Money “In The Bank” Or “Under The Mattress” (October 8, 2012)

. . .

$          “They say that something is ‘money in the bank’ if it is a sure thing, but you must wonder whether ‘money in the bank’ is really ‘money in the bank.’”

C          “Or money in the credit union.  The Federal Reserve can create electrons but it cannot quickly create hard dollars.  The time will come when enough citizens simultaneously conclude that the financial system is a rigged chimera with a false facade.”

$          “Like the week of September 15, 2008.”

C          “Exactly.  With so few physical dollars in the bank to respond to demands for dollars, a financial institution will need to limit withdrawals to a small sum per depositor, perhaps $100.  Assurances that the funds are insured will not be reassuring.  The typical depositor does not want to hear that the account is insured when he or she wants to withdraw money from the account.  That event either will be the Big Jolt or will be caused by the Big Jolt that will lead to a collective loss of faith.”

$          “The news outlets will be forced to take a short break from the stories about rescuing kittens from trees to relay stories of angry depositors.”  

C          “And the populace will come to realize that money does not grow on trees.  So your money is only money in the bank if it is under your mattress.”

$          “The alternative is to leave the money in the bank and get .0000001 percent interest on the funds that you may never see again.”

C          “Seems that a few dollars in the pocket are not a bad idea.  After a Big Jolt, inertia and habit will incline others to accept dollars in the transition for some time.”

$          “Both paper dollars and gold may lose their luster at the same time.  The stuff does not offer much heat whether measured by calories or B.T.U.s.”

 . . .

[See the “e-ssays” titled “Is The Gold Standard Really The Gold Standard? (January 18, 2010)” and “Fiat Gold” / Fool’s Gold (May 2, 2011).]

Bumper stickers of the week:

“I will use my Fe [guns] and my Pb [bullets] to protect my Au and my ETOH.”

“I will use my skills and resources to develop a sustainable supply of clean H2O and to provide enough cals. [heat inside the body] and B.T.U.s [heat outside the body] to sustain me, my family and my community.” 

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