Alternative to Greenbacks?greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
I have read that having some cash set aside is a good idea. I'm cautious about having a great deal of cash in the house, and was wondering if AMEX travellers checks would be a good alternative. Aren't they like cash, and readily acceptable? Thank you.
-- Jim Kaminski (firstname.lastname@example.org), July 13, 1998
Is what I am hearing from other websites, that our greenbacks aren't going to be worth anything. The dollar may not be legal tender. I'm hearing different gold and silver companies pushing their agenda. With traveler's checks, what will it be backed by since you paid greenbacks in exchange for the checks? Is it possible that all greenbacks will be ordered to be turned in in exchange for new bills? If we are talking a deep depression, I don't see anyone taking a travelers check in exchange for goods. In that scenario, I see a black market and a bartering system set up. Even if it's a recession like the one we experienced in the 70's, there was an underground market. People in our area went to flea markets and garage sales to purchase and sell their goods. Flea markets and garage sales to this day are going strong! But those dollars spent at these markets are turned back into the community. I also see trades and certain skills being bartered. It may be a new business world, and new skills will have to be learned in order to survive in an economy that is no longer backed by debt, but by knowledge and the will to survive. Maybe I'm wrong, but it's worth thinking about. But I wouldn't by traveler's checks. And I don't think I'll be buying gold and silver as of yet.
-- Barb-Douglas (email@example.com), July 13, 1998.
Jim, I've been doing a lot of reading on the subject and it seems those in the "know" suggest keeping 1/3 of assets in cash, 1/3 in gold and silver and 1/3 in bartering items. The gold should be in the smallest form possible and they say old coins prior to '65 are mostly silver and will be easier to trade with. I still can't believe we're discussing this! My family is opting for primarily gold, silver and bartering items. Greenbacks are only valuable as long as our confidence in the gov't that backs them is stable. We're not counting on that.
-- Jenny Moore (firstname.lastname@example.org), July 14, 1998.
It was recommended to me to read a book or two on the conept of money...about monetary systems, their development...anyone out there know of a good book? Now that I think about it it's is amazing to me that education on exchange economics is not taught at the high school level....only nebuluous stuff about banks...as if there was no exchange economy before the advent of central banking....
Anyway...thanks for any recommendations...
-- Donna Barthuley (email@example.com), July 14, 1998.
Good books = Fiat Monetary Inflation in France by E. Dickson White (written in the 1880's about France in the 1790's - stupidity, greed, and ignorance seem to be a constant in human history) Another is The Creature of (from?) Jekyl Island - everything you didn't want to know about the US Federal Reserve System. After you read these two you'll know more than 95% of the population and acording to Mark Twain you'll therefore be an expert, "an expert is a person that knows more about a given subject than 95% of the people, period".
Fun Fact To Know And Share With Your Friends - if every household in the US removed cash from the US banking system, each household would get only $350 per household. If every person that had money in the US banking system pulled out 5% of their money ALL banks would be technically insolvent. Think about the Japanese and 4/1/99!
-- Ken Seger (firstname.lastname@example.org), July 14, 1998.
"Everyone removing cash?" Not at once. Most people in the US live from paycheck to paycheck, and they wouldn't be able to pull $150, let alone $350, from the bank today if they wanted to. These hypothetical scenarios are just that -- hypothetical.
If people pull out a little cash at a time, the cash gradually disappears from circulation & can be replaced by the printing presses.
Jim Kaminski expressed some concern about keeping cash in the house. Good thinking. Why not keep it in your safe-deposit box? If bank runs really *do* get started, you could simply bypass the teller lines & walk out with an envelope in your jacket pocket.
-- Larry Kollar (email@example.com), July 14, 1998.
Except that if a real run starts on a bank, the Feds (or the staties, depending on the bank) swoop in and lock the doors until they sort everything out. They maght start opening up safe deposit boxes and other non-deposit lines of business before they re-open the rest of the bank, but you could get shut out of your safe deposit box for a couple of business days.
-- Paul Neuhardt (firstname.lastname@example.org), July 14, 1998.
For all of you speculating about whether bank runs will occur in the U.S., the Federal Reserve is taking this possibility seriously. In addition to printing money as fast as possible, they have stopped destroying old or mutilated bills in an effort to stockpile cash. The reason for this is to prepare for a "liquidity crisis" (which is the code phrase for bank runs) in the U.S. financial system.
-- Nabi Davidson (email@example.com), July 14, 1998.
Jim, If you're going to stash some cash, it might be a good idea to follow the suggestion on last week's CBN Y2K presentation: pay three months, in advance, on your rent or mortgage....Jan., Feb. and March of 2000. Go to wherever you make such payment, if possible, and GET A RECEIPT IN PERSON! If such payments are sent out-of-state, send a certified check via registered mail. If we're all holed up beyond three months??? Everything will be up for grabs! Ken, an expert is also an ordinary person a long way from home! Larry, IF, IF, IF the banker allows the customer into the vault! Better check that one out in advance. Lord help us all!
-- Holly Allen (Holly3325@juno.com), July 14, 1998.
Nabi: Your news about the Treasury stockpiling old 20s doesn't surprise me, but this is the only place I have seen it reported. Could you provide a source for the info please? Has it been in the media or is it a rumor circulating through the Web? I have a close relative rather high in the banking biz and she hasn't heard a word of this.
-- J.D. Clark (firstname.lastname@example.org), July 15, 1998.
I work for a federal banking regulator. I first heard from a very reliable source that the Fed was stockpiling cash about a month ago. This was recently verified by members of our senior management. I would imagine the Fed doesn't want this fact to be widely known and is therefore not publicizing it.
-- Nabi Davidson (email@example.com), July 15, 1998.
The possibility of a liquidity crisis related to Y2k has been regarded as a real possibility by government regulatory agencies for several months. On January 15, 1998, the National Credit Union Administration issued a letter (No. 98-CU-2) to all federally insured credit unions titled "Year 2000 Contingency Planning". Among other items, it included the following statement:
"Liquidity. As the Year 2000 approaches, members may become concerned about the ability of their credit union to continue to provide services which could result in unplanned share outflow. Credit unions need to ensure themselves adequate liquidity in case of excessive share withdrawals. Since primary sources of liquidity could experience similar liquidity problems, credit unions need to arrange for several different sources of funding."<
"Unplanned share outflow" is bureaucratese for a run on the credit union. Note that they are warning that the normal source of liquidity for the credit union (some bank) may be experienceing the same thing, so the credit union should have several backups.
So it's not just the Doom and Gloomer crowd who think that this is a real possibility. <<<<<<<<<<>>>>>>>>>>..........
-- Dan Hunt (firstname.lastname@example.org), July 17, 1998.
I suggest you start with Andrew Gause's _The Secret World of Money_ (800-468-2646). He sells gold coins as well, and some will say that he is therefore not to be trusted as a "truly objective" source. If you're ambitious you can tackle G. Edward Griffin's _The Creature From Jekyll Island_ - you can get that from Amazon (http://www.amazon.com), and read the customer reviews (mixed) it has received at their site as well. The new 1998 paperback version of the second edition of Martin Mayer's _The Bankers_ is an excellent survey of modern banking though it does not get into the basic questions of what money is and how it evolved in as much detail as other sources. It is also available from Amazon.
Of course, the people on the other side of the question have a vested interest in perpetuating the current system of debt- based fiat money. Does that make them any more objective? You get to decide who is and who isn't objective, and you get to bet your financial future on your choice. Isn't it nice that we have such a wide variety of choices? It all boils down to who and what you trust. Make your choice carefully and with full information at hand.
As to the opening question on traveler's checks, I wouldn't do it. A couple of months' expenses in cash in small bills (who'll have change?) are a good idea if you can manage it. More cash on hand than that is likely not a good idea these days, especially given currency transaction reporting requirements at your bank, the recent history of law enforcement seizures of cash from people- all in the name of fighting the drug war and money laundering of course- etc. If y2k is a major problem, people are likely to be looking for real money (gold or silver) or real goods to swap their real stuff for before a lot of time goes by. And some other alternative to cash will likely emerge relatively quickly- a smart card to allow the use of electronic currency, for example. If it's a minor problem, a couple months worth of folding green will likely get you by. But putting all your eggs in one basket is generally a bad idea.
-- Lee P. Lapin (email@example.com), July 18, 1998.