How much cash do you have in your possession (not in banks or cds)?

Submitted by waitingpatiently on September 29, 2008 - 1:34pm
0-100
30% (20 votes)
101-500
23% (15 votes)
501-1000
9% (6 votes)
1000-3500
17% (11 votes)
3501-5000
0% (0 votes)
More than 5000
21% (14 votes)
Total votes: 66
Submitted by Enorah on September 29, 2008 - 2:38pm.

bump for voting

Submitted by XBoxBoy on September 29, 2008 - 3:17pm.

I keep hearing people talk about the need for cash, but I just don't see that as being important. While the big investment banks might have solvency problems and the government might balk at bailing out the super rich, the government will not let the deposits of Joe Six pack be taken away. If push comes to shove the government will print paper currency and deliver it by helicopters to the banks to hand out.

While I think that we might see some tough times ahead, I don't see any reason to think that debit cards will stop working (provided you have money in your account) or that suddenly stores will only take physical currency.

It seems to me that a much more rational fear is that the economy will slow, people will lose jobs and President Obama will declare a "New New Deal" which will contain lots of work programs, all paid for with freshly minted money. And that inflation will make that cash you had stashed away irrelevant.

XBoxBoy

Submitted by cr on September 29, 2008 - 3:53pm.

I agree.

I don't know if credit cards were around in the Depression, but there's no reason to think they would stop being accepted if a few more banks failed.

Submitted by Enorah on September 29, 2008 - 3:57pm.

You are supposing that all services will stay intact (power, phone, etc).

If the grid goes down (big if, I am not saying I think that will happen), your plastic cards will have no meaning.

Submitted by AN on September 29, 2008 - 4:20pm.

If the grid goes down, there will be no power, no lights, no fridge/freezer. A lot of the food will go bad anyways and the store will just give it away for free or people will just go steal it in the dark.

Submitted by Aecetia on September 29, 2008 - 7:59pm.

And in this county, no water. We will not freeze to death, but you have to have water.

Submitted by urbanrealtor on September 29, 2008 - 9:12pm.

Xboxboy raises a good point.
However, that begs the question for me of how badly did the original New Deal damage the economy?

Can someone in the know draw this out?
Several people have mentioned that this will be a new New Deal and that it will be damaging.

Can someone bring evidence?

Submitted by Eugene on September 29, 2008 - 10:14pm.

urbanrealtor wrote:
Xboxboy raises a good point.
However, that begs the question for me of how badly did the original New Deal damage the economy?

Can someone in the know draw this out?

The original New Deal pulled the economy out of the Great Depression, gave birth to the American middle class, and fueled the longest period of growth in the U.S. history.

I recommend this book, it's a good treatise on the Great Depression, the New Deal, and history of politics in the U.S., by a well-known respected economist, professor of economics at Princeton, and a former colleague of Ben Bernanke:

http://www.amazon.com/Conscience-Liberal...

Submitted by poorgradstudent on September 29, 2008 - 11:15pm.

If you're truly panicked about credit cards suddenly not working, a fiat currency problably isn't much better. Gold or jewels is probably the way to go, along with non-perishable staples for bartering.

Submitted by partypup on September 30, 2008 - 2:25am.

I've mentioned this before, and I'm going to recommend the same advice: keep PLENTY of cash on hand. 10K would be ideal, but really, grab as much as you can. Money is simply not safe in any bank at this time. All of them -- even the so-called safe havens such as Wells Fargo and B of A that kept a decent distance from the sub prime debacle -- are woefully under-capitalized because of an extreme abuse of fractional reserve banking. They leverage $9 for every $1 that comes in. If everyone showed up at their bank on any given day and demanded all of their deposits, EVERY single bank would fail. It is nothing less than a confidence game. But that day is coming, because the confidence is wearing thin. People are getting so freaked now that they will start pulling their money shortly.

Don't be the last one to make it to the bank.

Keep plenty of food, staples and other items that you need to run your household for 3 mos. When the credit disappears -- and it will -- inventory will be wiped off of shelves in no time. There is generally a 2 day inventory of supplies in all stores today.

Invest in liquor, cigarettes and other non-perishable items that hold intrinsic value and will be easy to barter with.

Hold as much gold and silver as you can afford. Cash will be good only so long as the dollar holds value. As we all know, that value is quickly slipping away. As William Buckler (publisher of "The Privateer") noted recently: "The question isn't, "Is my money safe?" The question is, "Is my money viable?"

Invest in a generator and plenty of fresh water (preferably a high-quality filtration system). Enorah and Asianautica are right: infrastructure and services will likely break down. Rolling power outages will ripple throughout the country. Without power, food becomes a luxury.

No one is talking about this yet, but I can't see insurance companies continuing to exist in their current form. Benefits will be tremendously reduced. Get your teeth cleaned now, take care of any major procedures or operations. Stay healthy, stay fit, get strong to go long. This is going to be a once-in-several-generations test for all of us. Only the strong will survive. Others have lived through these times before. Unfortunately, as Americans, most of us are flaccid and ill-equipped to rise to the challenge.

Folks, the entire system is nearing collapse. Let's not dance around this issue any longer.

I have long predicted that the first week of October would see a watershed event that would tip us over the edge. I feel the walls literally closing in around us as we near that time period.

Bailout or no bailout, the end game is the same: this ship is going down.

If I'm wrong, then just consider it good earthquake prep.

But I very much doubt I'm wrong.

Submitted by FormerSanDiegan on September 30, 2008 - 8:16am.

partypup wrote:
I've mentioned this before, and I'm going to recommend the same advice: keep PLENTY of cash on hand. 10K would be ideal, but really, grab as much as you can. Money is simply not safe in any bank at this time. All of them -- even the so-called safe havens such as Wells Fargo and B of A that kept a decent distance from the sub prime debacle -- are woefully under-capitalized because of an extreme abuse of fractional reserve banking. They leverage $9 for every $1 that comes in. If everyone showed up at their bank on any given day and demanded all of their deposits, EVERY single bank would fail. It is nothing less than a confidence game. But that day is coming, because the confidence is wearing thin. People are getting so freaked now that they will start pulling their money shortly.

Don't be the last one to make it to the bank.

Keep plenty of food, staples and other items that you need to run your household for 3 mos. When the credit disappears -- and it will -- inventory will be wiped off of shelves in no time. There is generally a 2 day inventory of supplies in all stores today.

Invest in liquor, cigarettes and other non-perishable items that hold intrinsic value and will be easy to barter with.

Hold as much gold and silver as you can afford. Cash will be good only so long as the dollar holds value. As we all know, that value is quickly slipping away. As William Buckler (publisher of "The Privateer") noted recently: "The question isn't, "Is my money safe?" The question is, "Is my money viable?"

Invest in a generator and plenty of fresh water (preferably a high-quality filtration system). Enorah and Asianautica are right: infrastructure and services will likely break down. Rolling power outages will ripple throughout the country. Without power, food becomes a luxury.

No one is talking about this yet, but I can't see insurance companies continuing to exist in their current form. Benefits will be tremendously reduced. Get your teeth cleaned now, take care of any major procedures or operations. Stay healthy, stay fit, get strong to go long. This is going to be a once-in-several-generations test for all of us. Only the strong will survive. Others have lived through these times before. Unfortunately, as Americans, most of us are flaccid and ill-equipped to rise to the challenge.

Folks, the entire system is nearing collapse. Let's not dance around this issue any longer.

I have long predicted that the first week of October would see a watershed event that would tip us over the edge. I feel the walls literally closing in around us as we near that time period.

Bailout or no bailout, the end game is the same: this ship is going down.

If I'm wrong, then just consider it good earthquake prep.

But I very much doubt I'm wrong.

Why so optimistic ? You didn't even mention holing out in a remote well-equipped underground lair in the desert so that you could protect your stash of goods. No mention of proper weaponry either.

Submitted by Casca on September 30, 2008 - 8:56am.

Pup, I'd go with solar panels over generators. Generators require fuel. I'd also add "learn to fish". See you at the Crossroads of the West Gunshow this weekend.

Submitted by FormerSanDiegan on September 30, 2008 - 9:00am.

Good point. Solar panels with battery storage so that you can run your fridge at night.
But if your house is the only one on the block with electricity, what do you think will happen ?

Submitted by Blogstar on September 30, 2008 - 9:19am.

http://www.youtube.com/watch?v=gpU6LxM_hLk

Yes, generators can be problematic in tough times.

Submitted by XBoxBoy on September 30, 2008 - 9:26am.

esmith wrote:

The original New Deal pulled the economy out of the Great Depression, gave birth to the American middle class, and fueled the longest period of growth in the U.S. history.

Maybe, but a lot of people think that the depression didn't end until WWII kicked in and the patriotism drove the American worker to new heights of productivity. Not to mention so many women entering the work force.

esmith wrote:

I recommend this book, it's a good treatise on the Great Depression, the New Deal, and history of politics in the U.S., by a well-known respected economist, professor of economics at Princeton, and a former colleague of Ben Bernanke:

Well, personally I can't say that I think much of Krugman. (Although amazingly he spoke out against the bailout, at least at first) He is extremely partisan, a pro-democrat, anti-republican shill, and somehow I don't think being associated with Ben Bernanke is a positive these days given how the world's authority on depressions was so quick to spot the current crisis long before it erupted.

Which leads me to an extremely important take away from this "financial crisis" that we are having. That is, the experts are often amazingly wrong. In this case, the experts were adamant that things were fine, then the experts were adamant that things were contained, and now the experts are adamant that the world is ending.

My parents, being the liberals they were, taught me to always question things. (which I think they might have regretted a bit once I got to be a teenager and questioned them, but that's another story) And man am I glad I had the sense to question the experts over the last couple of years. If I hadn't, I'm sure I'd be a lot poorer, and probably heavily in debt to an upside down house.

XBoxBoy

Submitted by Eugene on September 30, 2008 - 12:17pm.

Maybe, but a lot of people think that the depression didn't end until WWII kicked in and the patriotism drove the American worker to new heights of productivity.

GDP and employment got back to pre-Depression levels by 1937.

He is extremely partisan, a pro-democrat, anti-republican shill, and somehow I don't think being associated with Ben Bernanke is a positive these days given how the world's authority on depressions was so quick to spot the current crisis long before it erupted.

He's not exactly a pro-democrat, I'd rather say that he's pro-J6P. He has strong beliefs that everyone should have an equal chance in life. Many of his positions are logical, not dogmatic.

It's hard to say what Bernanke really thinks about the current crisis, or when he was able to spot it. Being the Chairman of the Fed, he's not in the position to always say what he thinks. Krugman wrote about the housing bubble as early as August 2005.

Submitted by XBoxBoy on September 30, 2008 - 12:48pm.

esmith wrote:
GDP and employment got back to pre-Depression levels by 1937.

But was the new deal the reason for this? I know from your previous posts that you're smart enough to know that correlation does not necessarily imply causation.

Also, simply getting back to pre-Depression levels doesn't address the second and third claims you made:

esmith wrote:
gave birth to the American middle class, and fueled the longest period of growth in the U.S. history.

I don't want to turn this into an argument, I just want to point out that many well respected economists argue that the new deal did not make things better or recovery faster, and that the long period of economic strength that followed WWII was cause by WWII not by the New Deal. (Of course just because well respected economist say it's so doesn't make it true either!)

My real point is that the blanket statement you made is highly debated by many economists and historians.

esmith wrote:
[Krugman]'s not exactly a pro-democrat, I'd rather say that he's pro-J6P. He has strong beliefs that everyone should have an equal chance in life. Many of his positions are logical, not dogmatic.

Well, you're certainly entitled to your opinion. But as someone who's read him since prior to his becoming a NYTimes columnist (when he wrote articles for his website that were much less political and much more economics) I just can't agree. Mind you I'm not a right wing conservative trying to point fingers. I just find that most of his columns, particularly those for the NYTimes are highly pro-Democrat and very anti-Bush/Republican. Not always, but more often than not. In general I think of this as really unfortunate, as I used to really enjoy his more purely economic columns.

Just my opinion though.

XBoxBoy

Submitted by Eugene on September 30, 2008 - 4:24pm.

Quote:
I just find that most of his columns, particularly those for the NYTimes are highly pro-Democrat and very anti-Bush/Republican.

http://powerlineblog.com/archives/011291...

"It must be depressing to be Paul Krugman. No matter how well the economy performs, Krugman's bitter vendetta against the Bush administration requires him to hunt for the black lining in a sky full of silvery clouds. With the economy now booming, what can Krugman possibly have to complain about? In today's column, titled That Hissing Sound, Krugman says there is a housing bubble, and it's about to burst"

August 08, 2005

Submitted by kewp on September 30, 2008 - 4:42pm.

As long as I have a gun and Mormon neighbors I got nothin' to worry about!

Submitted by urbanrealtor on September 30, 2008 - 7:14pm.

kewp wrote:
As long as I have a gun and Mormon neighbors I got nothin' to worry about!

lol

So explain the mormon part?

Like lots of kids to use as food or what exactly???

Whatever it is, I am printing this for my quote box.

Submitted by JWM in SD on September 30, 2008 - 8:43pm.

$10K USD approx. $10K Kruggerands.

Submitted by partypup on October 1, 2008 - 12:00am.

Great idea. I was just thinking that a generator (esp diesel, that runs many hours on relatively fuel) would get you through the rough patches when the s*** first hits the fan. Long term, solar panels are definitely the way to go.

Can you recommend someplace that sells them? Finding panels or cells large enough to run a fridge might be challenging, no? I'm interested if you have a lead.

Submitted by Eugene on October 1, 2008 - 12:50am.

Generator, solar panels? You guys aren't seeing the big picture.

Take it from someone who lived though the collapse of the Soviet Union. If you're expecting a complete meltdown, what you need is a dacha. Go and buy one tomorrow. Don't even worry about paying the mortgage. We'll have either a foreclosure moratorium or hyperinflation (or both).

The biggest problem with having a dacha in San Diego - not enough local water. You have to prepare for the possibility of water shortages, pick a place with enough rain. Inland parts are wetter and cheaper, try Ramona or Lakeside. (Santa Ysabel and Warner Springs would be even better, but commuting from there during the transitional period will be painful) Install a big rainwater tank and start collecting water. Do some practice gardening, refresh your shovel skills.

Get a gun license, buy a shotgun and a lot of ammo. Dig a cellar to store foodstuffs. Build a barbed-wire fence around your property. Make sure that your dacha is well insulated and there is a fireplace, you may have to winter in it and it gets cold in Ramona in January.

Also consider moving out of San Diego, it's just not a good place to survive a depression. May I suggest Montana or Michigan?

Submitted by Casca on October 1, 2008 - 10:05am.

In fact I do pup. It's a subject I know quite a bit about. If you're serious, shoot an email to CascaATcasca.cjb.net

As for the Krugman dispute, who DIDN'T know the bubble was about to burst in 2005? The FDR-brought-us-out-of-the-depression bit is really a defense of the fraud of Keynesian economics. Friedrich Hayek was right. Keynes is The Road to Serfdom.

Submitted by Eugene on October 1, 2008 - 10:39am.

The FDR-brought-us-out-of-the-depression bit is really a defense of the fraud of Keynesian economics.

Sure, and dinosaur fossil record bit is a defense of the fraud of Darwinism.

Submitted by Casca on October 1, 2008 - 10:45am.

You want to defend Keynes? Please do. Twenty-five years ago Laffer proved Keynes was wrong. The more government takes, the more economic growth is smothered. If you want to grow government tax receipts, you have to let the peasants wet their beaks.

Submitted by Eugene on October 1, 2008 - 11:03am.

It's very simple.

* Keynesianism is the economic theory that is accepted by the majority of economists, especially nonpartisan economists outside the United States ( = Darwinism )

* Austrian school is an old Libertarian pseudoscientific theory ( = Creationism )

* Supply side economics is partisan Republican pseudoscientific theory that evolved out of Austrian school ( = Intelligent Design )

I'm not going to defend Keynesianism and I'm not going to criticize Austrians/supply-siders, simply because Keynesianism is the only nonpartisan scientific theory of the three. Just like I wouldn't waste my time convincing anyone that evolution is better than creationism. If you believe in creationism, you're too blinded by your prejudices (religion) to be capable of impartial analysis of my arguments.

Submitted by partypup on October 2, 2008 - 12:59am.

"In fact I do pup. It's a subject I know quite a bit about. If you're serious, shoot an email to CascaATcasca.cjb.net"

Casca, are you sure this is the email address I should use? My Yahoo! account is rejecting it.

Submitted by Casca on October 2, 2008 - 10:55am.

Pup, of course you have to replace "AT" with @.

Submitted by Casca on October 2, 2008 - 11:24am.

esmith wrote:
It's very simple.

* Keynesianism is the economic theory that is accepted by the majority of economists, especially nonpartisan economists outside the United States ( = Darwinism )

* Austrian school is an old Libertarian pseudoscientific theory ( = Creationism )

* Supply side economics is partisan Republican pseudoscientific theory that evolved out of Austrian school ( = Intelligent Design )

I'm not going to defend Keynesianism and I'm not going to criticize Austrians/supply-siders, simply because Keynesianism is the only nonpartisan scientific theory of the three. Just like I wouldn't waste my time convincing anyone that evolution is better than creationism. If you believe in creationism, you're too blinded by your prejudices (religion) to be capable of impartial analysis of my arguments.

That's some pretty nice rhetorical misdirection. Economics is a science? I suppose, if nostrums are medicine.

The reason the wheels fall off your evolution/creationism analogy is the same reason that the wheels fall off the economics as science argument. To wit: "Where is the utterly essential ingredient of repeatable experimental verification of falsifiable hypotheses? Without that--and economics surely doesn't have it--there can be no claim to science or the scientific method."

It is amazing that a mere twenty-plus years after Reagan/Laffer, an intelligent man can make an argument for demand-side over supply-side economics. Then again, if you didn't live through it, you probably never heard about it, since no matter the proven truths of supply-side economics, it never dented the thinking of those who desire to put the levers of economic power in the hands of those who desire bigger and more intrusive government. That includes both the bureaucracy, and edutocracy.

It's OK though. You're going to get a chance to learn by experience once again. "The fool's bandaged finger has wobbled back to the fire." ~Kipling

Submitted by peterb on October 2, 2008 - 11:27am.

For information on the Depression, read what people who lived through it had to say. Economics is hardly a science. Although academia is always selling it like it is. Try chemistry for those that would like to see what an actual science looks like.

Huge WPA projects like the Hoover Dam, GG Bridge and the Bay Bridge, were built from 1933 to 1936, had camps of unemployed men waiting nearby for a worker to die so that one of them could take their place.

Most of these projects were completed just in time for Europe to start a war. Remember that Europe was in battle way before the USA entered. The US became a major supplier for the Allied forces way before it joined in the war. This coupled with the eventual act of the US joining the war, brought the US out of a depression. The WPA was a desperation measure that helped, but by no means was the cause.

Submitted by Eugene on October 13, 2008 - 11:17am.

Well, guess who won the Nobel Prize in Economics today...