Preparing for Bank Runs
Are bank runs in our future? While much of the news is being conveniently swept under the proverbial rug, the fact is that many national and international banks are facing problems. As the money supply tightens, and banks see their credit ratings drop, you can be sure trouble is brewing.
As James Wesley Rawles at Survival Blog notes,
A key indicator is the level of bank reserves. Many US banks are now technically insolvent. These banks are on life support, courtesy of your tax dollars. Since February of 2008, I’ve been warning you about the “Non-Borrowed Reserves” figure at the Federal Reserve web site. Bank reserves are plummeting deep into negative numbers. When you look at the U banking industry in aggregate numbers, there are effectively no genuine reserves left. If the average bank depositor was aware of this, then there would already be huge bank runs in progress. But the Generally Dumb Public (GDP), is still blissfully ignorant, and continues to be lulled into a sense of complacency by the long-standing universal depositor’s insurance backed by “the “full faith and credit” of the US government.
Tips to Help Prepare for Bank Runs:
- Keep cash on hand. Do it safely, inconspicuously, and gradually, but having a reserve of cash and small-denomination silver coins on hand is important.
- Get ahead on your bills. Pay your mortgage early, and try to get to the point where you’re paying several months out. So if it’s June 1, you pay July or even August’s payment, having paid June’s and even July’s payment back in April or May. This puts you ahead of the game if you are unable to access your accounts.
- Use a credit union or local bank. Rather than banking with a national institution or large regional bank, choose one that is truly local, r better yet, opt to bank with a credit union which often has higher lending standards and thus is usually more solvent.
- Keep your food and medicine shelves well stocked so that in a time of crisis, you do not need to run out and spend money but can weather a short-term problem with reserves already on hand.
If bank runs or bank holidays do materialize, your vigilence and preparation will pay off. Make small — and big — sacrifices now to put your family in the best possible position for these future contingencies.
Are you preparing your family for financial pitfalls? How so?
My family has made allot of these provisions already. We live about two hours from the Canadian border and we have also stored some of their currency as well. We bought gold when it was still $300.00 an ounce and have some of that stored with the extra cash. With our tax return, we are going to expand our vegetable garden and buy canning materials/dehydrator…although I have no idea how to do either, I will learn. Thanks for the tips!
February 25th, 2009 at 6:56 pmI agree with you 100%! I’ve been trying to warn my readers as well that things are about to get really hard. This is why we are so diligently seeking self sufficiency in our own lives. We are just starting up a food storage, with a goal of one year’s worth of food stored up. We’ve been buying non-electric equipment, like a wood cook stove, a hand wheat mill, etc, we have purchased some silver and gold, and are stocking up on things… just in case. After studying every other time in history when hyperinflation has set in, I’ve come to realize that we are doing exactly the same things that these other societies did just before their collapse. We are merely limping along due to the unaware public. Eventually, I’m afraid, we won’t be able to keep going. Thanks for reminding everyone the importance of preparing now!!
January 20th, 2010 at 2:08 pm