It's a Lovely Spring Morning...

[Jonas]

It's a Lovely Spring Morning...

It’s a lovely spring morning. You climb into the car, crank the ignition, flip on the radio, and head for work. But the usual music isn’t on the radio. Instead you hear the newscasters announcing that due to “deteriorating economic conditions in Europe”, the government has declared a “bank holiday” and "Great Leader" will speak to the nation later today.

You quickly take a rough inventory of your situation. You have £7.00 in bills in your wallet, 34p in change in your pocket, and ¼ tank of gas in the car. You pull into the next gas station and are met by a hand-lettered sign on the pump which reads “CASH ONLY!!! NO CHECKS OR CREDIT CARDS!!!" You swing by the bank to see it closed with a policeman standing at the front door, his patrol car parked to block the driveway. You drive down the road to the local convenience store to find a crude “OUT OF ORDER” sign on the ATM machine, and the same “CASH ONLY” signs on their gas pumps. You dial your workplace on your cell phone to find out what’s going on and get a recorded message saying that “cell phone service has been temporarily suspended – please try later”. You head back home and try on your land-line to reach your workplace. The call rings through on the fourth time you try, but there is no answer. You figure that there probably won’t ever be an answer again. Now what?

You realize that you and your family now have to survive on whatever you have on hand at this moment for an indeterminate time period. Your bank account is inaccessible, and will remain so for some time. Your savings account is unreachable as well. Ditto for the three gold and seven silver coins in your safe-deposit box. Your credit cards are useless. Your job may never return and your steady pay check every two weeks may be a thing of the past. When (or if) you’re ever able to pull your money out of the bank, there may be a limit as to how much you are able to withdraw over a given time period, and the purchasing power of each pound will probably be considerably less than it is today.

This isn’t an improbable scenario. In the US in 1933, the President, Franklin D. Roosevelt, declared a week-long “bank holiday”, raided safe-deposit boxes for gold coins, and devalued the dollar. We see the ECB floating the same bright idea in Cyprus today. Take credit cards, an ATM, and a cell phone out of the above scenario and you’re back in time where the “impossible” actually happened in the USA and now could happen anywhere, anytime. I believe it will happen again, based on the world’s current economic situation, and the fact that the world’s currencies are all merely paper without backing of any kind.

My suggestion for this Spring: sit down with your spouse and children and paper and pencil and take a hard look at where you and your family would be in the above scenario. Then take what actions you can to improve your financial readiness. No, it’s not possible for everyone to have twenty gold eagles and £10,000 in cash tucked under the mattress. It is possible to go over your expenses, cut back where possible, sell excess “stuff” to raise cash, get cash out of your checking and savings accounts, empty and close your “safe-deposit” box, keep your car's gas tank at least half full at all times, and clip coupons and buy on sales to cut your food bill and still include an extra can or two for the emergency pantry. In other words, pray for the best, prepare for the worst, and start Spring off right.

[bigpaul]

1. make sure your food store is up to date...then increase it. 2. keep an "emergency fund" of cash at home. 3. NEVER BUT NEVER let your fuel tank go below HALF full and fill up IMMEDIATELY it gets to that level.

[MaryN]

Interesting post, Jonas. I do wonder what will happen if the financial sector shuts down. I have seen articles written by "Experts" advising people to invest in silver and gold as, according to them, cash will useless if a country fails. It occurs to me that it might be difficult to exchange precious metals for things because they would be no recognised exchange rate. How would you estimate what something would be worth in, say, links from a silver chain. Things are, after all, only worth what someone is prepared to pay for them.

[Highlander]

After I read the post, I talked to the other half ... and asked the question `How much do we have with us now, if this happened in the morning`?

Her answer was, not a lot, but I wouldn't bother about it, if you had a £1000 where would you spend it?

...and she is right, we are remote enough, that if this happened the way Jonas writes it, we don't have the ability to spend at all,... so we would be no worse or better off,... and no-one else would want our money around here, because they couldn't spend it either,...so money [ or silver and Gold ] would be worthless to us

Far better to put our money into stores now

[BeardyMan]

Well, I'd fill the car up an drive off. Go to the shop and take what I want. If you earn £7 an hour and you may not be getting paid are you going to defend someone else's goods? No. Then a quick round trip to the MSG, gather what we need and hunker down. Maybe a trip to the gun club to liberate some firepower.

This is why we prep

[Rush2112]

precious metals will always have value, but you cant eat them. good idea to have some cash for short term locallized emergency. for the main event cash is useless IMHO unless used for fire tinder.

i thought the recent siutation in Cyprus was interesting too. thats the sort of thing that could cause a run on banks. its also a sign of how desperate the governments are for increased revenue (taxes). they tax when the money is earned, tax when something is purchased, and now tax again if you dare put it in the "safety" of the bank. all in the name of fairness and equality. means everyone except the priviliged are equally miserable. sorry, i'll get off the soap box now.

anyway, i see these signs and many others, such as governments moving around extremely large amounts of physical gold, as signs something is going on. the financial markets are hitting record highs. why? is the economy booming? are companies hiring? are wages increasing? looks like a bubble to me.

[bigpaul]

i agree, when the whole sorry system eventually falls apart, money WILL be worthless but until then, if you have an emergency "stash" when it does fall apart you can then go and buy the things you will need/grab some more tins and dried food and pay in CASH whilst all the Sheeple are queueing at the banks and ATM's.

[MaryN]

I think it is a bit of a heads up as to how quickly the situation in Cyprus has developed. You can be pottering along thinking that things are - well not exactly OK, but fairly calm - and then overnight the whole thing explodes into a shambles. I'm concerned enough to do a rethink about finances; I suppose the same thing could happen in the UK, although I think there would be a bit more warning, hope so anyway.

[bigpaul]

i think the only thing (probably) that would trigger some kind of economic turmoil in the UK is if (and when) the EU collapses...its only Germany keeping it afloat now...when the German people say thats it, no more...then the whole sorry "European Project" will collapse like a house of cards.....