[Falconoffury]

Will the banks rob you in a bad depression?
After researching the events in Argentina, I am worried about the power of the banks who hold our life savings. I read that people who held their assets in dollars had their assets involuntarily exchanged into pesos. This lowered their assets by about 1/4 in some cases. To add insult to injury, the banks denied people their money.

I'm guessing that the banks have the same sorts of powers in the US in the case of an emergency, and I am worried by that. It seems to me that those who carry a large stash of money or precious metals in their homes may have an edge during the early months of the crash. A home safe may be a valuable investment.

The thought that banks can deny you your own money really worries me, and I wonder what the rest of you thought.

[Andy]

Same concern here Falcon. We, the small people look screwed any way you take it.

[PenultimateManStanding]

I read about that too, falcon, very serious stuff. They've bounced back there in Argentina (Land of Silver) but only because we haven't reached peak production of oil yet. After we do its Katie Bar The Door!

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Barbarians At The Gate

[marek]

The banks will fail if everybody tries to take their money out at once (read up on "fractional-reserve banking" on line). Actually, fractional-reserve banking is why we need to have continuous economic growth to prevent the collapse of our financial system. Since growth will stop with energy shortages, the financial system is bankrupt. Better start converting money into gold, silver or other commodities.

[marek]

Also, Argentina had a currency board, i.e. they had a one-to-one backing of pesos by dollars. If you fix the currency and you continue to have inflationary inertia (as Argentina did), your real exchange rate will rise (the nominal exchange rate is held fixed) and you will have a recession because of declining net exports. Most countries with currency boards have suffered as a result of switching to that system of fixed exchange rates (probably the only exception being Hong Kong).

[PenultimateManStanding]

Right, you go to the grocery store and plop down a few gold coins to get your bacon and eggs. Glory Hallelujah!

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Barbarians At The Gates

[TrueKaiser]

$this->bbcode_second_pass_quote('PenultimateManStanding', 'R')ight, you go to the grocery store and plop down a few gold coins to get your bacon and eggs. Glory Hallelujah!

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Barbarians At The Gates

[mindfarkk]

don't forget that in the U.S. "your own money" is a digital record on a hard drive somewhere, not a stack of cash sitting in a safe.

plus the cash value of the U.S. dollar is backed by gross national product, not a gold standard. i understand this is common practice in industrial nations or something like that.

so if the economy crashes, even if you have dollar bills, they may be worthless. tha'ts what worries me. not that the bank won't give me my money, but that my money won't exist anymore. although that is a consideration i hadn't considered before.

which is why your best hedge against a full-fledged economic depression is the ability to barter. either skills or product.

[Falconoffury]

$this->bbcode_second_pass_quote('', 'd')on't forget that in the U.S. "your own money" is a digital record on a hard drive somewhere, not a stack of cash sitting in a safe.

[mindfarkk]

yeah, i hadn't thought about that aspect of it. i was just worried my money would be worthless.

i had already considered, though, putting some cash in the mattress so to speak, just cause if the power goes out or the cities break up, i don't want to be stuck standing in front of an atm.

[marek]

$this->bbcode_second_pass_quote('PenultimateManStanding', 'R')ight, you go to the grocery store and plop down a few gold coins to get your bacon and eggs. Glory Hallelujah!

[PenultimateManStanding]

$this->bbcode_second_pass_quote('marek', '
')Why all this irony?

[marek]

$this->bbcode_second_pass_quote('', '
')
I lack confidence in the future. It looks very dark to me. That's why all the irony.

[mindfarkk]

the way i deal with concerns about money is trying to figure out how to live without *any*.

i always preferred struggling against the elements than struggling up the social/corporate ladder so i'm kind of content with that.

[PenultimateManStanding]

I used to work in the corporate world in the oil biz. There's something creepy about those guys.

[Riddick]

Yep, I think they'll screw us over. Look at all the corporate scandals and how large quantities of stocks and money have been moved prior to 9/11 through the present time. A lot of money has disappeared and it sure as hell hasn't been distributed to the poor. I think it will get to a point where all currency, except for the electronic, will be eliminated. Nothing but ones and zeros.

[uNkNowN ElEmEnt]

$this->bbcode_second_pass_quote('Riddick', 'Y')ep, I think they'll screw us over.... I think it will get to a point where all currency, except for the electronic, will be eliminated. Nothing but ones and zeros.

[MonteQuest]

What is Economic Collapse?

$this->bbcode_second_pass_quote('', 'W')hen people save money, they are storing "future consumption". Putting a dollar in the bank today enables me to take a dollar out later and buy something. When a country experiences a monetary collapse, everyone who has saved money looses his entire savings. When the savers put their money in the banks, the money had value – it could have been used to buy products. When the savers now take their money out of the banks, they find that no one will accept their money – their "future consumption" has disappeared.

[Falconoffury]

Another example is the 70's oil crash in America. I read that the banks limited the money that people could access. If the same situation arises, some cash would help during the first few months at least.

Of course precious metals will be a longer term solution. Then of course when things get so bad like "The Postman" or "Mad Max" you'll have to depend on your farming and survival skills.

[BorneoRagnarok]

No, no. In fact , I don't put any money in the bank anymore except some nominal amount. Convert those paper to hard asset before too late. Even beers is better storage of value than cash as everyone need it or even better buy steel and commodities such as grain and soya beans. Some can go to silver as the potential is much much more than gold. Imagine what will happen if everyone decide to get their own solar panels.

In soft crash scenario which I subscribed to , gold and silver rules. In hard crash, food is the money. Banks will definitely went under. ATM need electricity.

However, in the long run, cash economy will disappeared and there are not enough gold and silver to go around.