Banks can fail. Stocks can fail. Currencies can fail. I'm not saying it makes sense on the whole to bury your worth in cash. But there is an amount of paranoia that confuses things.
The interest in my savings account is laughable. It's marginally better than keeping in a mattress.
The mattress doesn't charge bullshit fees. The mattress doesn't arrest you for being the wrong color.
If you’re in the west. A major bank failing and Govt + insurance not covering the losses for customers means something we have not encountered as a modern society. That’s as close to a break down of modern society as you can get. Sure it’s possible. Cash will def be great then. However this is such an extreme situation that there’s no way to know what will be good in that situation.
I would think in a situation like that, we would have something similar to what happened to job losses and the stock market cratering like in March and April 2020. Except that cratering and job losses would continue while riots and protests all across would get bigger and bigger. Crime presumably would go up a lot too.
It slips out that your family has $20K in cash at your home…who knows what’ll happen in this dystopian situation.
In case of the banking system collapsing in a modern developed country? That’s such an extreme situation I’m not sure if holding cash would be the right hedge against it. That sounds more like a canned food and flour bags kind of time.
If a bank fails, the deposit insurance also fails and the government can’t step in either that will undercut the trust in all other banks too. I would expect a chain reaction of follow-on bank collapses and hyper-inflation.
'you’re in the west. A major bank failing and Govt + insurance not covering the losses for customers means something we have not encountered as a modern society.'
It's a common occurence u developing countries, people hedge against it by holding foreign currencies and tangiable assets like land. Its not that rare for people to live through multiple devaluations and currency collapses. Ofcourse you don't go around telling people about tour wealth
As krisoft said. In such an unprecedented and extreme situation, foreign currencies would likely not mean much either. The world is globalized. America defaulting on such a huge thing would likely bring down most of the world’s economies and currencies. Possibly some isolated countries would fare better. They’d still be effected like crazy too, but they’d be something.
Yes assets like land would help. However with banks failing like this, someone with more guns and aggression than you or I could come to our homes and take them from us in areas where LEO are not being paid and thus not doing anything.
With the failing banks and such, tracking down who owns what will be much more difficult when things get better. Changing failing bank documents can’t be the hardest thing in this situation.
The interest in my savings account is laughable. It's marginally better than keeping in a mattress.
The mattress doesn't charge bullshit fees. The mattress doesn't arrest you for being the wrong color.