Prepare for Financial Armageddon

This is a note I’ve started sending to some friends.

Hi!  Short note to say I’ve decided that by Monday I will have as much of my money as I can get my hands on comfortably placed under my mattress.  I’m basically saying the odds of theft from my hiding place are lower than the odds of a banking system lock up.

In the one percent chance (according to Deutsche Bank) that the treasury bill market locks up on October 17th, one thing that locks up with it could be the banking system, including credit card transactions.  I want a number of months cash on hand.  I may delay if the government does a temporary extension.  i’ll monitor it daily through Monday.

In some ways it feels very reactionary of me to do this.  On the other hand, it’s completely reversible, I can just redeposit it when things are settled.  Also on this other hand, I have lots of health, auto, and home insurance to protect me from events whose odds are less this week than the odds of a banking liquidity crunch.  So it seems prudent.

I’m not currently selling stock, but I am debating.  My portfolio is already down 10% so I think I’m going to ride it out.  However, Deutsche Bank also says that partial repayment of America’s previously incurred debt could lead the stock markets to a 45% drop.  That’s more than twice the stock market drop leading the Great Depression.

I wanted you to know what I was thinking.  Depending on the withdrawal size, banks may limit daily withdrawals or require a number of days to fulfill the request.  So I’ll work to understand that today, for me.

Just wanted you to know what I’m thinking so as to get you to think about it as well.  Feel free to pass this along.

Sean

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One Response to “Prepare for Financial Armageddon”

  1. James Thomas Says:

    I think this is hogwash. You presuppose that the dollar will still be an accepted currency after “Armageddon.” How is that going to happen if we default?

    Default is absolutely not going to happen.

    If you are that concerned load up on beans and ammo.

    DB just said 1% b/c they realize that people cannot understand bps. Is it really a 1% event? No bloody way.

    Monday s a bank holiday, BTW, in case you need to accelerate your bank run.

    How many rare events happen on schedule?

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