People Digging Holes in the Ground, Burying Cash and Gold
November 26th, 2008There are a few things to consider with cash.
First, in the U.S., police may seize cash from motorists even in the absence of any evidence that a crime has been committed. People routinely have large amount of cash stolen from them by local, state and federal law enforcement agencies.
Second, there has been a long running rumor that the cash will… change at some point, and that the old notes will have to be exchanged for new notes. I have no idea if there is anything at all to that rumor, but I wouldn’t chance it. You can imagine how it could easily go. You’ll have all the necessary documentation handy for when you go to exchange all of your old paper (that may have been buried under your porch for several years) for the new paper, right? Maybe people who try to exchange more than $5000 or $10,000 need to check with someone from Department of Homeland Security first.
Third, in any serious financial crisis, cash may or may not provide much purchasing power. In a hard crash, forget it. Items, such as food, guns, ammo, booze, drugs, etc. may be much more fungible.
Cash is just another basket. Why put too many eggs in just one?
Via: Smart Money:
The day the Dow fell 777 points, David Latham, a 45-year-old Alabama cattle farmer and electrician, was busy doing errands. Driving his Chevy pickup into Montgomery, he dropped by the hardware store, then stopped into the bank, where he withdrew $8,000 from his CD account, all in 20s. Back home, he slipped the four inch-thick bundles into a Ziploc bag, popped them into a waterproof PVC tube and set out for a remote location on his 300-acre property, where he dug a deep hole with a post digger. And then he buried his money.
Research Credit: Lagavulin
I love speculating about how MMO operators might adjust the rules of their game, so I’ll bite. For a while I considered the Amero to be highly plausible if not inevitable, now I have a more measured perspective that ranks the issuance of a North American currency under 20%. The dollar has functioned as an effective regional currency in North America, but also in Latin America and the Middle East, where countries are heavily dollarized (that is, the currency is integrated into pricing and purchases on a level beyond international trade reserves). There’s a strong possiblity that gold will be required, on some level, to collateralize international trade transactions, Eric Janszen has a piece on this here: http://www.itulip.com/forums/showthread.php?p=61139#post61139
I largely agree with Janszen but I diverge on a key point; a move to consolidate the gold supply with central banks doesn’t mean they have to use gold as the pricing standard, it could simply be used as a liquidity hedge to justify massive acceptance of Special Drawing Rights Mk.II as the international trading standard. What this means is they’ll try to get the international fungibility of gold, but use the complexity of their proprietary, brand-name financial instrument to maintain the loosey-goosey perks of credit-driven fiat money. It’s a way they could have their cake and eat it too. That said, having a SDR based on fewer currencies makes the SDR’s value more stable, and having those currencies spread wide helps as well. The Yen doesn’t quite function as an Asiano even if the dollar functions like an Amero, the Pound Sterling might stay in as homage to the people who started the franchise way back with the Bank of England. If the dollar failed to function in an Amero-like way, then it would make sense to issue a North American currency. However the dollar can be replaced by SDRs as the international standard and still function as a regional currency, it’s just one notch down.
In short, become as self-sufficient as possible to avoid being controlled or smothered with inflation.
There is no way I would bury US currency. That would be just as stupid as keeping it in a bank. I wonder how long until the USD is replaced at a huge loss to us.