Wednesday, May 3, 2023

Warnings Before Taking Your Money Out Of The Banks

 By Tim Gamble

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Bottom Line Up Front (BLUF): Before taking your money out of the bank to "keep it safe" from the current banking crisis, you should consider a number of potential dangers in doing so. Then make an informed decision based on your personal circumstances and concerns. 

"Take your money out of the banks while you still can!

That bit of advice has been quite common around the prepper, survivalist, and homesteading communities, especially for the past month or so, as news of the banking crisis grows. The idea apparently is to keep your cash hidden at home, or to turn it into precious metals, land, food storage, or other physical, items. But is it really good advice? Maybe. Maybe not. You need to make an informed decision, not an emotional one. Here are some risks to this strategy that you should consider before running to the bank:

1) You likely still need to be in the "system" for now. Most of us have various monthly bills to pay, debt payments to make, shopping to do, paychecks that need cashing, social security and other checks that need direct deposit, and so forth. It is getting increasingly difficult to do these things in a "cash only" manner, especially after the last few years of lockdowns and forced changes to the economy. Still possible, but difficult. And this situation will only get worse, as the push to a "cashless society" picks up steam. The reality is you likely will need to remain at least partially in the financial system to be able to conduct your day-to-day business. 

2) Possible "red flags" for IRS and  Law Enforcement. Withdrawing large sums of money, even if it is your money, will raise red flags for the government. Banks and other financial institutions are required by law to file a Suspicious Activity Report (SAR) or a Suspicious Transaction Report (STR) on any and every transaction over a certain amount. Additionally, they are encouraged to file reports on any transaction that might be deemed "suspicious," even if it is less than the required amount. 

3) Possible confiscation of your large sums of cash. As a part of the so-called War on Drugs, it is legal in many jurisdictions for Law Enforcement to seize large sums of cash under the assumption it is drug related, even without proof or a conviction. It is often difficult or even impossible for folks to reclaim their money, even after their innocence has been established. This is clearly unconstitutional and a basic denial of the long-held standard of "innocent until proven guilty," but it is a sad reality in today's America. 

4) Possible loss from theft, fire etc. If you plan to hide your cash at home (or elsewhere) in a safe place, there is always the possibility of losing it for reasons such as theft, or in a fire. Even money, and other important papers, in a fire-proof safe can char or even burst into flames inside the safe if the temperature of the fire around it gets hot enough. Be sure that the safe you use has as high a fire safety rating as possible to reduce this chance. But remember, there is no such thing as 100% safe. 

What if I put my cash into physical assets?

Some folks plan on turning most of their cash into physical assets, such as gold, silver, land, tools, guns & ammo, water collection and filtrations systems, solar power, long-term food storage, and other useful supplies. I like this idea, but offer a few things to consider: 
  • You are still going to need some money for normal use, for a least a while
  • Companies that hold your gold and silver for you are not insured by the federal government
  • Companies that hold your gold and silver for you can go bankrupt, then a Court will decide when and if you get your gold and silver
  • Companies that hold your gold and silver for you may not be able to return it to you after SHTF (corruption by the company, confiscation by government, etc)
  • Stuff in your possession (metals, tools, guns, food, supplies) can be stolen or destroyed by fire, flood, etc.
There is no such thing as 100% safe.

Life is risky. So risky, that everyone alive will one day die of it. There is no such thing as 100% safe. There are no real guarantees. You must learn to live with some risk in life, otherwise you are going to be a miserable person. The smart thing to do, of course, is to manage that risk - to minimize it the best you can. Then rest easy knowing you've done the best you can, and its in God's hands now.

Some quick ideas on managing risk from the banking crisis:
  • Get out of the system as much as possible.
  • This means paying off debt and reducing your expenses. 
  • Move to a cash-only basis to the extent that you can.
  • Keep a small amount of money in the bank.
  • How much money depends on your situation - I would suggest a couple of months' worth of expenses, plus an emergency fund with enough in it to cover a major home or car repair.
  • Keep a certain amount of cash in a safe place at home or elsewhere. Maybe divide it up between two safe places.
  • How much cash to keep is up to you and depends on your circumstances. 
  • Turn your remaining cash into useful physical assets, such as land (a homestead), useful tools, guns & ammo, solar systems, water systems, food storage, etc. 
  • Junk silver is a good option for a small percentage of your money, but other things should come first.
  • Some physical gold that you hold in your possession might make sense for wealthy folks with lots of extra money.
  • Remember, despite how they are touted on TV, gold and silver are NOT growth investments, but rather are a storehouse for your wealth. 
  • Turning some of your cash into useful training (self-defense, shooting, first aid, nursing, various trades, etc) is likely a good idea. Training cannot be stolen or lost to fire. 
The above list is what I am personally trying to do. 

A final bit of advice: Don't put all your eggs into one basket.


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