The original plan we have been hearing so much about was $500 per household, or $50 billion extra cash. How come this report doesn't mention that amount, but only says billions? "Billions" could mean 10 billion or 2 billion! I have a sneaking suspicion that they are going to try to get by with printing less than we were promised. Does anyone know how fast they can print more if it all gets drawn out?

Is there really going to be enough cash? Hmmmm...

-- @ (@@@.@), May 01, 1999

Answers

``I want to urge people to put it out of their minds that they need to take all this money out,'' Gramm said. ``We feel very confident about the banking system -- don't worry about the banking system.''

Just let your eyes follow the watch...

Your eyes are getting VERY sleepy...

When I snap my fingers you will tell yourself; "I will NOT withdraw my money", "I will NOT withdraw my money"...

-- @ (@@@.@), May 01, 1999.

--@,

Now I know I will get jumped on good for this by our disagreeable Pollys, but here's the reality. At last count, it was estimated that there was about $600+ billion cash (paper and coins) in the system. But it was also estimated that at least $300 billion was outside the US in banks, businesses and private accounts. So that leaves about $300 billion available here right now for circulation in daily uses. Now these are not exact figures, but close enough to make the next point. IF 100 million families and/or businesses decided to take out and hold onto cash, that would allow only $3,000 each and all the tills would be empty, everywhere, including the banks, stores, etc. Obviously we couldn't operate with that situation, and it would *seem* obvious that the Fed would pass emergency rules to stop it before it ever got close to that. This ignores the anger and civil upset that usually is part of people being told they can't get their money out "in cash." So, if you agree that even $3,000 isn't much to be stockpiling, and if you agree that it couldn't actually get to that amount without shooting down all the cash transactions we normally expect to use, then perhaps you will also agree that whether the Fed is talking 10 or 20 or 50 billion extra cash, it's meaningless. The only thing that talking about an *extra* $50 billion accomplishes is that it calms down those who haven't taken the trouble to do the actual math. If you already have your own $3,000 stored away, fine, but it won't be there for most of the rest of those who go after it, if they go after it, later this year. Sad but true. You can still write checks and use credit cards, but actual available hard cash has been a "smoke and mirrors" game during your entire life, but most of us never realized it.

-- Gordon (gpconnolly@aol.com), May 01, 1999.

Mr.Decker,

Please note my above reply to --@, and then consider this, that if we use our checks or even cash right now to buy American Eagle gold coins, we will not hurt the monetary system. We won't be hoarding cash if we keep it as gold coins. I'm not sure that I fully understood your previous comment about this matter, but I think even you had a premonition that we would be going back to a mercantile type economy next year. Is that correct?

-- Gordon (gpconnolly@aol.com), May 01, 1999.

Dear @, The money printing presses have been running at full capacity for years, so the idea that "extra" is going to be printed is somewhat false. I say somewhat because they can increase available cash by simply allowing money that is dirty and worn to stay in circulation longer, no this is NOT where the term filthy lucre came from. ;) Others speculate that the FED has a reserve of [$your choice of guesses] that they will use.

Of course all of this is idle speculation since 1.any mass pull out of cash from banks destorys the banks IF banks follow normal accounting and banking rules (BIG if!). 2. people are given their money - people currently do NOT have the right to pull out cash from banks. I've gone into great detail about existing laws on this subject previously. That they are not enforced does not negate their existance. Does eveybody need a recap?

-- Ken Seger (kenseger@earthlink.net), May 01, 1999.

Gordon,

Agreed. If we still need to keep the flow of currency out there being used for business, etc. then there is really only $500 per household available above and beyond that. That is, IF they make available the extra $50 billion that they said they would. What if some of the really wealthy like Bill Gates decide to take a few $billion out and move it to Swiss banks or somewhere that is definitely safe.

Ken Seger,

Thanks but I don't need a recap. What I've heard is that you are not allowed to take out over $10,000 now, and that amount will be reduced if a lot of people start doing that. I don't care that much because I don't use banks, but just wanted to try to determine when people are going to start to panic. My guess is they might be patient enough to wait until August or September, maybe even October, but that's pushing it. A lot of people will plan on November because they think that most people are going to do it in December, but when word gets out that some are planning on taking it out in November, a lot might do it in October. I think we can see how this game works! It really comes down to how much of a gambler you are.

-- @ (@@@.@), May 01, 1999.

Ken,

This is a "live" forum and new people are dropping in everyday. Since we don't have a search engine and what with over 90,000 posts, it's almost impossible to backtrack for vital information. Please do recap the current bank rules, regarding cash withdrawal, if you don't mind. This is going to be a very vital issue in the near future. Let's at least agree that the Fed is concerned this may happen, and they have some pretty good indicators to rely on. So anyone who is not quite sure about their "rights" to cash withdrawal could benefit right now.

-- Gordon (gpconnolly@aol.com), May 01, 1999.

Diversify now.

Do like the big boys are doing: Buy yen (liquidity), or buy Japanese stocks (short term. The Nikkei has outperformed the Dow this year and may rise another 15% in the next 2-3 months), or buy Japanese real estate (mid/long term. Nowhere to go but up).

-- PNG (png@gol.com), May 02, 1999.

"Buy yen (liquidity), or buy Japanese stocks (short term. The Nikkei has outperformed the Dow this year and may rise another 15% in the next 2-3 months), or buy Japanese real estate (mid/long term. Nowhere to go but up). -- PNG (png@gol.com), May 02, 1999." ..uuuhh... 1999? Are you sure that shouldn't be 1979? Have you followed the collapse of the Japanese stock market, banking, real estate, and insurance companies over the last decade or so? Yes they are down, perhaps you assume that Japan is now where the US was in 1933, but further falls are possible and future gains are not certian at all. But, it's your money, a strong difference of opinion is what makes a good horse race(assuming you are serious). Best of luck, I think you will need it.

Dear @, Any transactions, either direction, above $10,000 cash require the filling out of a Federal form. If you don't, you get punished. You can also be punished by "structuring", having several transactions occur whose sum could add up to over $10,000. Kafka would have loved it.

Gordon, the current law is this. You are allowed to withdraw a maximum of $100.oo on the day of the deposit. You can withdraw a maximum of $400.oo on the exact day that the deposited check clears, nothing before, and nothing after. Currently most people's checking account are the interest bearing types, N.O.W. Negotionable Orders of Withdrawl, similar to the old fashioned S&L savings account in which withdrawls in any form can be require a 30 (90?) day advance written notice. Note the Catch-22 there. 30 day notice, $100.oo on the deposit date, $400.oo on the check clearing date whenever that is. All nice and legal. Needless to say banks, etc. are currently doing us all favors by giving us our money. Or what passes for money nowadays. Real money is a storehouse of value. Remember when Car & Driver voted the BMW 2002 the best sports car under $3,000? Some storehouse, spelled s-i-e-v-e.

-- Ken Seger (kenseger@earthlink.net), May 02, 1999.

Ken... I'm not telling you my opinion, I'm telling you what is already in motion.

Massive amounts of money are being invested from some of the biggest funds in the U.S., Europe and Asia right now. Hedge funds are pulling out of Japan. 100% occupied commercial real estate is being bought up by U.S., European and Middle East investors at outstanding prices as banks restructure. Some of the most financially savvy individuals in the world have been buying for months.

I'll be sure to pass your advice on to Buffett, Branson and Murdoch. ;-)

-- PNG (png@gol.com), May 02, 1999.

Haven't seen where Buffet is going but then I'm not a follower, I'm down to reading just the WSJ. Obviously they think they are doing bottem trolling and that Japan 1999 = USA 1933. It WILL be an interesting horse race, and it won't be a oval track, more like an original steeple chase with multiple steeples starting from multiple points. More of a wild ride than risk adverse little ol' me can tolerate. I'll walk.

-- Ken Seger (kenseger@earthlink.net), May 02, 1999.

PNG,

To paraphrase Yardeni, Japan is toast right now, and after Y2k hits they will be burnt toast. Except for rice, fish, and such, they import *everything* they need, including 100% of their oil. They have been in a recession/depression for a few years now and their overvaluation of bank assets and *irrational exuberance* in buying investment properties at top-of-the-market prices a few years ago, has left them virtually bankrupt. While the big players you mentioned may very well know what they are doing, it's not a game for the faint of heart to be putting serious money into Japanese assets.

-- Gordon (gpconnolly@aol.com), May 02, 1999.

Mr.Decker,

I just want to expand a little about gold coins and mercantile economies. Will local merchants know what a gold coin is really worth to them? I think they will. Let's take an excursion into that area. Let's look at a hypothetical 3rd world country, and let's say that their own *official* currency is Meerkats. And why not? We have official currency called Eagles, don't we? Anyway, suppose that the official government exchange rate is 1 Meerkat = 1 US Dollar. If you go to their bank to exchange your dollars, that's what you'd get. But if you go into a local shop (mercantile) and start to bargain for some item, and you say to the owner "What will you sell it for if I give you US Dollars?" you will often find the owner is willing to triple the exchange rate to get his/her hands on those Dollars. True. They know quite well exactly what a Dollar is really worth against their own Meerkats. Trust me, I have been there, done that. =:-}

-- Gordon (gpconnolly@aol.com), May 02, 1999.

Thanks for bringing up to speed on Japan.

-- PNG (png@gol.com), May 02, 1999.