different things

Liquidity and reserve requirement rules (Federal Reserve) protect from "bank runs" while the FDIC protects consumers from banks going out of business while holding their deposits. One is consumer behavior, the other is bad business practices on the part of the bank.

Though certainly one can cause the other...

[KayLaw]

41. Frodo

I think you're involved in banking, so let me ask you. Since we're using the $100,000 figure, if many of us had that many in the band in money market funds or CD's, how many of us could go into the banks and come out with that much cash? Or, even if there weren't - say - a big event that caused a rush on the banks, could I walk in and say, " I'll take my $100,000 in cash, please?

[Frodo]

42. We did pretty well with Y2K

And that was about as big an irrational fear you could expect to see. 9/11 didn't cause problems either... our branches in sight of the Pentagon didn't even blink.

As for how many? It depends on lots of factors. All at the same time? Could be just a few people per branch. At some small branches you might only need two or three people and you would walk out with a lot of 5s & 10s :-) There are contingency plans to deliver cash quickly if needed though, so it gets harder to quantify. How many branches? how quickly? etc. And there is usually no contractual obligation to provide cash at a particular office. With reasonable warning you'd be shocked at what they can handle. The reserves kept with the fed for clearing checks are available like lightning. And short term borrowing of other banks' funds is quite cheap while you sell other assets for cash.

THe problem with the question though is "why"? I can't conceive of a situation like that happening with no warning at all. For the VAST majority of people, walking around with $100,000 in assorted cash is pretty scary by comparison to a Cashier's Check or FDIC insurance. You really have to be talking about a complete collapse of the banking system... not just one bank.


Lastly (I may be out of date on this one)... read your depositor agreement... they might just say "no. Come back in three days"

[KayLaw]

43. Thanks, Frodo

I've actually wondered how much cash banks keep on hand but have been afraid to ask at the bank for fear they'll think I'm a bank robber. Also, I could swear people couldn't withdraw their money during Argentina's crisis.

[Frodo]

44. Ok... that would be Argentina.

There are substantial differences between Argentina and the US. There's no question that in some foreign countries you could have banks closed for long periods of time if the government wants. The closest we've come lately is NYSE trading halted after 9/11.

But don't pay any attention to people who draw parallels between Argentina's collapse and our current situation. For one thing, they had MASSIVE inflation for years before everything fell apart. We're arguing over whether the CPI is accurate at 1.5% inflation or if it's REALLY 3% or 4%. They thought they were successful when it dropped into single-digits. When you see gas at $3/gal on your ride into work and $4.75 on the way home and $5.44 the next morning... THEN talk about Argentina.

And if I had known you always "wondered how much cash banks keep on hand" I might have worried about robbery too. :-)

In normal practice, branches don't NEED lots of cash because (on average) it tends to come in from commercial clients about as fast as it goes out to consumers. At many branches, armored car runs are largely exchanges of denominations more than "orders". It usually depends on the consumer/commercial mix of the individual branch.

I bet it varies alot over the country though... branches in NY might have a LOT more than I've seen.

[amazona]

47. I have experience w/ this as a customer

Most bank branches keep less cash on hand than you think. If you need to withdraw more than $10,000, you can just show up at the bank, but be prepared to wait awhile. They are supposed to delay you about half an hour even if they do have the money because they are trying to see if someone is extorting or threatening you to get the cash. If you are withdrawing much above $20,000, I advise calling the bank in advance. It isn't a bad idea to call the day before if you can. In that way, the bank can be sure to have enough cash on hand ready to deliver to you. It won't be 5s and 10s! It will be Bens but, like I said, you do need to let them know. The other day, my friend who is a professional gambler, showed up at the bank to withdraw $40,000, and it took close to two hours. They had to get delivery from the main branch apparently. They asked him in future to please remember to call first and give them notice to save such a long process.

Also, don't forget, when withdrawing $10,000 or more in cash, you need to bring gov't issued ID such as your passport to help in filling out the CTR. The bank should already have your information, and sometimes they fill out the CTR without re-checking the information, but other times they will need to make a "fresh" copy for their files. Don't ask me why. You're never any younger than you were the first time they checked your passport or driver's license. But I guess they have to double check to be sure you're you and not your evil twin or something.

Should I ever wish to withdraw a jumbo CD in cash rather than check or electronically, I would definitely call a day or two in advance to let the bank know and I might even want to arrange for my own security.

I tend to think that if two or more people showed up at once making withdrawals of that size, they would have to be satisfied with cashier's checks if they hadn't given the bank branch in question proper notice. If they both insisted they wanted $100,000 cash, I would expect a delay of as little as 30 minutes to as long as several hours or even being told to return the next day. True, in my neck of the woods, it's mostly little branch banks, so perhaps those huge main branches have vaults and vaults of Bens waiting to be shoveled out on a moment's notice, who knows. But while I'm confident the banks are good for it, I would prefer to give them a little bit of notice before making a HUGE withdrawal -- no use leaving things to the last minute before jumping on a plane fleeing to Rio or whatever the scenario is.

My suggestion is that if you're thinking of making a huge withdrawal, call YOUR bank and ask what the procedure is.

On Edit: Just read Frodo's post reminding me that depositor's agreement may require you to give 72 hours notice for a large withdrawal. They hadn't held us to that in the past but I can't recall any of us withdrawing more around 40 or 50,000 in cash either. So give the bank time if you have a "jumbo." I personally found cash to be a hassle and am glad not to have to deal with it any more but to each his own.

[KayLaw]

48. Thank you, Amazona

That is a lot of useful information and I appreciate it.:thumbsup:

[rapier]

31. Speculation on the end of the world as we know it

Barring a meteor hit or a financial meltdown of sudden and gigantic proportions your money is safe in the bank. Safe to the extent that you will be able to withdraw it. The question of how much it will buy might be the most relevant question going forward.

THe federal deficit has little relation to this. Of course there is not near enough in the FDIC coffers to bail all account out. That's a seperate issue from the deficit.

If bank failures would get that far out of hand, cash in hand might be good or even great to have, but by then the world as we know it would be gone and so many other issues of security and how to live your life and protect your family would arise that money would not be close to the entire answer.

I'm not ruling out a financial panic, it's just that the chances are pretty small. In essence we are in a period of dislocation now which avoids the appearance of panic because of the huge increases in money available to keep things rolling along without massive defaults.

A safer way to stash money really means how to convert it to other forms to retain value. The 'worth' of money itself is the thing that will probably be central to any massive panic. This folds into your dollar question. I am a total agnostic on gold as an alternative and it's probably a mistake to get the gold bug religion but any rational plan for protecting assets means looking for other things to 'invest' in besides financial assets, ie. stocks and bonds, or real estate.

Take a deep breath and don't get all excited about one article. Yes, there are huge issues at play in this era of economics. Historical forces which could overwhelm most individuals and families no matter how much they plan or try to outsmart them. Hopefully they will play out over years, like we are accustomed to, so that we can adapt and muddle thru, as most people always have. A gigantic and relatively sudden shift like the depression might occur but identifing one is not possible, in my opinion.

You could, starting this moment, plan for The End. Devoting all your energy to it, like those survivalists of every decade, most recently the Y2K crowd. One day they may be right. If you miss that day by a year of 5 or 10 however you have paid a big price.

[RainDog]

34. end of the world as we know it...I feel fine

if someone wants to really look at that issue, it would seem to me that they would best put their energies into smart self-sufficiency, since TEOTWAWKI is more about peak oil than anything else, even the deficit, imho.

In this scenario, good "investments" would be things like solar heating, solar fuel cells/batteries, a good bicycle and bike baskets, and a routine to get used to riding your bike. also seeds to grow veggies, and time spend enriching your soil via composting your leftover veggie/fruit matter, leaves, and grass clippings.

all those things will benefit you whether the economy collapses or not, because you can save money, over time, on energy costs, get some exercise, and get out of the habit of taking a car everywhere, you'll have the soul satisfaction of helping things grow, and you'll recycle more of your household waste.

all win/win.

I keep looking for decent rain barrels so that I can water a garden with mother nature's hose, but so far haven't found any decent affordable things in my area.

[KayLaw]

36. Raindog

I agree with everything you said. I have no idea how big a rain barrel is or how much water it holds, but we survived Hurricane Andrew in my parent's house and they stored water in large garbage cans and Rubbermaid barrels. I guess you could use those to catch rain water until you found a barrel.

[bemildred]

38. Windmills.

Wells with a windmill to pump. I remember driving across the
country when I was a kid (a long time ago) and seeing every farm
with it's own wells and windmills. More expensive than a barrel,
no doubt, but less subject to the weather, too.

The dollar, being a fiat currency, is a faith-based medium of
exchange. A sufficient quantity to pay your fixed-rate dollar
denominated mortgage in FDIC insured accounts can be taken as
a good thing. If it does not serve the purpose there, then there
will be bigger problems anyway.

For other purposes, one might prefer to look into other things
to do with those dollars rather than watching them decay in a
bank account. Money-markets might do OK in a high-interest
situation, they have in the past. Barter goods of various kinds
are nice, although opinions vary widely on which to hoard. Your
strategy of investing in self-sufficiency seems most attractive to
me, it is an old American virtue, due for a revival in any case.

Trying to time the markets now to squeeze that last little bit of
profit out is risky business, you can't sell when nobody is buying.

The larger point is that there is no such thing as absolute safety
in economics or anywhere else, but one can be prepared, aware, and
flexible; looking forward and watching for what is coming rather than
looking backwards and trying to hang on to the past.

[KayLaw]

35. Thank you all

What started me on all this was reading articles by Paul Krugman about the falling dollar crisis in Argentina and learning about peak oil. I would never literally put money in my mattress - I was thinking more along the lines of different countries.