PREP Prepping for a possible banking shutdown or denial of services

[SageRock]

How might one prepare for a possible banking shutdown or denial of services?

One immediate strategy is to simplify one's financial life -- carry little or no debt, store substantial preps to last for months or years, use fewer services, put a freeze on new credit, and keep credit cards in the "locked" setting except when in brief periods of use. Avoid using credit cards where at all possible. The use of debt is at variance with simplicity and stability.

When using a credit card, pay it off as soon as the goods or services are received in good order. Don't assume that payment can be postponed until future income is received -- that can lead to an unstable situation if the expected income does not arrive on time or if payment systems are down.

It can be helpful to "pay ahead" on routine monthly or quarterly bills. This buys time if systems are down.

Consider possible scenarios and create plans for each. This can provide a ready-made plan in time of need.

Have cash outside the banking system, and have useful barter items as well.

Consider an outlook where the banking system is like the San Andreas earthquake fault -- it could fail at any time with no notice, creating considerable destruction and havoc. If you've lived in earthquake country, or if you've lived through an earthquake, you know that there is basically no warning -- sometimes just a brief rumble a few seconds before the quake, as the initial, faster, less damaging waves pass through. The banking system could fail catastrophically in a similar way, with very little notice. Think ahead, and plan for this potential failure, just as you would for a natural disaster.

The current financial system is highly unstable and subject to potentially catastrophic outcomes. Everything seems fine for now, just as it does before the earthquake shifts the very ground under our feet with little or no warning in the midst of "life as usual."

 

[von Koehler]

My understanding is that the conversion from cash to digital money is due to start in a few months.

I am supposing there will be a grace period for exchanging cash for digital money. But after that deadline cash will be be made worthless.

The question becomes what is the best use of cash now?

This currency exchange is rather common in Europa but it will be first for America.

 

[Deena in GA]

Good info, especially for people new to prepping!

 

[Old Gray Mare]

With the un-banking of Nigel Farage in the UK this may become a significantly more wide spread concern. He might be the test subject for this concept. If they can successfully cut him off from funds and credit, who's next?

 

[nomifyle]

So with a bank shut down can you still use your money to pay for something electronically. If not that is theft.

 

[Theophilus]

If "your" money is in the bank, it isn't yours!

 

[Ragnar]

If the banks are shut down I imagine the their credit card division is too…. I mean with the debit is this country on CC if that happens it will be a while before they get to you.

 

[Dux]

I wouldn't worry very much about CC-mortgage-other debt if the banks have a holiday. Cash in hand is important for any crisis.

 

[Blacknarwhal]

I wouldn't worry very much about CC-mortgage-other debt if the banks have a holiday. Cash in hand is important for any crisis.

Store cash at home. It will be the opportunity of a lifetime to buy things at pennies on the dollar because no one has dollars.

Eventually there will be nothing left to buy, but for that first couple days or so you will be a WINNER.

And yes, any bank-related debt will be meaningless. What can you do, set up an escrow account at the bank that isn't open?

Same with property taxes.

 

[bracketquant]

How might one prepare for a possible banking shutdown or denial of services?

One immediate strategy is to simplify one's financial life -- carry little or no debt, store substantial preps to last for months or years, use fewer services, put a freeze on new credit, and keep credit cards in the "locked" setting except when in brief periods of use. Avoid using credit cards where at all possible. The use of debt is at variance with simplicity and stability.

When using a credit card, pay it off as soon as the goods or services are received in good order. Don't assume that payment can be postponed until future income is received -- that can lead to an unstable situation if the expected income does not arrive on time or if payment systems are down.

It can be helpful to "pay ahead" on routine monthly or quarterly bills. This buys time if systems are down.

Consider possible scenarios and create plans for each. This can provide a ready-made plan in time of need.

Have cash outside the banking system, and have useful barter items as well.

Consider an outlook where the banking system is like the San Andreas earthquake fault -- it could fail at any time with no notice, creating considerable destruction and havoc. If you've lived in earthquake country, or if you've lived through an earthquake, you know that there is basically no warning -- sometimes just a brief rumble a few seconds before the quake, as the initial, faster, less damaging waves pass through. The banking system could fail catastrophically in a similar way, with very little notice. Think ahead, and plan for this potential failure, just as you would for a natural disaster.

The current financial system is highly unstable and subject to potentially catastrophic outcomes. Everything seems fine for now, just as it does before the earthquake shifts the very ground under our feet with little or no warning in the midst of "life as usual."

If it's FRNs, cash, check, debit cards, units of account, special drawing rights, etc..etc...it's all debt.

 

[babysteps]

I wouldn't worry very much about CC-mortgage-other debt if the banks have a holiday. Cash in hand is important for any crisis.

Oh, I don't know about that first part. Way back in the 30s there was quite a rash of bank closures and if your bank closed - well, your money was "there" but you couldn't access it, sometimes for months, AND you still had to make your mortgage/debt payments. Lot of folks lost their homes and struggled to survive who had plenty of (unaccessible) money in the bank.

Now obviously this was WAAYYY before online/virtual banking, so I don't know how that will change things, but - there *is* precedent for your bank being closed but still being held accountable for your debts.

So having cash in hand - yeah. I would consider it critically important.

 

[joannita]

During the depression years, my cousin's grandfather took his money out of the bank the day before it crashed. He was subsequently able to built a house with his cash on hand.

 

[seraphima]

Pay the property taxes early!

 

[SmithJ]

Cash (U.S. dollars) will be around for quite a while.

 

[Dobbin]

So with a bank shut down can you still use your money to pay for something electronically. If not that is theft.

Yup. And you find a lawyer and bring suit against the banking institution.

And there it will be "slow walked" through the court system.

Charges - two months
Court Appearance - another month
Court Testimony - three weeks give it a month for all the "affidavits" to be rounded up.
Judicial/Jury Decision - give this another three months if Judicial, a week for jury once assembled (month delay in assembly)

Meanwhile you have groceries to be bought, car gas tanks to be filled, presents for deserving equine to be given, heating bill, mortgage, and all the sundries of "modern civilization" to be paid for.

In the case of Nigel Farage, the "unavailable funds" are not "bank closure." It's simply "planned harassment" because of his populist politics. This situation is not resolved as of this writing. One expects that Nigel is existing "due to the generosity of friends." A tough situation to put your friends to.

But, Digital Banking opens the door to it being "closed." To you. And (sorry Owner) it may be caused by something your horse said on the Internet.

That USED to be the advantage of the Internet.

Nobody knows you're a dog.

Dobbin

 

[Luddite]

Got a job?
Got a pension/annuity/other income?

You WILL be "switched over". At least partially. Sorta like "partially pregnant".

Advice in post 1 seems sound at any rate.

Beans, boolets, and booboo gauze are always potential mediums of exchange outside the system.


I remember an episode of MASH (teevee series) that dealt with a scrip changeover. Switching from one currency to the next to mitigate black market commerce.

Hilarity will NOT ensue this time...

 

[Samuel Adams]

Prepped for such a contingency, permanently, in mid-1997.

Haven’t looked back.

 

[West]

Yeah, would recommend to have plenty of hay and or fields with feed and livestock. No mortgage. Of course cash and other liquid assets.

 

[Samuel Adams]

other liquid assets.

 

[mecoastie]

Old Stone Bank in RI went insolvent in 1993/94. My folks had a lot of money in there, both personal and business. We were on vacation at the time and heard about it on the radio and confirmed with a phone call to my grandparents. They were fortunate in that they kept some money in 2 other banks/CUs and my grandparents were able to help until all the accounts were changed to different institutions. I think it took over a year to get their money back. Lesson I took from that was to diversify. Couple different accounts in different savings institutions and cash on hand.

The problem with this supposed switch to all digital is what are you going to do with all that cash. I know guys that do cash jobs and then use that to buy groceries, gas etc. Once these stores stop taking cash what do you do? I am not going to be using scrap paper as a means exchange. Will kill the cash economy.

 

[West]

Thinking TPTB, know if they do get rid of cash. Then they gotta make it so they can still sell drugs with the new digits. And still get pay offs, protection, etc rackets.

Might be some unintended consequences for TPTB as well.

 

[bracketquant]

My understanding is that the conversion from cash to digital money is due to start in a few months.

I am supposing there will be a grace period for exchanging cash for digital money. But after that deadline cash will be be made worthless.

The question becomes what is the best use of cash now?

This currency exchange is rather common in Europa but it will be first for America.

Send all of your cash to me now, and then I'll be able answer your question about its best use.

 

[Dobbin]

Thinking TPTB, know if they do get rid of cash. Then they gotta make it so they can still sell drugs with the new digits. And still get pay offs, protection, etc rackets.

Might be some unintended consequences for TPTB as well.

Um. If with their digital dollars they can turn you "off" - then they can turn their friends "on" - financially if not literally.

Being "connected" (i.e. "knowing someone") will become the new human past-time.

One is reminded of Ayn Rand's description of the 20th Century Motor Car Company.

"Do I have to tell you what happened after that -- and into what sort of creatures we all started turning, we who had once been human? We began to hide whatever ability we had, to slow down and watch like hawks that we never worked any faster or better than the next fellow. What else could we do, when we knew that if we did our best for 'the family,' it's not thanks or rewards that we'd get, but punishment? We knew that for every stinker who'd ruin a batch of motors and cost the company money -- either through his sloppiness, because he didn't care, or through plain incompetence -- it's we who'd have to pay with our nights and our Sundays. So we did our best to be no good.

And the "connected" get a pass...

"Gerald Starnes was our Director of Production. We never learned just what the size of his take of -- his alms -- had been. It would have taken a staff of accountants to figure that out, and a staff of engineers to trace the way it was piped, directly or indirectly, into his office. None of it was supposed to be for him -- it was all for company expenses. Gerald had three cars, four secretaries, five telephones, and he used to throw champagne and caviar parties that no tax-paying tycoon in the country could have afforded. He spent more money in one year than his father had earned in profits in the last two years of his life. We saw a hundred-pound stack -- a hundred pounds, we weighed them -- of magazines in Gerald's office, full of stories about our factory and our noble plan, with big pictures of Gerald Starnes, calling him a great social crusader. Gerald liked to come into the shops at night, dressed in his formal clothes, flashing diamond cuff links the size of a nickel and shaking cigar ashes all over. Any cheap show-off who's got nothing to parade but his cash, is bad enough -- except that he makes no bones about the cash being his, and you're free to gape at him or not, as you wish, and mostly you don't. But when a bastard like Gerald Starnes puts on an act and keeps spouting that he doesn't care for material wealth, that he's only serving 'the family,' that all the lushness is not for himself, but for our sake and for the common good, because it's necessary to keep up the prestige of the company and of the noble plan in the eyes of the public -- then that's when you learn to hate the creature as you've never hated anything human.

Dobbin

 

[West]

Um. If with their digital dollars they can turn you "off" - then they can turn their friends "on" - financially if not literally.

Being "connected" (i.e. "knowing someone") will become the new human past-time.

One is reminded of Ayn Rand's description of the 20th Century Motor Car Company.



And the "connected" get a pass...



Dobbin

Right, but I was thinking about all that cash the PTB and there cohorts get after the government doles out the safety net credits and contracts.

Most drugs and even alcohol is bought by the working poor and the dependent with cash. Then a large percentage of that is returned back to them by way of tax and payoffs etc...

 

[Dobbin]

Most drugs and even alcohol is bought by the working poor and the dependent with cash. Then a large percentage of that is returned back to them by way of tax and payoffs etc...

In Cow Hampshire the State Liquor Stores don't take EBT cards. Credit or Cash is allowed. What Kinds of Products Cannot Be Purchased With SNAP Benefits?

But that is now.

If the US goes to a "cashless society" then that will change. Not to say that some won't be sold off the rear loading dock in exchange for something other than cash. It is the original occupation.

With Digital Dollars they will "regulate" how much you can take. Yunno - for the good of society. They recognize you have "needs" and they're there to "regulate" your needs.

And if you're a "friend" and perhaps have big tah-tahs, perhaps a bit more.

Dobbin

 

[West]

In Cow Hampshire the State Liquor Stores don't take EBT cards. Credit or Cash is allowed. What Kinds of Products Cannot Be Purchased With SNAP Benefits?

But that is now.

If the US goes to a "cashless society" then that will change. Not to say that some won't be sold off the rear loading dock in exchange for something other than cash. It is the original occupation.

With Digital Dollars they will "regulate" how much you can take. Yunno - for the good of society. They recognize you have "needs" and they're there to "regulate" your needs.

And if you're a "friend" and perhaps have big tah-tahs, perhaps a bit more.

Dobbin

They will (tptb) have to figure out how to keep the working poor and dependent on them in good supplies with drugs and alcohol.

Or else.

Maybe a new government approved ATD card?

Alcohol-Tobacco and Drug credit card.



Thinking out further though...

Will the producers of said products take the credits from the ATD card, if they continue to devalue credit digits even?

IDK

 

[Dobbin]

Will the producers of said products take the credits from the ATD card, if they continue to devalue credit digits even?

Separate issue.

Like the entire theme of Atlas Shrugged - how do you motivate producers to produce if there is nothing in it for them (other than labor.)

Compulsion (force) won't work.

And watching your life's saving "disappear" in inflationary "zeal" is the surest way to destroy motivation to improve one's life savings condition.

"Let Owner take care of me."

Chattel have thought that since the dawn of time. I should know.

My prediction is that Digital Dollars alone won't work - ESPECIALLY if it is used as a tool of compulsion. Humans are just not "wired" that way.

Now "barter" as a substitute WILL. Which is where you'll end up with the death of physical dollars.

And Gold and other metals MAY "augment" barter. Unless they propose for Digital Dollars, like the BRICS, to have backing in Gold.

So far that is not in the cards.

Dobbin

 

[CaryC]

Just my opinion, that and a dollar will get you a dollar.

1st Concerning debt, it is to be paid, regardless of circumstances, bank closures, loss of job, nothing else matters, it is to be paid, period. Even if the debt is held by the bank that is closed, it is still to be paid. Other banks, the mob, will buy the debt for pennies on the dollar, and YOU will still owe it.

2nd the only way to beat a bank closure is to have cash on hand. You need to have several months worth of 1) to pay bills 2) to buy groceries/gas. That will vary by individual.

3rd apart from a complete banking collapse nation wide, most banks are FDIC insured and you will get part or all or your money from the bank, but it will take time, and those bills still come due.

4th if you have accounts that are not local, like a credit card that is held by a bank in NY and you live in MS, you can still pay the bill using a Money Order from the post office, and mail it in.

Lastly it is best to cut your dependence on cash, or how much you need to keep on hand. Which means cutting debt, and having preps on hand so as to not be dependent on cash on hand any more than is absolutely necessary.

Changing the subject somewhat, going digital.

To a certain extent that has already happened. Do you use a debit card, pay by direct transfer from a bank, by phone or computer?

The big shebang is going to be CBDC. At this point the mandatory part isn't going to happen. FL has already done it, and in the next session MS is going to outlaw the mandatory part, maybe even the use.

So not in the near future, what will happen in the distant future is unknown, unless you count the Mark. So prepare for the distant future by prepping barter, getting away from needing cash by paying off bills, and storing food and usable materials (soap, etc.)

The no. 1 item to pay, and paying as much as possible so much that it hurts, is your house. You will always have a place to live. If you live in a place that requires taxes on the house even after it's paid off, prep for that.

For those who rent, a house would be much better, but is not possible for some, so prep with cash on hand to pay the rent. There is no getting around it.

 

[northern watch]

How might one prepare for a possible banking shutdown or denial of services?

One immediate strategy is to simplify one's financial life -- carry little or no debt, store substantial preps to last for months or years, use fewer services, put a freeze on new credit, and keep credit cards in the "locked" setting except when in brief periods of use. Avoid using credit cards where at all possible. The use of debt is at variance with simplicity and stability.

When using a credit card, pay it off as soon as the goods or services are received in good order. Don't assume that payment can be postponed until future income is received -- that can lead to an unstable situation if the expected income does not arrive on time or if payment systems are down.

It can be helpful to "pay ahead" on routine monthly or quarterly bills. This buys time if systems are down.

Consider possible scenarios and create plans for each. This can provide a ready-made plan in time of need.

Have cash outside the banking system, and have useful barter items as well.

Consider an outlook where the banking system is like the San Andreas earthquake fault -- it could fail at any time with no notice, creating considerable destruction and havoc. If you've lived in earthquake country, or if you've lived through an earthquake, you know that there is basically no warning -- sometimes just a brief rumble a few seconds before the quake, as the initial, faster, less damaging waves pass through. The banking system could fail catastrophically in a similar way, with very little notice. Think ahead, and plan for this potential failure, just as you would for a natural disaster.

The current financial system is highly unstable and subject to potentially catastrophic outcomes. Everything seems fine for now, just as it does before the earthquake shifts the very ground under our feet with little or no warning in the midst of "life as usual."

How might one prepare for a possible banking shutdown or denial of services?

I think cash will be good for some period of time after the system goes down, after that silver, gold and bartering.
There will be a growing black market.

It can be helpful to "pay ahead" on routine monthly or quarterly bills. This buys time if systems are down.
Companies which use automatic payment from a bank account will be screaming to the government to get the system up and running

And credit cards will also go down, if the system goes down. The credit card companies expect to be paid like any business. If you cannot carry out transactions like paying your credit card bills, how long to you expect the credit card to work?

 

[West]

Meat on the hoof. No offense to our resident horse!

Might be able to even find herd or livestock security specialists for a percentage of meat at butcher time.

 

[Blacknarwhal]

View attachment 423046

Perfectly valid, and don't take no guff about being a "drug dealer".

I can turn two liters of apple juice into a low-end wine with sugar, yeast, and a plastic soda bottle. I mean to have a trade when SHTF.

 

[northern watch]

Just my opinion, that and a dollar will get you a dollar.

1st Concerning debt, it is to be paid, regardless of circumstances, bank closures, loss of job, nothing else matters, it is to be paid, period. Even if the debt is held by the bank that is closed, it is still to be paid. Other banks, the mob, will buy the debt for pennies on the dollar, and YOU will still owe it.

2nd the only way to beat a bank closure is to have cash on hand. You need to have several months worth of 1) to pay bills 2) to buy groceries/gas. That will vary by individual.

3rd apart from a complete banking collapse nation wide, most banks are FDIC insured and you will get part or all or your money from the bank, but it will take time, and those bills still come due.

4th if you have accounts that are not local, like a credit card that is held by a bank in NY and you live in MS, you can still pay the bill using a Money Order from the post office, and mail it in.

Lastly it is best to cut your dependence on cash, or how much you need to keep on hand. Which means cutting debt, and having preps on hand so as to not be dependent on cash on hand any more than is absolutely necessary.

Changing the subject somewhat, going digital.

To a certain extent that has already happened. Do you use a debit card, pay by direct transfer from a bank, by phone or computer?

The big shebang is going to be CBDC. At this point the mandatory part isn't going to happen. FL has already done it, and in the next session MS is going to outlaw the mandatory part, maybe even the use.

So not in the near future, what will happen in the distant future is unknown, unless you count the Mark. So prepare for the distant future by prepping barter, getting away from needing cash by paying off bills, and storing food and usable materials (soap, etc.)

The no. 1 item to pay, and paying as much as possible so much that it hurts, is your house. You will always have a place to live. If you live in a place that requires taxes on the house even after it's paid off, prep for that.

For those who rent, a house would be much better, but is not possible for some, so prep with cash on hand to pay the rent. There is no getting around it.

You need to have several months worth of 1) to pay bills
How will you pay your bills? If the banks are down, you cannot pay your bills at the bank!
Sending cash by mail is not advised. Will the company to whom you owe money accept a cheque?

 

[CaryC]

Perfectly valid, and don't take no guff about being a "drug dealer".

I can turn two liters of apple juice into a low-end wine with sugar, yeast, and a plastic soda bottle. I mean to have a trade when SHTF.

LOL you don't even need to do that. Just let your cider sit on a shelf, and it will go hard all by itself.

If you'll watch this season of Joe Pickett you'll see elk eating old apples on the ground and getting drunk. Or an old episode of Andy Griffith where Barney kept his cider to long, and it got better and better as time wore on. LOL While I realize that those are fictional, there may be some truth to the story.

 

[ainitfunny]

Does that include credit unions?

 

[CaryC]

You need to have several months worth of 1) to pay bills
How will you pay your bills? If the banks are down, you cannot pay your bills at the bank!
Sending cash by mail is not advised. Will the company to whom you owe money accept a cheque?

Need to spend a little more time reading my post:

1) I stated, the paying bills part is from cash on hand, not in a closed bank. Like actually go to the utility company's place of business and pay it though the window.

2) No one said send cash in the mail, I never did. I said get a money order. A money order is an old fashioned way to go to the post office and swap cash for a US backed form of a check. and put that in the mail. Good anywhere in the world, and yes they absolutely are accepted anywhere, especially in a closed bank situation. You can even do it at walmart, at the service counter, give them cash and they will give a money order or digital transfer via Wells Fargo. At least anywhere in the US.

Reading comprehension is your friend.

 

[northern watch]

Does that include credit unions?

I would like that it does. Credit Unions are also dependent on the system to interact with companies to transfer money.

 

[northern watch]

Need to spend a little more time reading my post:

1) I stated, the paying bills part is from cash on hand, not in a closed bank. Like actually go to the utility company's place of business and pay it though the window.

2) No one said send cash in the mail, I never did. I said get a money order. A money order is an old fashioned way to go to the post office and swap cash for a US backed form of a check. and put that in the mail. Good anywhere in the world, and yes they absolutely are accepted anywhere, especially in a closed bank situation. You can even do it at walmart, at the service counter, give them cash and they will give a money order or digital transfer via Wells Fargo. At least anywhere in the US.

Reading comprehension is your friend.

Like actually go to the utility company's place of business and pay it though the window.
My parents used to do that, until the utility company stopped that and said pay your bills at a bank.

 

[colonel holman]

Banking shutdown will be as paralyzing as internet or grid shutdown. How will you pump gas if cards inactive? Fleets of trucks cannot run just due to their arrangements for fuel are shut off. Biggest of all, how many folks will actually got to work to keep nation functioning? The chaos and panic of no cards among the bulk of the public will shut everything else down. True, most of us who prep for such challenges will get by within our own tight AO… but so much else will cascade down that society grinds to a halt from something as stupid as inactive banks. Our society is so exquisitely complex and critically interconnected like a Rube Goldberge setup, that about anything can make it collapse. Society is just way too delicate to absorb much of a challenge.

ETA. Local currency will become interesting… .22 ammo, cigarettes, small containers of booze, little bags of pot, fresh water, peanut butter will all become great trade currency once things go fully to chit

 

[CaryC]

Like actually go to the utility company's place of business and pay it though the window.
My parents used to do that, until the utility company stopped that and said pay your bills at a bank.

That may be true in your area, but no area that I have ever lived in, has told me or my parents to pay their bills at a bank.

Different areas may do it different.

They have suggested using direct withdrawals, but if the bank is closed that won't work. So the utility will either make arrangements, or not get paid.

 

[Samuel Adams]

Perfectly valid, and don't take no guff about being a "drug dealer".

I can turn two liters of apple juice into a low-end wine with sugar, yeast, and a plastic soda bottle. I mean to have a trade when SHTF.

And don’t shed any tears if your brew goes to vinegar…..

You know what the rabid organic folks are paying for a gallon of that stuff ?