First National Bank of ….me

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This post is either going to be a gentle reminder to people or it’s going to cause a bank run.

Surely I cannot be the only one who is thinking that keeping some cash on hand might not be a bad idea. I use debit cards for most of my I-don’t-care-about-privacy transactions, and I pretty much just use cash for guns and the like. I can’t envision too many scenarios where Im not going to be able to continue to pay for things in that manner….but…being a survivalist means taking nothing for granted. So, off to the bank for some cash to stuff in an envelope and bury in the bottom of the gun safe. Outta sight, outta mind…and outta Palmetto’s website.

If there’s a situation where bank cards aren’t being taken because the economy is tanking, power is out, and there’s bodies in the street……well….cash won’t really be terribly helpful at that point anyway. But, my neighbor across the street doesn’t have a point-of-sale card reader in his kitchen and if I want to conduct business with him, cash would be nice to have. When the bodies stack up at the curb, then we’ll switch to other currencies.

How much? For me, not a lot…most everything I need that can be bought with cash is already here. For you….well, thats up to you to decide. As an aside, I’m still keeping most of the money in the bank except for what I’m allocating to limit orders at my brokerage since everything is on sale. Banks are just one more collection point for crowds and sick people…and whatever funk is oozing on the keys of an ATM keypad would give you the heebiejeebies if you thought about it. So…cash on hand.

I wonder how many people are doing the same and if there’s going to be any…behaviours…by the banks to slow the exodus of cash that may-or-may-not be in the works as people start going into panic mode. Either way, always good to be ahead of that sort of thing, Anytime anyone tries to ration something the obvious thing happens – demand and price goes up. If you told people they were limited to withdrawls no larger than, say, a billion dollars in cash…people would still line up at the banks to pull out money even though none of them have a billion dollars. When we hear that there’s a line at the bank and they’re limiting cash the natural reaction is to get all of yours out of there. Bank runs are self-fulfilling prophecies.

Here’s an interesting flip side to this coin, though….because cash is a wonderful distribution method for spreading disease it might come to businesses refusing to take cash and going to plastic only. Hmmm. Do I pull out the cash and keep it on hand or do I keep it in the bank on the chance that I need it there to back my debit card because no one will take diseased cash? Decisions decisions.

Hurricane Katrina was a lesson in disaster response and preparedness that defined planning for the last fifteen years. This coronavirus looks like its going to be a graduate level course. Emergency management departments, programs, and strategies are going to be wildly changed after all this settles out. The health care industry, despite its institutional inertia, should be pretty interesting to watch change as well.

17 thoughts on “First National Bank of ….me”

  1. Deep in the heart of Prius-stan..

    Quarantine → kids out of school → parents home and not working → less $ in the bank → people using credit → merchants, then others worrying about getting paid on time (if at all) → “cash sales only”? I’ve not seen it yet (we’re in the heart of Central California, only two (reported) cases of CoVid 19 so far in our area, and yet “freak out” buying is brisk), so my advice to a select few has been “best to have and not want” as the saying goes.

    Mustang0268 sends

  2. On the same page….took money out of savings to cover 2 months of bills and I stored it in one of the Gun safes! Have my paycheck still being deposited in my checking to cover the bills. If/when things get back to “normal” I can always put some/most of it back. These are strange times we are living in…. …by the way I always keep some cash on hand…just got a deal from a guy selling some guns….cash is king….

    Stay safe!!

  3. I cant see a situation where the bank wont take back the cash if you need to go all plastic. But if that situation does arrive, i’ll bet you see it coming before the bank does.
    Good reminder.

  4. We started keeping some cash on hand about 20 years ago after moving to hurricane central on the Tejas gulf coast to use when/if the lights go out. We have never had to use it during an emergency, but it has come in handy several times when we needed cash and the ATM wasn’t accessible or convenient. If has always been immediately replaced. About three weeks ago we doubled up on our reserve. What had been all twenties became a mix of bills. If I have to throw away the change to get a transaction done in an emergency I want to do that for small amount as possible.

    The downside, as you mention, is that money is an excellent way to transmit disease. The area toll road authority suspended all cash operations and instead says drive through and they will collect later. Yes, the surveillance state, they take a picture of every plate that passes through a toll booth.

    A couple of humorous things came from all of this when buddies at work decided I wasn’t so crazy and went to get some cash for themselves. The first guy tries to get $10K in fives; the bank only has $5K on hand. “Are you going to be doing this often?” they ask him. Second guy does the same thing. “What are you going to do with all these bills?” He’s a quick thinker. “Rap video.”

  5. Having a month or two cash expenses (food, fuel, etc not rent/ mortgage, electric, etc) on hand in mixed bills is a wise thing to do. Not like that 1/3/5 grand is collecting a lot of interest in the bank anyway.

    A hundred bucks in ones or fives is wise. Twenties are probably a good balance between bulk and being commonly accepted.

  6. Yes, cash on hand is important. I have cash on hand, but pulled some extra. Have had a few situations in normal times where the sat-uplink was down, so no credit card or debit.

    This is a national and worldwide event affecting every place at the same time. Clearly not your localized snow storm or hurricane. It has also exposed the flaws in our supply chain especially concerning medication production.

    This will become the event that we judge are preparedness going forward.

  7. Like a magic trick – keep your eyes on the left hand and not notice what the right hand is doing. The economic/financial crash is not occurring from the virus as everyone thinks (in some small part indirectly, it is). The fact that shipping containers are no longer arriving from China with everything from N-95 masks, TV sets, computers, medications and underwear inside them does have something to do with it.

    Russia and Saudi Arabia have decided to crush OPEC+ and have each started to pump as much as they can which has smashed the price. Putin stated that Russia could afford a $25/bbl price for a decade. The shale oil / fracking industry has taken out HUGE loans, and at $75+/bbl were making big profits. At $50 they break even. At $30 they are not able to make payments on their loans. The banks that loaned that money will not be re-payed. Whose money did they lend? Your pension fund, money market account and 401(k) funds! The petrodollar is being destroyed in front of your eyes. The reset is happening NOW. Coincidence that NY has mobilized the National Guard in New Rochelle (a few miles north of NYC)? Nobody allowed out of their homes? I don’t know about you, but I call that the beginning of martial law.

    I’m not sure how this all plays out, but I’ll bet things get a LOT uglier before they get better. Will the banks remain solvent? Your guess is as good as mine, since there are too many variables. I’d prefer to maintain a supply of cash. The dollar itself may not survive this. My guess is that cash will be king for a certain amount of time. As governments try to print their way out of their problems, inflation will raise it’s ugly head. At some point, nobody will want cash because it will lose value too quickly. Read about the Wiemar hyperinflation in Germany. History does repeat itself.

    I suspect that I’m preaching to the choir, as most of the people here are somewhat of a like mindset. Things will start to move pretty fast. Tie up your loose ends and fasten your seat belts. I hope to see you on the other side.

    Doc

    • I use to work in the banking industry. The currency pens do not work! All you have to do is get the money moist with salty water, a.k.a. Sweat, and it fails every time until it dries. Take a bill and bleach water bathe it, so the ink comes off. Then print your new bill, it passes on the ink.

  10. Is it still a federal bank rule that removing $10,000 all at once gets you on a Treasury Department ‘watch list’ for possible money laundering / drug dealing ?

    We keep some currency at home, but I never considered the possibility of cash being turned down. I think there was some Medieval ‘money washing for transactions during the Black Plague ? Water with silver or something like that. Of course that was only for metal coins.

  11. I brought almost a grand home from hamfest last weekend. I literally washed it all in a tub of bleach solution, let it sit, then dried it in the laundry dryer.

    It was lots of small bills with about 600 in 20s. A nice looking stack. The bleach solution didn’t affect the bills at all, and the water was gross when I finished. I made sure each bill was thoroughly wet, then stacked them to sit, wet, overnight.

    In the morning I rinsed with clear water, and dried.

    Don’t know if it was needful, but the hamfest was in a county that has cases of community transmission. If it wasn’t my one swapmeet a year to sell a lot of accumulated gear, I’d have skipped. As it was, I was constantly wiping my hands clean and stayed on the upwind side of the tables. 8 days and I feel good.

    I didn’t deposit the cash either. Nor did we deposit the GS cookie cash, we wrote a check instead.

    I’d prefer to have more on hand than we do, and I’d have loved to keep my subscription with the Metals Pimp, but things have changed over the years.

    We’re in this with what we have now. I hope it’s enough.

    nick

    • “I brought almost a grand home from hamfest last weekend. I literally washed it all in a tub of bleach solution, let it sit, then dried it in the laundry dryer.”

      So….youre a money launderer?

      • I’m a money “Dryer” 🙂 No soap was actually involved.

        I did have a bit of trepidation because I’d heard that counterfeiters have ‘bleached’ bills and then reprinted them with higher denominations, since the paper is hard to fake. That’s why the marker strip is in a different place for each bill, but they must use something like high strength peroxide as the household bleach did nothing to the look of the bills.

        Pull into the shell brother, things are going to get nuts, and the power and internet will probably stay on throughout, leading to all sorts of interesting videos, but also to coordinated flash mobs.

        nick

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