SHTF Preparedness

[Jack Jones]

Harry recommended treasury bills or a treasury money market fund over traditional banks for your cash holdings. Suppose SHTF and the banks are having problems honoring people's deposits. Our cash is at a broker in the aforementioned forms. How do we go about cashing out some of our cash in this scenario to pay for groceries and the like? Given that the banking system is effed, how do I get access to my cash at my broker?

Harry did recommend keeping a stash of cash ($5-$20 bills) at home in case there is a bank holiday. Perhaps we're supposed to just float on that until the banks get their shit together, and use the cash in our brokerage account solely for rebalancing opportunities during tumultuous times.

[Mark Leavy]

It's not hard. Keep a couple of month's worth of $20 bills in a vacuum sealed envelope somewhere in the house or car.
I always preferred keeping it in the car - as it also solves the problem of what to do if you lose your wallet on a trip.

Not earning interest on a month's expenses is cheap insurance.

The financial system will sort itself out within a few weeks. If not, you have bigger problems and should be well on your way out of country.

The trick is in deciding who to tell about the emergency stash. You want your girlfriend to know it is there in case of an emergency, but you don't want her dipping into it for trivialities...

My current nomad solution is to have a mix of random hard currencies spread throughout my kit. It is enough to buy me a plane ticket and some nights at a hotel somewhere in the event that debit cards stop working for a while.

[ochotona]

I have $1000 in small bills at home... is that enough?

[blue_ruin17]

I keep 5% of my "cash" allocation in physical bills. This serves as a hedge against systemic risks such as: capital controls; bank holidays; infrastructure failures; and local or limited-duration national emergencies.

However, I keep no more than 5%, as physical cash is susceptible to theft, fire, confiscation (asset forfeiture "laws", anyone?), will be destroyed by rampant inflation in a way that T-Bill's or even cash in a HISA would not be, and is notoriously difficult to put back in 'the system'.

[dualstow]

It's an interesting exercise to think about this. Physical cash, as blue_ruin mentioned, is vulnerable to theft just like gold coins or bearer bonds, plus a great many things that wouldn't affect gold. (Invoke Walter White's wife spraying a mountain of cash to fend off silverfish here).

I don't own a car, but if I did I'd be afraid to store my cash there as Mark does, for fear that my car could be randomly stolen. This is more likely than a banking failure (but, I get it. Most things are more likely). In your home, you should never secrete your valuable coins in something that a burglar (who knows nothing about the coins) might take. A car seems like an extension of that.

I don't prep but if I did, I would probably hoard silver coins. If the banking system has several weeks of trouble and no one will sell me food for silver, then I guess I'd be hungry.

Jack, since you specifically mentioned groceries, I will admit to having bought a bunch of those Mountain House dehydrated meals many years ago, before I heard of the pp or SHTF. The "best by" dates are ticking off, so I've been quietly eating my stash. Maybe I need to start a powdered food ladder.

Sometimes Venezuela comes up in these discussions: the problem may very well be that you have to wait in line and not the lack of cash.