A Word for Now

Final preparations for The Book are underway [and for the next as well!] so in the meantime, something to ponder, for Turd Fergesun's website:

Cash on hand

Submitted by Smiddywesson on February 1, 2012 - 1:43pm.

A real crisis event of the magnitude to affect whether we should have cash or not will include a bank holiday. Some bank holidays will include zero access to your accounts, others will involve partial access with caps on how much you can withdraw each day. I would imagine caps on withdrawals are more likely, but that's a guess based on central banking having a long time to plan for this.

Other than having enough to buy groceries for a few weeks, and pay my rent, I don't keep a lot of cash on hand. I have plenty of metallic change, but no more paper money than is necessary. If I had any extra, I would buy silver with it. I think this may be a mistake.

Cash will eventually become worthless like your accounts, but so what? The bigger concern is in a doomsday financial meltdown, there will be no way to pay employees. How long do you suppose the local Walmart employees will show up in that case? With insufficient staffing, how many of these companies will refuse to open their doors? The last time around (1930s), there were mom and pop companies to extend credit to their neighbors (my grandfather lost his grocery store that way). Those small stores are gone, and the managers of the companies that replaced them don't have the authority to extend you credit to eat. This line of reasoning applies to shipping & distribution. Without letters of credit and loans, and without the employees to move the food, the shelves go bare in three days just like in the Japan earthquake. Sorry folks, due to Zero Inventory and Just-In-Time-Delivery, everything comes to a screeching halt without the banks.

In a dollar collapse, every little bit of cash that's not in your account can be quickly converted for something tangible. Many employees will show up to work as usual because they won't know initially they will never be paid. With the credit cards not working, only the people with cash will be able to buy anything, leaving you with the pick of a rapidly diminishing food supply and any gold/silver jewelry that hasn't been re-priced yet. When a bank holiday hits, everything priced in dollars will be under priced. Most people know nothing about these events, so the majority won't catch on for a few days.