I noticed in the Sydney Morning Herald an article with the IMF warning banks to have a good supply of currency as they predict a run on it if/when BF pandemic hits.
What is your plan? what is the best plan? I am thinking about increasing my amex! any other thoughts out there that are more sensible? (of course gradual prepping helps prevent that big rush of supply expense)
My assumption is that, just like food, you need a commensurate amount of cold, hard, currency in spendable denominations, like $20 USD bills. So if you’re prepping for 3mos you need to plan on that much currency as well. Hard to do, but without it you might all of a sudden have to barter away some of your stockpile in an emergency.
For the most part, with the preps that we’re all making, the currency should only be needed for fixed cost items like rent/mortgage, paying on current credit card debt, water/power, etc.
But there are always emergency supplies (at 3x the price), bribes, black market, etc.
The other thing that all of us should remember is it is well within the power of the US president to declare a “bank holiday” during crisis periods that will suspend any and all withdrawals of cash from your bank, as well as any other transactions such as credit cards, etc. FDR did this in 1933 to prevent runs on the banks. So if you’re going to get cash out, you should prep your cash reserve ahead of time just like your other supplies.
I have made all my prep purchases with credit card. If this thing hits “big”, they will have to stop(suspend, defer) payments of all types until things subside. I have done this so that I can have all my cash available….in a secret place…out of the bank of course because there will be a “run for the money”…..and banks don’t have a big reserve of money to give out….so imagine the lines and there surely will be “limints” on how much one can take out…also as already stated the president can declare a “holiday” to stop all withdrawals. Im sure that credit card companies are shaking in their boots…so much debt and they will stand to loose so much….so, as you slowly prep, slowly take your money out…..good luck to all!
Folks maybe I am missing something but IF there is pandemic where are you going to spend your cash? Are you going to be leaving your home? I think cash may be the minimal problem. I would suggest usining internet and credit cards to pay bills and such.
BP-I think the concern is should people run out of critical supplies during the height of the pandemic, they’ll be forced to go out to purchase them. Or, if critical items around the house fail (eg, water pump, burned out flashlight bulb, propane burner), they’ll be highly motivated to seek out replacements—even in the face of infection.
You’re correct in implying that “regular” commerce (eg, restaurants, theaters, retail outlets) will cease to exist (or exist in a very different state) during portions (or the duration) of the pandemic, should it occur with the ferocity many expect.
I have a question, what to do with my savings in the bank. Leave it there? Take it out? I don’t want to have lot of money in the house.
Prep in midwest - as long as it’s a stable bank today, leave it there. After this is all over you should be able to access it.
But you may still need some cash to tide you over as Eeyore indicates.
If you’re an investor in stocks, etc. you certainly might want to discuss your views with your financial analyst/stockbroker to see about ‘conservative’ parking places for your funds.
“Stable bank”? If this is really bad, which we don’t know yet, banks that have loaned out money to businesses and individuals that all can’t pay, ect, well… even the federally insured banks would have months to get your money back to you, and I’m sure the feds never planned for something national and global like a 12-month or more “blizzard” Dr. Osterholm decribes.
Other discussions here: http://www.fluwikie.com/index.php?n=Forum.FinancialAndMarketImpactStudies
http://www.fluwikie.com/index.php?n=Forum.FinancialSurvivalPlan
http://www.fluwikie.com/index.php?n=Forum.GlobalEconomicStrategistSpeaks
http://www.fluwikie.com/index.php?n=Forum.HowMuchCashOnHand
http://www.fluwikie.com/index.php?n=Forum.WithdrawlOfMoneyFromTheBank
(I may have missed some. )
Jquest, thanks I was just worry about loosing my money. Yes the bank is stable today, FDIC insured..etc., but I am constant worrier. Again thanks.
The luxury of being able to just stash away months and months worth of extra cash to pay for bills in the future is something most Americans can’t do. I read somewhere that only 10% of american families between the ages of 25 and 55 have ANY savings. Most live primarily paycheck to paycheck. -and that is usually with both parents working!
I may be just 2 paychecks away myself at the most at any one time… and any extra cash lately has been going towards preps. Like many others, if I can’t work for extended periods of time, I’ll be financially screwed. :(
Maybe the price of homes will come out much cheaper on the other side of this. There must be some sort of upside… like after the great plagues, many survivors actually ended up much better than before it hit.
-maybe we’ll see higher pay rates for skilled workers, affordable housing, less school crowding, who knows.
Eeyore – at 09:41
“Going out in height of pandemic” is not much of a plan.
TreasureIslandGal – at 10:27
I am afraid to say at the other end of a POSSIBLE pandemic would be much worse economically then before. Contracting economy is NEVER good. Think depression not recession.
BP - at 1036
No, it’s not. But despite our best preps and plans, I fully expect I’ll forget something I’ll want during a pandemic. I also expect something I didn’t anticipate to fail will—and I won’t have a spare.
Will I go out and get it? Depends on how badly my family needs it.
You earlier asked why people would need money during a pandemic. Money (just like a home-defense weapon) gives you options. You don’t need to select that particular option if you don’t want to; but at least you have the choice.
Eeyore – at 10:45
Don’t think I asked why you would need money. Money comes in different forms other than cash. I think cash seems as vehicle a little personal. Folks may not take cash due to fears of “contaminated money”. Furthermore, it requires a almost a face to face transaction. Debit cards may be better as you MAY be able to order your product online and have it delivered. Also of course there is the safety question if anybody knows you holding on to significant amounts of cash.
BP - you’re correct. I mis-read your initial post (you specified ‘cash’ not ‘money’).
We may be envisioning different scenarios from BF. My context was a temporary breakdown in the financial infrastructure that would allow debit and credit cards to function. Cash or precious metals would then be used (or barter). I inferred your comments to mean you think/thought the finacial infrastructure would continue to operate throughout the potential pandemic.
I hadn’t cosidered it initially, but you pointed out that cash might be viewed with suspicion due to contamination. I suppose we could generalize that to anything that must be touched to complete the transaction, right? You might be wearing gloves at the time of purchase, but that’s no guarantee you wore them earlier. Cash, precious metals, barter items could all be suspect at that point.
BP, if electricity is out in your area for whatever reason or duration, some things will not function.
Also, people may not be at their jobs to produce and deliver products, or, make banking transactions work, due to illness, transportation problems, security problems, caring for family members, ect.
Yes, I do see a very bad pandemic if it gets a lot of the workforce/infrastructure age and their kids possibly causing another Great Depression, at least for a while. It might not happen, but I’d rather be very cautious, and have been able get rid of debts and just have expenses. (I keep forgetting to ask the Postmaster how long they think they can deliver the mail if pandemic occurs…)
Eeyore – at 11:13
Yes that is correct, I do believe financial infrastructure will stay intact. The money boys (and girls) will see to it. Yes, debit cards and such could have the same problem however as I pointed out I would highly recommend using the internet and paying bills online and ordering anything you need in the same way. Besides plastic is easier to clean than paper! It is all based on your personal risk assessment.
crfullmoon ….”causing another Great Depression, at least for a while”….
yes “the” prediction is now
Pandemic would drop global GDP growth by as much as 6 percentage points
crfullmoon – at 11:25
I may be wrong however I do not subscribe to the point of view that electricity and such will be down for any length of time. From my study of history it is amazing what ingenuity and perseverance will do with proper motivation.
The big banks (in Canada, at least, probably elsewhere) are among the only corporations who have made extensive contingency plans.
I am going to assume that the US banking system will hold up. I remember reading that there are banking rules that require an FDIC institution to reopen their doors within 3 business days after an incident like a natural disaster (but that could be countermanded by the President as FDR did to stop a bank run). I do not plan to use on-line management of my checking account. Coming from Silicon valley, I don’t trust opening up my finances in the checking account on line. However, I will expand automatic bill payment to include utilities as well as my healthcare and my house payment. My pension check is automatically deposited and I will work out some auto transfer of funds to cover the auto payments.
Further evidence of significant h2h transmission beyond what we know now will put me in cash from an investment perspective.
I was in a branch office of a huge, international bank last week. They were near panic because a system-wide software upgrade the previous night had crashed much of their ability to record transactions. It was 2 PM, they were still having to make paper records of everything, and expected to go back and update the system as soon as it was working again.
Somewhere on another thread I saw the comment, “We may be nearing a time when a can of beans on the shelf is worth more than a dollar in the bank.”
BP – at 11:36
Actually, the power doesn’t have to be down very long or very extensively to introduce possible problems. Stick your credit card into a gas pump, present a check to a store clerk, swipe your debit card, etc, and you set in motion a complicated - and electricity driven - process as computers read off data and transmit it over phone lines and satellite hookups to other computers who check and make sure that’s actually a valid account, the card wasn’t reported stolen, etc etc. Should the power go out for any of these steps, or unexpected outages or brown outs introduce glitches or failures in the system, cash alternatives may not work and you may have no choice but to bring out the green stuff. And if you don’t have some of that green stuff, you may be out of luck…
(One thing to consider in storing up a cash reserve is that the person you’re buying from may not be able to break that twenty or hundred dollar bill, and you may want to have lots of different denominations and even some change so you can get as close to the asking price as possible.)
crfullmoon, so if someone has for instance (and this is just a number) $80, 000 in the bank, you think they should take it out and hide it in their bed? By the way, thanks for the other links.
ALL.
Do not discount the protective nature of credit finance companies.
Considering how poorly the credit card industry is doing (you’d be surprised) do not be surprised if they all mutually have an understanding of what they’d do to credit limits and per/transaction limits if/when TSHTF.
People making rash and massive purchases (which is something they normally love) with the prospect of many unemployed and/or deceased card members… imagine it from their viewpoint.
So do not hedge your emergency finances on a credit card during widescale panic.
my 2 cents
Something I don’t think was discussed…
In the early stages, a prime reason to have cash, or more specifically exact change, is so you don’t have to handle someone else’s money. Maybe it is like mail, that you could leave it lying around for a few days and then safely handle it.
I’m not worried about getting money out of the ATM. I am worried about currency being contaminated. If I pull money out ahead of time it will be specifically for those purposes for which I can’t use my debit card, like ransom at the parking garage.
It is probably a good idea to have some amount of cash at home before things get too bad. That point will be up to the individual to decide.
The reason I say this is if there is a problem, stores are at their own descretion of whether they will run credit cards and accept checks. This may be particularly true at gas stations and grocery stores.
They may use the “cash only” scenario to prevent people from hoarding and from emptying the shelves. A kind of modified rationing system … they are rationing without really saying they are rationing.
What will happen to people who receive food stamps and WIC and such like I’m not sure. Will they be able to continue to use them? Maybe, if the government specifically says they will honor them. But it would still be up to the individual company to say whether they will accept them.
I suspect that there is no single answer and that we will find a lot of different “solutions” to the same problems.
Kathy,
In Illinois they have the “Link” card.. it’s a ‘debit card’ that gets an updated balance every month, so the gov saves on printing costs, and it isn’t so easy to trade stamps for non-food items (not like bartering doesn’t happen, but the system helps.)
Yes I agree - it will be a mess regardless.
I think that alot of smaller stores and businesses will have “cash only” signs out front once the pandemic hits. Why would they want to bother with credit (possibly bad credit) when they can sell what they have left at a premium price to a person with cash?
Look again to what we learned from Katrina and Wilma…..gas stations had signs out “cash only” almost immediately.
I am putting away about $50 a week in my drawer in small bills just to have on hand for such things.
Gold is another option.
Speaking of gold - someone here or in some other site suggested a bag full of cheap gold rings… brought up a good point that it’ll be hard to get the value back out of pure gold stock, but the return should be pretty good for generic jewelry.
I make no guarantees to the value of that suggestion: past performance is no indication of future perfomance and man, indeed, landed on the moon. I was there.
IMO, gold may be a good vehicle for holding wealth for the long term, but it will be a lousy means of buying gasoline, food, paying utility bills, etc. What seller is going to have the ability to verify the authenticity or grade the value of your gold bars, heirloom jewelry, or Krugerands? Cash in small denominations (no bigger than $20 bills) is an essential part of your preparing. A fairly safe place to store it would be to buy a fireproof lockbox at Wally World and then hide it under the insulation in your attic. What thief is going to think to search under all of your attic insulation, or even have an inkling to look there (unless you are a thief reading this thread-LOL—and, if you ARE, I live in Cincinnati). And, if I DO have to spend my money and purchase something essential I will be wearing my mask and gloves and I would hope the other guy is too. And, before I bring anything in I will spray it with Lysol or a water/bleach mixture.
One thing I’m doing is working OT to pay for preps, pay down my debt, and sock away $$ for the mortgage and health insurance, not that I expect to USE the health insurance in a pandemic, but rather that it is unlikely that I could be re-insured if I lose it. I have dropped frivolous spending to almost nothing (eating out, trips, doodads etc.) I have insulated my house further and got plumbing repaired. I also am keeping a couple hundred in cash at home, and will have some in accts I can access on line to move around if I need to for some reason.
Don’t know if any of this will work, just trying to cover my bases and do what I can now. I will continue to try for as much OT as I can get, at least until Fall or TSHTF or I become convinced the whole thing is a fizzle. In which case I should be working OT a long time…
Utilities (gas, electricity, water)and mortgages are all on bank drafts. When it appears that TSHTF is imminent (first confirmed H2H outbreak?), along with my final ‘topping off’ duties, I plan to transfer emergency fund money out of money markets and into the checking account. 401K and IRA equities go to cash at the same time. I’m watching for opportunities to turn non-exempt equities into cash (money markets) now to bolster the emergency fund.
Instead of an ATM I use a fire safe for a portion of my cash. Sometimes pictures of dead statesmen make deals work like nothing else. (And, it’s available 24/7.)
Cookie jar money (from emptying pockets at night for 10 years) might be handy, too.
I would suggest that we should check with our banks now to find out what their contingency plans are in the event of the BF. My first concern would be that depending on your bank and type of account you may be required to “give notice” of your cash withdrawal. It could be 1 day, 7 days or 30 days which for you could be a problem; on the other hand the banks need to prevent a run on cash. Know what your daily and weekly cash withdrawal limits are over and above the “give notice” mentioned above.
Consider having coin on hand; paper money is filthy and banks may cull paper money during or after BF.
I suggest using credit and debit cards as long as able & hold on to cash. In bartering you may not be able to spend the cash but when things ease up you can help get the economy going again.
Get your debt down now if possible so you can bounce back quickly down the road; those with the best credit will be the first to bounce back. Pay off the mortgage if possible (I know) so no matter what you have a roof over your head; I realize that others will say don’t pay down credit but I personally think that is short-sighted. You’ll wait to the end of the line if you choose that action.
I agree that gold (not certificates) is only useful if all hell breaks loose.
Consider alternative currencies - which one is your guess. US dollar is consider by some supreme but you can’t predict the outcome of BF.
Don’t keep all your eggs (money) in one basket.
Be prepared to barter for your needs to eliminate cash requirements.
Think 3 months to 18 months; not just the next week i.e. budget.
luckily, I don’t have to worry about any cash flow.Mine “flowed” long ago..But I do think keeping cash on hand is a good idea..Just in case…
The companies which operate those credit/debit card verification machines have trouble on heavy shopping days and they are going to be plagued with the same kind of absenteeism everyone else is.
Here’s something to consider.
I know, from family experience (and employment), that credit card companies can be a bit devious. If you are behind and they call asking for a check number so they can “auto” your bill, they’ll do 2 checks instead of one. They do “warn” you that they are going to do it, but do it in such a way that you never really heard it… point being they know that when it comes to delinquent accounts - the odds are you are going to go bust. So their theory is: the first one to suck all your money out is not the last one who has to write off all that debt.
Crappy truth about credit companies. (It’s like working for the devil…)
Anyway. Keep that in mind!
If this gets *that* bad, and companies start floundering…
Let’s put it this way. If you find yourself out of work and need to prioritize your bills, you know, housing and electricity over that Department Store card… if that department store has access to do auto-drafts from your checking - nothing short of closing that account will stop them.
If you must do that - open a second free checking account and have the money drafted from there as you transfer the money to it from your primary account.
Let’s be clear - this is only a concern if TSHTF. IF - I repeat - IF the government goes under (which I wholey doubt (or hope)) then forget banks entirely - Uncle Sam won’t be available to bail you or anyone out for a very - very long time. Start weaving baskets to provide yourself income… :)
Credit card companies in the USA are always sending out offers to write “convenience” checks up to your maximum available credit card limit. Many of them have 0% interest for an introductory 4 or 5 month period. You could always take a “cash advance” - and if the bird flu doesn’t happen - put the money back prior to the end of the intorductory period, and you have essentially had an interest free loan - plenty of cash, just in case.
it’s nice to see so many preppers are fiscally responsible. I wish I was. I was once middle class. then I slipped down into the upper lower class. My wife lost her job in December, and we live in the county with the highest unemployment in the state. (15.9%) In the #4 state with the highest unemployment in the nation. (6.6%) Now I am middle lower class. I plan to cash my last check when the panflu hits and just stay home from work. I don’t plan to pay any of my bills. If the electricity and gas are off anyway for whatever reason, why pay. If they want to forclose on my cardboard mobilhome, let them come and have it, along with all the empty trailers already defaulted on. there are plenty of empty places to squat, the kids are grown and on their own, and I’m too old to worry about credit rateings. I’ve lived cash and carry for a long time now. (four ex-wives = bad credit/no credit) so if we survive the flu, we’ll just take to the road and see what life brings us.
Retired - love your outlook! Eventhough things have “slipped” financially for you, you still have the right attitude to weather just about any crisis.
Hopefully for most of us who are prepping, we won’t need hoardes of cash because we have most of what we need. I am planning on taking out a little extra cash everytime I go to the ATM and stashing it out of sight (so I won’t spend it!). It’s also time to cash in all those coins we collect - by the time we fill our jar it adds up to a lot! That will go into the fund too - it’s almost like free money!
LauraB-
I pick up all the coin I find as I sweep the parking lot at work. (fast food). It adds up to almost eighty dollars a month most of the time.
retired-I’m going to start leaning the local parking lots for free now!
Financial recovery, after the flu has passed, will be very, very slow. Just look at New Orleans. They are still a long way from being on their way back to normal. My plan is to have cash on hand for the recovery period in that I agree that there will not be much to spend money on DURING the crisis. I don’t want to depend on my credit cards in that the companies may put a freeze on spending (they will be nervous about recouping their losses too). Cash will rule during recovery. Bartering will rule during the crisis.
Ceredwin – at 20:44
I think you are setting a very good example…working OT to pay down debt and give yourself a financial cushion will put you in good shape for WHATEVER comes your way.
I know that not everyone has that option, but with careful planning (and some sacrifices) most people can come up with a few extra dollars each month for debt and savings.
I seriously doubt that cc companies will be harassing you during panflu, foreclosures and repossessions will be next to nil (IMHO)…but, as soon as it is safe to emerge, business will continue. It would be horrible to survive panflu, only to come out on the other side and lose the things for which you have worked so hard. Even if you can only pay a token amount each month through panflu, creditors will be more likely to work with you on alternatives in the end.
Of course, I’m all set…I was just notified that a long lost relative in Nigeria has pased away and left me a whopping inheritance. I have given them all my personal information and am just waiting for my billions to be deposited…;-)
People seem to have come to believe that you can’t buy anything these days with anything less than paper money. any coins they get handed back in change at the drive thru window they just toss on the ground. It used to be just pennies, and the occasional nikel or dime. but now I get a couple of dollars a day, three or four days a week. I don’t know why people don’t want to carry small amounts of coin, But I’m not too proud to bend over and pick it all up.
FDIC is insured but not for much, only enough to cover about 1 1/2 percent of current depsoits, and there is a $ cap on individual acccounts as well. When/if this looks like its coming down, I plan to withdraw my savings and slide it right into a safe deposit box. I do have cash at home in a safe as well, in $5 & $10 dollar bills and gold & silver coin & bullion, plus a paid off credit card witth 25k credit available. Don’t know what else I could do to be prepared $ wise for all possibilities.
Retired, Where do you bank? I’ve never looked. Will get a cup of java, or pass it on to panhandlers when I go to NYC. Nothing better than spring or autumn in NYC..
Hey, I once paid my Guatemalan “exit’ tax in American quarters when I was out of local money! Saved the day and hubby hasn’t complained about me and my change since! Re flu : one of the things we are doing is ‘consolidating’ homes with my Mom- not sure yet who will move in with whom. Smaller utilities, shared preps, etc
Has anyone thought about moving some of their investments out of US currency? The US dollar is declining… that’s why it seems gas prices are going up, etc… the actual value of oil hasn’t changed much. It’s that the US dollar is worth less and so you require more of it to buy gas, for example.
Maybe one of the things we should be prepping with is skills. E.g., I’ve been through a thought process that says, well, if there’s a bad pandemic on the way and I decide to leave work before my employer shuts down, and I get the sack as a result, does it really matter? I can survive during the pandemic without income, and afterwards, if it’s as bad as that, well there’ll be vacancies and I’ll be a good candidate… That’s an easy reassurance in the case of a moderate-to-severe pandemic, such that in the medium term life gets back to normal. But in the (unlikely, I think) event of a real civilisation-buster of a pandemic, my job (academic researcher) is not likely to be a priority. So what else could I do? I have various skills, and one thing I would do in the course of a terrifying pandemic would be to brush up the ones I consider myself best at and that I’d prefer to be using and write a version of my CV that would give me the best chance of getting a job using them! Because however bad things are afterwards, there will still be jobs and some of them will still be more rewarding/worthwhile/interesting than others, and the people who put themselves forwards as qualified for particular jobs will still be the most likely to get them, and even if - especially if? - I’m the only person I know still alive, I’d rather have an interesting job chosen by me than a boring one randomly assigned to me. Anyway, I’d rather think about that than about the best way to commit suicide.
Please don’t think about that too much, or, get help to get that off your mind.
And as an academic researcher, I bet your do have a lot of smarts and skills, and can find, make, or get handed on a plate some job you find worth doing, short-term at least. Just some general info about survival and science, common sense and problem solving may be in short supply.
EOD: FDIC used to insure up to $100,000 per account. It may be higher than that now.
Suggestion with the Safety Deposit Box. Make sure your loved ones know where the key is. You may also want to have their name on the safety deposit box account.
Just had to probate my mothers estate and getting the contents of the safety deposit box was a real nightmare…from finding the key to having the authority to remove the contents.
Leave a copy of what is contained in the box which the executor of your will (numbers on stocks, bonds, CD’s etc); amount of case; listing of jewelry, etc.
The bank will “freeze” the safe deposit box once someone dies and there is no getting into it until you have gone through the entire legal process. Having it all out in writing with your executor makes this process easier.
Suggestion to do the same for all of us that are stashing cash and valuable around the house in anticipation of the pandemmic. We are assuming that WE will be alive to use this money. Just make sure we all have it in writing where things are located in the event this is not the case. Again, I am still not sure where my Mom hid most of her things prior to her death. I have nightmares that heirlooms are hidden in rafters in a house that no longer belongs to our family.
Janet
“EOD: FDIC used to insure up to $100,000 per account. It may be higher than that now.”
That is still true however, overall they only enough to cover about 1 1/2 percent of current depsoits. THe FDIC insurance was set up to provide for the collapse of individual banks, not for anything this could potentially do.
City Slicker – at 00:08
“Credit card companies in the USA are always sending out offers to write “convenience” checks up to your maximum available credit card limit. Many of them have 0% interest for an introductory 4 or 5 month period. You could always take a “cash advance” - and if the bird flu doesn’t happen - put the money back prior to the end of the intorductory period, and you have essentially had an interest free loan - plenty of cash, just in case.”
Good plan, tis exactly what I have been doing since last fall. I have a pretty good safe bolted to the concrete wall in a basement closet with enough cash to cover mortgage & all bills for about 3 months. Plus I currently have 12 days sick time and 6 weeks vacation time saved up where I work and my wife is a school teacher so we are both as set as we can be for taking an extended time from work and hunkering down at home.
Ive worked overtime since last fall. All the extra money has gone to preps and savings. I will have God willing by Sept 06 1 years of expences saved [pared down expences] We are fortunate in that we have no debt so besides property taxes electric, heat and phone and relacing food stuffs and Rx meds were ok financially. But working all the extra hours has been a strain - Im not young anymore.
What Im sugesting in a round about way is that the option of taking a extra job or working overtime is a feasable plan. I dont know why more people havent thought of it. Even an extra $150. a week x’s 52 weeks = $7,800 extra, that pays a lotta bills!
janetn
Good advice! I work full-time for one organization, about 45 hours per week, but also have a personal chef business on the side. Pretty much all I have done are home and business dinner parties, which are a ton of work but pay very well. For the first time I have also taken on one close to full-time client. I prepare 5 large meals once every three weeks for them; they love it and its a good cash flow for me. For the past 6 months ALL of that extra cash has been going to pay off a couple of bills. With this new client however, all of that will go either into savings or more prep supplies.
I took a look at this with my financial advisor with respect to our IRA’s etc. that I’ve saved up for retirement. I’m 48. One thought: invest in sectors and companies that might actually (or relatively) thrive in the event of pandemic. There are bound to be a few. I’m pretty tolerant of risk, but neither of us could find anything that gave us confidence that anyone really knew how to invest for growth in this situation. So, I decided to go with US Treasury backed CD’s. Pulled everything out of mutual funds and went to a three year plan with 1/6 maturing at 6 months, 1/6 maturing at 1 year, 1/3 maturing at 2 years and the final 1/3 maturing at 3yrs. I’ll make between 4–5%. I’m preserving capital. If things change, for the better, I’ll gradually get back in to the market.
Adirondack, are you 100% in US T-backed CD’s?
It might be a good idea to keep some portion in gold or something other than US-dollared debt.
Just my 2 cents based on reading I’ve done — I’m no financial expert.
ricewiki - Yup, 100%. Consider the situation where the US government’s treasury would decide it couldn’t honor its debt. It would be so TEOTWAWKI that unless I had the gold hidden in my back yard, I’d still have to hope that the paper that says I own it would be honored…
So, I’m comfortable.
I do have 50 acres though, so if you want me to dig you a hole with my backhoe, i’d be glad to rent you some space…VBG
Even without PanFlu the market is due for a correction. What is it now? Four years without a significant correction? And today the Dow hit a six year high…not too far from an all-time high. I felt like it was time to take some profits and move toward safer ground.
My largest investment, my 401k, has limited options, but I traded a third of my equities for bond funds and money market funds today. I’ll try to move the remainder out of equities at the same time I start “topping off” my prep supplies or sooner if more signs of an impending correction appear.
For IRA’s, SEP’s etc. I wonder if there is an option to somehow rollover to Euro based IRA’s, if there is such a thing?. I read (but not really understood) that the security of the US dollar is iffy in the future. I’ve inquired about safe parking places for retirement funds to our financial advisor, but honestly he seemed clueless. Said he would look into it and get back with me (2 weeks and still waiting). Considering he’s probably been collecting commissions on our contributions for the last 25 years, it’s a little annoying. Maybe since NY Exchange has issued concerns to it’s members about possible pandemic, maybe some in the “know” will visit the wiki and offer some suggestions. : )
You bet the security of the greenback is faltering….it’s lost over 25% of its purchasing power in the last six years or something against other currencies.
Don’t depend on your financial advisor! Get a book and read about it and become your own expert. ITS YOUR MONEY.
Get out of mutual funds with huge MER’s (management expense ratios) and move into INDEX funds if you’re gonna be in funds at all. Acceptable MER’s are 0.75% and lower.
ETF funds are even cheaper than index funds. With ETF’s, the MER’s get as low as 0.10%! That saves you TONS of money over the long run.
Cabingirl RE Euro’s….From a currency trading perspective, I think some people make a case that the Euro will grow in value relative to the dollar, but if you’re attempting to protect asset based on a potential recession/depression (global) the Euro is no safer than USD, I’d think.
But the only investment that can truly protect against inflation (and deflation) is gold. You don’t have to own it physically and store it yourself. You can open a pooled allocated account and have someone else store it for you. Yes, you have to “trust” the documents that say you own it, but then so too you also have to “trust” that your bank will let you access your safety deposit box, etc., etc.,
Adironack
To some extent you are right. Just another reason to buy gold. Gold will be immune to such probs.
Isn’t us dollar value somehow related to oil futures, thereby making Euro safer? Seems we are stretching our luck there. anyone recommend a good book or two that would help a layperson (and I mean l-a-y)? RE: gold, thought the price was through the roof right now (25 yr. bubble?). My luck, I’d buy and lose it all tomorrow. God, I ‘m worried my little brain cannot expand any further. Not sure how people are wrapping their arms around all this. BUT….appreciate any/all advise I could get. You know……..you people on the wiki are so smart, it’s just scary. There, I said it! I know others are probably thinking the same. Thank you for sharing !
Cabingirl
I would suggest just walking into the personal finance section of the nearest Barnes and Noble and scanning the books to see what strikes you — it’s hard to say just what to recommend for you.
Gold is high right now. It’s breaking records every week. But the point is, it goes higher almost in direct proportion as the US dollar falls. Gold, in my understanding, is like the “rice and beans” of your preps. It’s not speculation. It’s like, the bedrock of your financial portfolio. But that’s just me. I’m no financial professional, just an auto-didact here.
Gotta pick up my “where there’s no doc”, so will browse the finance section too. Thanks again.
Cabingirl
There might be something like “Precious Metals For Dummies” there. That would be a good start — I find the Dummies and Idiots’ series to be really good introductions.
Keep away from anything that looks too technical at first. No need to bog yourself down with lots of details yet.
The Rich Dad, Poor Dad series is also well-done and written for beginners, but it covers broad-spectrum finances, so a bit of everything.
It’s been a bit since I’ve looked, but I bet now there are at least a few books on gold itself.
If I had any money to invest, I’d be in CDs and out of equities and I’ve been saying that for over a year absent any bird flu issues. The markets are out of balance and will correct and I wouldn’t want to be around for it. The Dow is pushing the top end again while the fundamentals don’t support the top. Read Steve Roach. He’s writing for the institutional investor who can take a whole lot more risk than can the small investor. Morgan Stanley is generally conservative in their advice and Roach is considered a bear.
Actually… one of the best “in layman’s terms” discussions on the instability of the US dollar from the likely change in oil transaction settlements moving from the US dollar to another currency is in the book - “The Long Emergency” by James Howard Kunstler. There is an excellent discussion on the US dollar as the reserve currency and it’s critical dependence on remaining the currency of settlement on oil trades… to remain valued. I would strongly encourage anyone interested in the topic to check it out.
Meanwhile, this is the essence of the problem in my own words and understanding.
To put it simply, so long as the world continues to settle oil transactions with the US dollar… they are desirable … so investors and creditors are pleased to receive it in exchange for their commodities… so that they have the currency needed to settle their oil accounts. The US once was in a position to dictate that it be the currency of choice - because we were one of the largest exporters of real goods (not our current “service” economy) and up until the 70′s was a large producer of oil ourselves. That changed as the US production peaked and our own demand kept growing. The gap was filled by every increasing purchases from international markets. At the same time, the US lost global market for manufactured goods, and became instead… a major purchaser of goods from others - selling our “expertise and technology” instead. That alone was not enough … but we were able to keep our position of being the currency of choice for trade settlement - as our trade partners liked having such a good little consumerist nation as a customer.
Since the US dollar has for some time now required itself to have a gold reserve to back up the currency… the US government was free to just issue debt to pay for our increasing trade deficit (kind of like using credit cards to buy groceries and then leaving the balance on the card to accrue interest) and then print money when needed to settle the accounts as they may be called out for payment.
This has been going on for several decades now… with the trade deficit growing larger and larger - ballooning up to it’s record high level today. The gap has widened considerably on our dependency on foreign oil too… as the demand has continued to skyrocket (oh yes we love our SUV’s and TRUCKS!) and the US production of oil has continued it’s sharp slide downward. And this all worked really well for the US - allowing to have a wealth on an individual basis that was the envy of many others. However, it only works if the rest of the trading partners 1) agree to use your currency as the denomination of choice for trade settlement 2) see you as their best customer and want to do business with you - such that they are willing to continue to extend favorable credit terms, and 3) everyone else they do business with also still sees “value” in your currency.
But… let’s say a new “good consumer” of some size is now in the market. They have cash or gold and also produce goods or have cheap labor to sell elsewhere or trade with and they would be glad to take all the oil inventory and/or annual production off of their hands because they having a growing economy to feed… suddenly the old trading partner who has gotten very “bullying” and has run up large debts - doesn’t look so attractive anymore. So the oil trader strikes an agreement with the other party and they jointly decide to settle the accounts - using a new currency (Euros perhaps?!).
There stands the US … with an insatiable oil appetite to feed an economy (and quite literally to actually feed the population) with only dollars to pay for it and is no longer the settlement currency. Now the US needs some EUROS to settle deals. Well darn… you can’t just print those dang things out…. now you have to actually trade something of VALUE to someone else to get the currency you need to settle your accounts. Since the US has long ago become a huge IMPORTER of almost all goods and many services… that will be a very tall order to accomplish. Likely will have to resort to taking what it wants - by force.
Sadly, the usual response to such a crisis is to try and force everything to stay the same - by using military power to maintain the status quo. Our recent oil related and unilaterally aggressive invasions and military actions - are all good indicators of this being our current desperate attempt to maintain the US Dollar as the world’s reserve currency. It’s not working so well. We have gotten weak during these years, and no longer have a strong economic base to work from. The world has other “large” players they can do business. Iran will be shortly opening their own trading institution for settling world oil transactions - and it appears that they will be using the EURO for settlement. The fact that this will destabilize the US economy just makes that business decision for them … all the more sweeter. We have not made any real friends in the middle east (with the exception of Israel). Russia, China, and India are all delighted to take a larger order of oil from those willing to sell… and they have been getting out of dollars for a while now… with China slowly working to extricate itself from it’s US holdings and now starting to seek oil contracts quite overtly.
Just my observations of the situation and a recap of what I have gathered up in looking into this subject.
That should have said “NOT” required ourselves to back the dollar with gold. Dang fingers don’t work right sometimes.
DoubleD, that’s pretty much the situation as I understand it, too. Well explained!
DoubleD
Also, the new Iranian Oil Bourse is set to open next week. Do you know the exact date?
No I do not ricewiki - but I had heard next week as well. Any major trading hub is a major thing to get up and running successfully… so I wouldn’t be suprised if that get’s pushed out a wee bit. All the same, it is shaping up to happen. Just a matter of when and what the geopolitical responses are to such an event.
Melanie – at 23:16 - Trying to time the market is a risky business. We are in agreement that the market is due for correction (my post at 21:55). If I had bailed out of equities a year ago as you would have suggested, I would have missed one of the best run-ups I’ve experienced (about 30%), and would have to add years to my retirement date. By reducing equity exposure incrementally (by a third today) I hope to preserve some of my gains without totally eliminating opportunity for future gains. It’s all about how much risk one is willing to take.
My greatest risk, of course, is that I miss one of my planned ‘triggers’ to get completely out of equities. I watch for those financial triggers about as closely as I watch for my triggers to move to the country house and isolate for PanFlu.
Everyone
Here’s a helpful article on the “real” reasons for the so-called “threat from Iran.” Just mentioning this because it explains the relationship between US dollars and oil. And why it may be a good idea to move out of US dollars where you can. So, this is knowledge that can fit into prepping plans.
“There are many who believe the real reason behind the attempt to stop Iran’s nuclear ambitions is Iran’s ultimate nuclear weapon the Iranian Oil Bourse […] The reason that this is so dangerous to the US is that it is a clear threat to US$ global hegemony […] Anyone willing to buy oil will now be able to transact it in either US$ or in Euros. And many may chose the latter […] So the US is left with either sabotaging the exchange or hoping they can engineer a coup d’etat as they did in 1953 when the CIA and British MI5 overthrew Mohammed Mossadegh to install the Shah […] Either way gold is a winner. Indeed we suspect that gold is not rising because of Iran but instead at the demise of the US$ as the world’s reserve currency.”
If you’re interested in “a different point of view” here’s an Iranian news blog/journal, in english:
And here’s their report on the new Iranian Oil Bourse.
Now this makes sense….China & India bailing on USD……aren’t we married with billions of chicks(oops.. I mean children). Shouldn’t we be seeking a divorce attorney……H-E-L-L-O !
Unfortunately, the U.S. needs the Chinese alimony payments in a really bad way!;) (to the tune of 850 billion a day)
actually, that metaphor doesn’t quite match… I’m not sure why… it’s too late for me to figure that out
lets see… on thread, money=preps, preps=money, extra preps=extra money. after the pandemic oil will be in less demand (for a while) and for some reason I suspect we may see *new* currency issued by the united states, invalidating old devalued currency. end of iran oil bourse problem (if we haven’t taken care of them while the world was else wise occupied)
excuse me, idle thoughts I’m sure… although I lived through the new currency thing once
moeb - that is pretty much how I see it as well. My preps are a price hedge in the short term - and are likely to be the most worthwhile “currency” in the future.
There are 2 completely different economic situations being discussed here. One is the role of cash in a potential pandemic and the other is the current status of the dollar in the world markets today. For the pandemic, the United States will be a “safe haven” for assets from all over the world. The U.S. dollar, relative to all currencies in the world, will be a preferred currency because in a pandemic the United States will enforce its financial protection laws and the United States will be able to enforce social stability through force better than many countries. As to the world markets today, the dollar is under pressure because China is reallocating its reserves to include less dollars and Russia wants to exert its dominance in the oil markets by encouraging the world’s reserve currency to be euros.
http://tinyurl.com/z4dbs http://tinyurl.com/zbn2k http://tinyurl.com/kvdhp
I had the nightmarish idea while going to sleep last night that if this BF thing has been constructed in ANY WAY, it’s at a darn handy time for the U.S. economy — get their citizens to start prepping and bump up domestic consumerism, or at least keep it going, all the while the dollar goes down…
and yeah, during a pandemic would be a perfect time to start a new currency.
consumer spending makes up about 70% of US economy. Thus, it’s important to keep it going if the US doesn’t want to sink.
Yes, the consumer is the engine that drives the U.S. economy. The biggest factor is the employment situation. Since the U.S. consumer is more than willing to go into debt to spend, as long as the job market and wages are stable, the consumer will support the U.S. economy. This will be a problem during a potential pandemic. Consumer demand for many items will decrease due to income interruption. This is why I keep saying that the best investment (besides preps for health and safety) for the pandemic is to establish a solid income stream.
income stream? If the majority of us are out of work or out of business from lack of consumer/corporate spending, are you meaning income from cd’s, etc. not directly tied to retirement funds?
good point, cabingirl
I was wondering about what Florida means by income stream too… if you just mean a Job, I’m not sure I would agree
how weird does this sound? If the gov lets “qualified” (i.e. heath issues, lst time homebuyers, etc.) pull money from retirement funds, then surely it stands to reason, to jump start our consumer driven economy, that we too, would be allowed to pull from retirement funds without penalty. Quite frankly, at my age (and my husband has 8 yrs, on me) there is absolutely no way we could restart our company if this goes really bad, and may need to pull funds for basic necessities. I’m sure others will be in same boat. So much for my 10 yr. plan…. ; (
I mean any kind of income, from any source. It is critical to evaluate this now as many jobs will be negatively impacted by any pandemic.
Alot of you are talking about transferring funds so to have money to pay your bills through the internet. I am one who thinks that things will be so broken down….people will be out sick, or out for fear of getting sick..who will stock up the ATM machines…I did work a long time ago in at the bank…..if people go missing and electricity goes down, things get chaotic…it’s the domino affect!!…I don’t plan on paying my bills “until” things are safe…I do have the chiash, but I won’t be opening mail, nor transferring funds….things will be deffered as it happened in Hurricane Katrina. I doubt they’ll be coming for “us non-payers”…who will come?…everyone will be in survival mode …no one will show up for work….especially the young with small children. I’m not braking a sweat over paying anyone…and I’ve done “all” my prepping with credit card ….0% credit cards…when 0% stops, I just transfer…when TSHTF, I won’t be paying “unitl further notice”…..that way, my personal money will be untouched and I will have all my preps. Trust me on this, they will not be coming to take you or your house.
Forum.WouldAPandemicCrashTheDollar
(did we lose a Global Economist Speaks thread in the move?)
I already have all of my bills set up on auto debit. If the creditor can’t process the transaction because of personnel issues on their end, I’m not liable.
If I had the money right now to make the choice, I agree with Eccles — the first thing I’d want to secure investment-wise would be my house - free and clear!
If the U.S. currency starts hyperinflating before the pandemic, then it won’t be a good idea to keep only cash on hand — it won’t be worth as much as when you earned it.
In addition to cash, I am starting to see that it IS a better idea to have barter items. Things like TP, tampons, rice, alcohol, razors etc.
wonder is there a rule somewhere that states if you lose your home to foreclosure (in this case during/after pandemic) that you cannot buy it back (maybe pennies on the dollar) as previous owner (or find something even better). Thinking out of the box kinda stuff, but maybe those with the cash/gold, whatever… will be better off. more options even if they just continue to pay mortgage during pandemic and see how this plays out. What if…..all those people with loans up to 125% home value ( or interest only), have been stashing money into “right” investments (with quick liquidation) come out even better.
i’m paying my usual bills with 10% tacked on at a time. I hope to be in credit on everything quite significantly by the time TSHTF. You’d be amazed how easy it is to do this and if you do it automatically u really dont notice. Especially as my whole financial plan now really doesnt include the stupid things i used to buy. Most everything is geared at planning for either BF or some other disaster including unemployment. I’m getting there…but geez its slow going.
cabingirl, did you make it to the Barnes and Noble yet or find any good books on finances?
Melanie - 22:42 yesterday - How do you set up auto debt? where?
seacoast
I think you can just ask your bank, do it on their website… it’s also called pre-authorized payment plans, etc. You give your bank the account number, amount etc. and they organize it/
I don’t do this myself, but am sure your bank could let you know. I think it’s pretty common.
seacoast – at 13:42 --- auto debt, or auto debit? ;-)
I have LOTS and LOTS of auto DEBT! And I’m only too happy to give it to anyone who wants it?
Seriously, if you’re trying to set up auto debit, you would normally contact the lendor you’re currently paying. You’d tell them that you want them to automatically debit your checking/savings account for the amount owed each month. You’ll give them your account and routing number for your bank account, and then, magically, each month that money disappears from your account.
I currently do this with both mortgages, utility bill and cell phone bills. Makes life a lot easier, but I do have to remember to balance my checking account every month without fail.
woodstock- interesting idea (at least for utilities, phone, life/health ins. premiums). However, I don’t think you can “advance credit” on installment loans (car, mortgage) can you? thought they require a monthly payment and just apply any overage either to principle or interest.
ricewiki-no, but will in a couple of days. still having wisdom teeth removal issues—PEOPLE, get them out while you are young!!! But, I did get a call this morning from advisor to schedule an appointment for Wed., and I went behind his back and found what all my MER’s were for all accounts .55-.60. These are diversified mutual funds (although we are not talking huge amounts of money here by todays standards), and apparently he cannot help move into anything not a mutual fund. Obviously, I’ll need help by a professional to get them out, but dread the fees that will probably go along with it. I’m selling a little extra real estate, hopefully at a great price (not my cabin) and with those funds may payoff one of my mortgages or hang on to cash, or maybe , invest some into gold, just in case. I now find myself in a “pandemic quandry “, own some real estate but hate to sell because (3) are excellent income producers, and was building/counting on these for our retirement. Which unfortunately, leaves us kinda cash poor (reinvesting profits to pay off mortgages quickly.) in the scheme of things to come. damn. I guess all of us will have to make some hard choices about the future in the next few months, as I’m getting the impression this virus has an unlimited ticket around the globe. ; (
cabingirl,
please do more reading before you make any big selloffs!
Especially re: real estate…
RE: mutual fund fees, those are good MER’s — but check to see if you have other fees included in those funds — front or back end fees, for example. Are those no-load funds? If not, it means there are even more fees involved than the stated MERs. It’s awful!
cabingirl
remember also that real estate can be your #1 investment. Nothing beats owning a shelter free and clear. Nothing! So think twice before selling real estate…. I’m not saying it would be a bad decision for you, I would just hate to see you regret it or some real estate agent screw you over because it seemed like you didn’t know what you really wanted etc. etc.
(again, I’m no RE expert and don’t even have my own mortgage yet — just done lots of reading and planning about it; auto-didact)
ahhh, thanks for your concern.
Only thing I’m considering selling right now one of the cabins (it would allow me to be free of 2 mortgages). Prices are through the roof currently, and profits would allow to pay off either my home, my cabin, my studio or cash for possible investment (either before or after should a pandemic occur). Since we built this small cabin as investment (abeit a longer term investment-vacation rental) and did much of the labor ourselves, profits could be quite substantial. I’m meeting realtor Fri. to confirm my CMA, and I guess that will be determining factor to sell vs. rent. I’ve no doubt vacation rentals will be curtailed not only during a pandemic, but also before by those trying to save for prepping/survival. BTW: not too worried about being screwed by realtor, I used to be one of “those” myself and still hold my in-active broker’s license. Plus own several other lots with some acreage. I just don’t get the investment thing in stocks, funds, etc. (mostly because it was easier to just write the check and let it sit with someone else managing it-since my interest didn’t lie in that area-regretting it now).
Re: other fees: all my funds were back-end loads (6 yrs) which I’ve passed (when I started investing in real estate), so I’m told no fees now.
But, I really appreciate all the good advise, and look forward to some reading. As my dad always says “Self education is a wonderful thing, if you have the right tools”.
Of course, as my husband suggests we could always offer for rent (3 months) “fully stocked” w/spring fed water (end of road privacy-5.5 acres). For “GOLD” upfront! Let the bartering begin! LOL! ; )
Gold just took like a 10% jump up… things are heating up. Time to research dollar flows.
ricewiki - I have now been to two big book stores, and nothing for “dummies, Idiots” in regards to metals, couple (dummy) mostly mutual funds, real estate, day traders….I live in a BIG banking area, so very surprised. Maybe sold out???? I’ll keep looking!
cabingirl
keep trying - maybe other stores. Or, why not just look online at barnes and noble — probably easier. Search “gold” or “precious metals” and see what comes up.
anyone else have recommendations on good beginning books on these topics?
you might want to get a book that gives an overview of “commodities” — there will probably be a good chapter or two on gold, silver, etc. Could be a good start.
Also check out
yeah, I started to check out web or order, I was just impatient because rain coming in for two days while I’m alone at cabin. Great reading opportunity! Thanks again for all the tips.
cabingirl check out sharelynx.com and gold-eagle.com
Everyone, please read this April 26 essay by Hon.Ron Paul of Texas: What the Price of Gold Is Telling Us
Good information for future financial planning, esp. in light of a possible pandemic in next 5 years.
Old thread - Closed to increase Forum speed.