Bank Run - What would you do?

[Copper Catcher]

If you know just a little about the banking system then you know that the bank where you have your money does not have on hand enough money to cover all the deposits they have on the books at any given time.

If you read the article below: What An American Bank Run Would Look Like
http://www.zerohedge.com/article/what-a ... would-look

You will find the following statement...there are anywhere between $967.3 billion and $2.6 trillion in physical claim satisfying pieces of paper which everyone would scramble to grab if the sky was falling, and against these there are just under $30 trillion in paper claims on said hard paper.....

Do readers see now why it is irrelevant to add X trillions or even quadrillions in derivatives? Because when just taking the plain vanilla electronic claims on circulating dollars there would have to be between a 11x and 31x haircut when everyone rushes to procure the suddenly all too precious pieces of paper with the picture of a dead president on the face.

A sobering thing to consider....Yet, still the question remains for you to think about. Is there anything you can do now to protect yourself from this event if it happens? What say you?

With the latest JP Morgan $2 billion loss we will likely hear more and more about the derivatives market....

One of the biggest risks to the world's financial health is the $1.2 quadrillion derivatives market. Its complex, it's unregulated, and it ought to be of concern to world leaders that its notional value is 20 times the size of the world economy. Read more at:
http://www.dailyfinance.com/2010/06/09/ ... arket-gdp/

[Copper Catcher]

I’m also curious to see what people think is the correct amount of cash anyone should carry or have available in case of emergencies?

How many people do you know, or maybe even yourself, that basically carry no cash at all and only rely on a credit card?

I realize for some people having cash in their pocket is a temptation to spend. For others, living paycheck to paycheck there is literally nothing left to carry!

My point to the question is if there is a crisis, what happens to these individuals if the credit card companies for fear of people defaulting just deny ALL charges, regardless of your credit history!

[moparal7]

Maybe Bill Gates or Warren Buffet could be so benevolent as to help out.

[IdahoCopper]

I’m also curious to see what people think is the correct amount of cash anyone should carry or have available in case of emergencies?

I think having enough cash on hand for about a month's worth of day to day expenses would be enough for most people on this forum. After a month, the mad scramble would be over, and people would be adapting to other kinds of money, like PMs.

Expenses would be fuel, food, fun and utilities. You can probably add others.

[Bluegill]

I’m also curious to see what people think is the correct amount of cash anyone should carry or have available in case of emergencies?

Speaking for myself, I keep a lot more money out of the bank than in the bank. I'm a cash and carry person.

How many people do you know, or maybe even yourself, that basically carry no cash at all and only rely on a credit card?

An actual credit card, or a debit card? Most people I know use both, with a lot of them using the C.C for rebate points. Those who use debit cards do so because carrying a few FRN's and a few coins in their pocket is such a back breaking inconvenience. But carrying around a wallet stuffed with credit and debit cards isn't? Or carrying around a smart phone using Google wallet or similar applications isn't? Or key fobs the size of credit cards isn't?

My point to the question is if there is a crisis, what happens to these individuals if the credit card companies for fear of people defaulting just deny ALL charges, regardless of your credit history!

If there is a shortage of physical FRN's from bank runs, I would think people will use their debit cards to buy thing with the money they have that is in digital form. Depleting their accounts, getting their money in the form of hard goods in lieu of "cash". I would...

I have no idea what scenario would play out with credit cards. I would imagine it would depend on how the banks think the problem will play out. If they think they will get bailed out no matter what, and the problem will eventually blow over, they will probably be more than willing to continue extending credit to continue collecting usury. I dunno...

[reddirtcoins]

I’m also curious to see what people think is the correct amount of cash anyone should carry or have available in case of emergencies?

I think having enough cash on hand for about a month's worth of day to day expenses would be enough for most people on this forum. After a month, the mad scramble would be over, and people would be adapting to other kinds of money, like PMs.

Expenses would be fuel, food, fun and utilities. You can probably add others.

Agree... A month is a good start and hopefully everyone has six months to a year of food per person in the house. I know I do.

[hobo finds]

I would have to use change to pay for stuff

[hobo finds]

http://www.youtube.com/watch?v=qu2uJWSZ ... re=related

[DTEJD1997]

In the event of SERIOUS trouble debit cards are going to be just like credit cards, useless.

You are requiring the computer network to be up. You are requiring the Visa, MC clearing house to be up, you are requiring communication lines to be up, you are requiring your financial institution to be "open for business". You are requiring the merchant's terminal to be operational. You are requiring the merchant to be able to even take "plastic". Too many variables in a "difficult" situation.

You would be a fool to leave the house without cash.

I think the prudent amount is enough for small incidentals, a meal, and enough to get you back home. Of course it depends on where you are at, but I would think $80 at minimum. I rarely leave the house without $300 or $400 cash. Frequently I will carry more.

At home I think you would need about 1 months expenses. A couple grand would probably be sufficient. I also would have a few hundred in small bills, $10's & $5's would be desired...

[Rosco]

I'm Concerned
Still building all Preps an not enough of any
I guess build more food an then be prepared to convert FRN to Commodities when the EU starts to go in a crash program just grab pay an go.

Need to also agree where the two Sons an I fort up

Up the amt of cash I carry bye Double It will be hard to pass LCS I tend that way now

I was Quoted $1.50 over for generic .999 but they are out did have Frac AU

[frugi]

LOL!! at the pictures shown everywhere of the lines at the ATM's in Greece.......The lines at my local bank are longer any given day of the week........nearly fell out of my chair today when I went to www.marketwatch.com and saw the headline picture, of a single person at an ATM. LOL! seriously?

[SilverEye]

There will be no run on the bank like in It's a Wonderful Life. Not these days. There is already in place a reloadable debit card network that could instantly absorb the demand of everybody who doesn't already have one tied to a bank account. The Fed would swoop in and say "Well you may not be able to get greenbacks, but just use your card. We guarantee it will work, and you won't lose your heard earned money." It's all digital. Ones and zeroes are infinitely available with no additional marginal cost or lag time of creation, unlike physical cash.

[Mossy]

...Ones and zeroes are infinitely available with no additional marginal cost or lag time of creation, unlike physical cash.

Shortly after that, the IRS would be able to tap straight into our bank accounts, and shortly after that physical would be outlawed. It would not work, but there'd be massive chaos and confusion for a few years.

Knock the economy on it's butt, too.

[Ardent Listener]

I think a bank run would be controlled by limiting withdrawals. Already, chances are that if you have an interest bearing account you have agreed in writing to wait for your money if required. Plastic would be limited to paying bills such as utilities, medical, and hopefully food. But those to could be capped off.

[Copper Catcher]

If anyone has any other suggestions or solutions....please post your comments!

[frugi]

suggestions or solutions?
Nobody did it better than Jesus.
He grabbed a bullwhip and the beat the crap out of some bankers.
If he was around today that is what he would be doing.

[Tourney64]

Did you know the amount FDIC is insuring at banks and credit unions will drop on 1/1/2013.

[Treetop]

Id go hang out in lines at various banks and talk really loud to people next to me, how I "heard" walmart would get no more food or ammo shipments for the foreseeable future...

honestly I expect something like this eventually, and am prepared...

[Copper Catcher]

Did you know the amount FDIC is insuring at banks and credit unions will drop on 1/1/2013.

I have been looking online and confirmed the expiration date of 12-30-12. I can't imagine no one else talking about this and saying there will be an extention, unless it is part of some other plan? I guess we will have to wait and see.....

[BamaJoe]

Ok folks, in the event of a MAJOR problem you can forget about using plastic and you will only have limited access to cash at the banks. The plans and procedures have already been drawn up and are ready to go into place in the event it is necessary - and have been since at least 2008. You can take it or leave it, but I've actually seen some of them. In 2008 banks got scared enough to actually distribute some of the plans down to the branch level.

I don't remember the exact wording or phrases, but here's the general idea.

Step 1. Increased concern by public over access of funds.
Response: Here they had a written out statement for the bank employees to tell customers explaining that of course their funds are safe, they are insured, the federal government is standing behind the banks, etc.

Step 2. Mild bank run.
Response: Cash withdrawal either by plastic or in the branch limited (it did not saw what the limit was). Normal check written by business customers not affected. Consumer checks written such as bill payment not affected.

Step 2. Serious bank run.
Response: Cash withdrawal either by plastic or in the branch are limited further. Business will be informed of check writing/cashing limitations. Consumer checks written will only be honored when deposited to an account and no cash is involved.

Step 3. Major bank run.
Response: No further electronic withdraw. Very limited daily cash withdraws allowed in branch. All checks written must be for deposit and no cash involved.

Step 4. Crisis
Response: Banks close until further notice.

As I said I am paraphrasing what I remember from 4 years ago, but the general idea is there. You also should keep in mind that the average branch really doesn't have that much cash on hand. A midsize branch usually only has in the area of $60,000 to $80,000 cash on hand including coins.

[Bluegill]

Ok folks, in the event of a MAJOR problem you can forget about using plastic and you will only have limited access to cash at the banks. The plans and procedures have already been drawn up and are ready to go into place in the event it is necessary - and have been since at least 2008. You can take it or leave it, but I've actually seen some of them. In 2008 banks got scared enough to actually distribute some of the plans down to the branch level.

I don't remember the exact wording or phrases, but here's the general idea.

Step 1. Increased concern by public over access of funds.
Response: Here they had a written out statement for the bank employees to tell customers explaining that of course their funds are safe, they are insured, the federal government is standing behind the banks, etc.

Step 2. Mild bank run.
Response: Cash withdrawal either by plastic or in the branch limited (it did not saw what the limit was). Normal check written by business customers not affected. Consumer checks written such as bill payment not affected.

Step 2. Serious bank run.
Response: Cash withdrawal either by plastic or in the branch are limited further. Business will be informed of check writing/cashing limitations. Consumer checks written will only be honored when deposited to an account and no cash is involved.

Step 3. Major bank run.
Response: No further electronic withdraw. Very limited daily cash withdraws allowed in branch. All checks written must be for deposit and no cash involved.

Step 4. Crisis
Response: Banks close until further notice.

As I said I am paraphrasing what I remember from 4 years ago, but the general idea is there. You also should keep in mind that the average branch really doesn't have that much cash on hand. A midsize branch usually only has in the area of $60,000 to $80,000 cash on hand including coins.

I think everything is going to depend on what the PTB wants to happen. The above stages would play into their desire to implement Martial Law. If the PTB should desire that to happen in the next year or so, than yes, they would do things that would cause chaos and upheaval that gives them the excuse.

If Martial Law is not in their plan until a later time. then I believe a different scenario will play out.

Lines at banks would form, a run may even ensue. All government has to do is create money, electronic money. It can be transferred to what ever institution needs it in nano seconds. Most Americans don't use cash, as long as money is available to them in the medium they use, they will be at ease. For those who aren't thoroughly convinced, along with those that use cash, they will still be in line.

The government will just announce everybody will get all their money, it will just take a few days. The Fed will just start printing FRN's. They could even turn it into propaganda. News outlets doing live feeds at the entrance of the banks as armored trucks show up, neatly dressed guards step out and deliver bags of money for the banks to eventually be payed out to those making withdrawals. All on public TV. This will convince most Americans the government has everything under control and that their money will be there and all is good. Peoples fears will subside and the runs will conclude.

Of course we are ALL speculating, none of us really know how a genuine bank run would play out. None of us really know how we would personally react until we know what the conditions, situations and rules turn out to be at that moment.

[EddieMerchant]

It seems to me the banks are already restricting the amount of cash you can withdraw. Our experience has been that any amount over 5K requires us to "order" the money in advance, and sometimes even lesser amounts are a problem for our local bank.

[John_doe]

they are a stack of dominoes. one small breeze could send them off. scary to think about, but at least I am a (little) prepared.

[TXSTARFIRE]

Interesting old thread that has some relevance today. What ever happened to bluegill? I remember him but when I click on his name the site says "The requested user does not exist". Is it possible to delete yourself from this site?

[Recyclersteve]

Thx for digging and finding this old thread.