If you take your money out of the bank, how will you make mortgage payments?

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It just occured to me that, if you have a mortgage payment, you may as well keep a good bit of your money in the bank. Because if the banks fail, how will pay your mortgage? And conversely, if you have removed all your money and all you have is cash, how will you send in your payments?

-- puzzled (1@2.3), April 03, 1999


You plan on paying a mortgage to a Bank when all around are going bankrupt, including in all likelyhood your mortgage lender? Are you insane :)

-- Andy (2000EOD@prodigy.net), April 03, 1999.

Try figuring out how to keep looters, rapist and daylight robbers from taking advantage of the " No One Works Anymore ", including the police. No Banks = NO CHECK cashing = NO taxes paid = NO PAYCHECKS for cops, fireman, ETC. . THEREFORE , why would anyone go to work to defend/help others and leave there family without protection ??? You better start thinking anarchy as a possibility in full swing by next February, and what will you eat when the hybrid seeds (98% of ALL that are planted) DON'T arrive from South America next spring. Eagle .... Got NON hybrid seeds ??? I HAVE !!! Know where and how to plant same ?? Got tractors WITH PLOWS ??? YOU HAVE TO PLAN IT OUT NOW !!! I have.

-- Harold Walker (e999eagle@freewwweb.com), April 03, 1999.


If you think about this for a few seconds, you might be able to supply a better answer. True, if everything goes up in a big ball of flames at midnight, there will be nobody to make this payment to. No problem there (although your spending choices might be limited).

However, most scenarios of disaster involve the economy grinding to a halt over a period of 6 months to 2 years. Presumably bill collectors might still be active during this period, and will expect their payments.

Maybe a better plan for this period is to take the payment to the bank (which is mortally wounded, of course, but may not know it yet), and writing a check against this new deposit. Be sure to get receipts for everything.

-- Flint (flintc@mindspring.com), April 03, 1999.

If all goes to hell in a hand basket, the value of your house is likely to be less than the amount of your mortgage. Still going to make that payment? Besides, if the Post Office is not working, how are you going to "send" it? Most mortgages sold thru your local bank are sold to big mortgage companies who generally are half way across the country from where the house is that you "own".

-- Valkyrie (anon@please.net), April 03, 1999.

During the depression, the majority of those who lost their houses lost them because they could not pay the property taxes. I would recommend taking money out of the bank so you could make some payments on taxes due.

Putting some money in precious metals is a good way to balance the risk. If "nothing happens" or "bump in the road" you might lose 5-15% of the money invested. If things get really bad, you can increase your holdings by a factor of 3-10. So if the stuff does hit the fan, you can pay your taxes. If someone does show up at your doorstep from the mortgage company, you could, if you wanted to, pay him or her.

-- David Holladay (davidh@brailleplanet.org), April 03, 1999.

the bottom line of the choices you give is: would you rather have your cash in hand and not be able to pay the mortgage? Or would you rather the bank had your money and not be able to pay your mortgage. Its a no brainer if those are the only two options. Think about it and you will come up with options. I think you need to think of lots of scenarios and then come up with options. One should always have more than one option and more than one iron in the fire. Stretch you mind and play "what if" games. Not too hard to do if you are watching CNN today.

-- Taz (Tassie@aol.com), April 03, 1999.


Good point. We need to bear in mind that all possibilities we can think of are NOT equally likely. If you can think up twice as many scenarios tomorrow as you did today, this still hasn't changed the probabilities at all.

You will notice that even Yardeni's worse case (at 5% probability) comes nowhere near the total breakdown scenario. Nor does Yourdon's. From a sane reading of all the material available, there would appear to be a 99.99% probability that there will be some period of time during which payments would be still due. Insane readings would render your money worthless anyway. Don't burn your bridges.

-- Flint (flintc@mindspring.com), April 03, 1999.


One way to cover a few bases is to pay some bills in advance late in 1999 (if you can set aside the money to do so). Depending on your situation, these might include mortgate (or property taxes), utilitiy (gas, electric, telephone), etc.

FWIW, some people plan to keep some money in banks, several different banks.


-- Jerry B (skeptic76@erols.com), April 03, 1999.

screw the banks,you think they will give a crap about you?

-- Daryll (Daryll@nospam.com), April 03, 1999.


Only if they want to stay in business. In that unlikely event, they may be inspired to provide banking services to customers. It's possible.

-- Flint (flintc@mindspring.com), April 03, 1999.

Flint,I think they will be to busy trying to feed their family,to care about anything else.Daryll

-- Daryll (Daryll@nospam.com), April 03, 1999.

"Everything goes to hell in a handbasket.."

"If it all goes up in a ball of flames at midnight..."

[ Do any of you people ACTUALLY beleive that is how the world works?? I mean come one, it took the Roman Empire a hundred years to fall apart... I'd say that even if things did go wrong it would take something like ten years for things to get as bad as you all think, short of global thermonuclear carpet-bombing. Let's have a little clarity of thought here okay? ]

-- (~~@~~.com), April 03, 1999.


You'll understand the context better if you read the whole post.

-- Flint (flintc@mindspring.com), April 03, 1999.

Hey ~~~@~~~,

Has it occurred to you that we HAVE been watching the decline of our "empire" over the last 100 years. We (the US) have been on the same downward trend of previously great empires for the last century. We have seen the degradation of personal rights and responsibility for at least 40 years. The center of power has become more powerful and separated from "the people" than was ever intended by our constitution. A good example is the President's ability to "declare war" without congressional approval. This is blatantly repugnant to our constitution. We could also mention the total decay of morality and the family structure... all are symptoms which visited our great predecessors like the Romans.

-- Justa (justathought@idea.com), April 03, 1999.

If you take your money out and have cold hard cash- just go and get a money order for your mortage payment. If you can't even get a money order because that's non-functional, probably your mortage holder is as well.

-- anita (hillsidefarm@drbs.com), April 03, 1999.

Correction, Anita. If you take your money out of your bank you have some cold hard paper. It may have value, or it may not have value. No one knows now.

Why does anyone want to run to the bank. There is nothing of value inside.

-- dave (wootendave@hotmail.com), April 03, 1999.


OK, what do *you* buy things with?

While there is in theory a tiny probability of any awful thing that's not totally impossible, and while it's fun to dream up vanishingly unlikely such events, we're still best advised to gear our preparations toward the most likely future.

Tell you what -- let's make a bet. If cash still has value in a year, you give me $500. If cash is worthless, I'll give you 50 cases of canned food. Deal?

-- Flint (flintc@mindspring.com), April 03, 1999.

Dave- Puzzled asked a question regarding the logistics of making mortage payments without keeping money in the bank.I don't believe he was asking to start a dialogue re: if money has any intrinsic value.So- I stand by my answer- get a money order.

-- anita (hillsidefarm@drbs.com), April 03, 1999.

If there is still a functioning government, but the economy is depressed, I wonder if people will so docilely give up their property to the tax collectors as they were in the 1930s? Even then, there was some resistance. But, then, most people respected the government (fools that they were). After Y2K?

"Unintended Consequences" John Ross (see book review/order from www.loompanics.com or www.amazon.com).

-- A (A@AisA.com), April 05, 1999.

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