Author Topic: How much actual cash do you have on hand?  (Read 19566 times)

arebelspy

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Re: How much actual cash do you have on hand?
« Reply #50 on: October 16, 2013, 11:41:35 AM »
For those of you that have $0-100, are you planning on doing something similar to what I posted above:
Generally, $0.

If the debt ceiling thing actually gets to within a day of happening, I play to pull several thousand out of the bank in cash.

Or not going to bother?

I'm curious if you might expand on why you're considering this.  I'm not saying there aren't any valid reasons, but I'm failing to see how the debt ceiling will affect your ability to pay for things with plastic or what might happen to banks that has you concerned.

This is a good summary as to why.  From that article:
Quote
Imagine what would happen if millions of investors, covering trillions of aggregate maturities, suddenly found out that the safest asset on the planet defaulted.  The interest that was supposed to be deposited into their brokerage accounts, bank accounts, or accrued on their fixed income securities was suddenly not there.  Even if you donít think you own Treasury bills, bonds, and notes, you do.  It represents the cash reserves of nearly every major corporation in the S&P 500 as well as most major mutual funds.  It makes up part of your pension plan that sends you checks every month.  The Treasury makes sure your Social Security payments get sent (side note: For political reasons, I have a sneaking suspicion that were a debt ceiling default to happen, the Treasury would prioritize its cash outflows and honor Social Security payments above all others to avoid political unrest.  Payroll taxes alone should be sufficient to cover current benefits.  If it doesnít, it would accelerate the economic collapse as most Social Security money is spent quickly by retirees on things like food, shelter, and medical expenses, going right back into the economy.  The problem?  This isnít legal.  The Treasury has no authority to decide that it can honor certain bills and not others.  And even if it were allowed, the Treasury Department doesnít have the technology to handle it as it pays each bill due on a first-come, first-serve basis.  Meanwhile, credit rating agency Moodyís, on the other hand, insists it will happen based on what appears to be blind faith).
Panic will ensue.  Frightened investors, particularly retirees, will sell off their Treasury bonds, driving the price down and the interest rates through the roof.  When the crisis does pass, the Treasury will be unable to borrow at low rates as investors wonít trust them, anymore.  (To illustrate: A Treasury bond paying $5 in interest selling for $100 will yield 5%, but if investors panic and drive it down to $50, itís now yielding 10%.  That means if the Treasury wants to refinance at maturity or raise new money in the future, it will be competing with its own, old bonds, and have to issue them at 10%.)
Even worse, this will likely ripple through the banking system.  Insurance companies would go bankrupt as their risk-adjusted capital ratios would crumble.  ATMs would likely run out of money.  Banks would probably have to close for extended periods of time.  Workers would not get their paychecks.  The secondary cash equivalents markets, such as commercial paper, would begin drying up overnight.  And, unfortunately, given that the entire global monetary system is built on Treasury bills, bonds, and notes, the effects, globally, would be swift.  It wouldnít take long for it to show up in London, Tokyo, Paris, Berlin, Beijing, Bern, Ottawa, and everywhere else.
So at the very same time the Treasury faced rapidly escalating interest rates on the debt, the economy would be collapsing and generating less tax receipts.  It would be brutal.
Most profoundly, I doubt any of the other major global economies would trust the U.S. dollar again, meaning they would setup other reserve currencies, taking away a significant competitive advantage we have.

I'd peg the chance that it happens as under a half a percent.  But as we get closer with no deal (and as I'm writing this a deal look very, very likely), it becomes more of a possibility.

Even if default does happen, is cash likely needed? No.  Stuff will probably still work just fine.  However, could it hurt to have money in cash instead of in a checking account for a few days?  Again, probably not, so might as well.
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brewer12345

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Re: How much actual cash do you have on hand?
« Reply #51 on: October 16, 2013, 12:16:43 PM »
For those of you that have $0-100, are you planning on doing something similar to what I posted above:
Generally, $0.

If the debt ceiling thing actually gets to within a day of happening, I play to pull several thousand out of the bank in cash.

Or not going to bother?

I'm curious if you might expand on why you're considering this.  I'm not saying there aren't any valid reasons, but I'm failing to see how the debt ceiling will affect your ability to pay for things with plastic or what might happen to banks that has you concerned.

This is a good summary as to why.  From that article:
Quote
Imagine what would happen if millions of investors, covering trillions of aggregate maturities, suddenly found out that the safest asset on the planet defaulted.  The interest that was supposed to be deposited into their brokerage accounts, bank accounts, or accrued on their fixed income securities was suddenly not there.  Even if you donít think you own Treasury bills, bonds, and notes, you do.  It represents the cash reserves of nearly every major corporation in the S&P 500 as well as most major mutual funds.  It makes up part of your pension plan that sends you checks every month.  The Treasury makes sure your Social Security payments get sent (side note: For political reasons, I have a sneaking suspicion that were a debt ceiling default to happen, the Treasury would prioritize its cash outflows and honor Social Security payments above all others to avoid political unrest.  Payroll taxes alone should be sufficient to cover current benefits.  If it doesnít, it would accelerate the economic collapse as most Social Security money is spent quickly by retirees on things like food, shelter, and medical expenses, going right back into the economy.  The problem?  This isnít legal.  The Treasury has no authority to decide that it can honor certain bills and not others.  And even if it were allowed, the Treasury Department doesnít have the technology to handle it as it pays each bill due on a first-come, first-serve basis.  Meanwhile, credit rating agency Moodyís, on the other hand, insists it will happen based on what appears to be blind faith).
Panic will ensue.  Frightened investors, particularly retirees, will sell off their Treasury bonds, driving the price down and the interest rates through the roof.  When the crisis does pass, the Treasury will be unable to borrow at low rates as investors wonít trust them, anymore.  (To illustrate: A Treasury bond paying $5 in interest selling for $100 will yield 5%, but if investors panic and drive it down to $50, itís now yielding 10%.  That means if the Treasury wants to refinance at maturity or raise new money in the future, it will be competing with its own, old bonds, and have to issue them at 10%.)
Even worse, this will likely ripple through the banking system.  Insurance companies would go bankrupt as their risk-adjusted capital ratios would crumble.  ATMs would likely run out of money.  Banks would probably have to close for extended periods of time.  Workers would not get their paychecks.  The secondary cash equivalents markets, such as commercial paper, would begin drying up overnight.  And, unfortunately, given that the entire global monetary system is built on Treasury bills, bonds, and notes, the effects, globally, would be swift.  It wouldnít take long for it to show up in London, Tokyo, Paris, Berlin, Beijing, Bern, Ottawa, and everywhere else.
So at the very same time the Treasury faced rapidly escalating interest rates on the debt, the economy would be collapsing and generating less tax receipts.  It would be brutal.
Most profoundly, I doubt any of the other major global economies would trust the U.S. dollar again, meaning they would setup other reserve currencies, taking away a significant competitive advantage we have.

I'd peg the chance that it happens as under a half a percent.  But as we get closer with no deal (and as I'm writing this a deal look very, very likely), it becomes more of a possibility.

Even if default does happen, is cash likely needed? No.  Stuff will probably still work just fine.  However, could it hurt to have money in cash instead of in a checking account for a few days?  Again, probably not, so might as well.

All reasons I would rather have shotshells, food, water and booze on hand, but I keep some cash handy anyway.

Albert

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Re: How much actual cash do you have on hand?
« Reply #52 on: October 16, 2013, 01:47:11 PM »
I prefer using cash for most purchases (habit, I guess) so I always have some. Usually I take out 200 chf at the time so there is rarely more than 300 (not counting coins jar). Right now there is also couple hundred euros laying around from a vacation which turned out to be less expensive than I anticipated plus some small change (<50) in dollars and pounds as well.

Importance of having some cash in the valet was demonstrated to me just two weekends ago. Went hiking in the mountains with a friend and since we weren't sure how far we'd hike we bought train tickets only in one direction. At the end of the hiking we discovered that the ticket machine in the remote railway station only accepts cash (card function was broken). Luckily I had 100 francs in the pocket to pay for tickets back to the city for both of us... 

Loud Noises

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Re: How much actual cash do you have on hand?
« Reply #53 on: October 16, 2013, 11:24:38 PM »
I always keep 20 hidden in my wallet and 1k tucked safely around the house.  The 20 is for all those times I need cash and wasn't prepared for it and the 1k is just in case my bank has a major issue processing payments and I still need to take care of things on time.  Small adjustments for big peace of mind!

C. K.

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Re: How much actual cash do you have on hand?
« Reply #54 on: November 06, 2013, 03:33:51 PM »
I wonder how many who have already retired keep a stash of thousands in a vault behind a picture of Grandpa Nevel? 'Cause I'm totally going to stash extra cash in a vault. Just because I can.

jefffff

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Re: How much actual cash do you have on hand?
« Reply #55 on: November 06, 2013, 03:44:56 PM »
I figured you meant how much do I have in cash as opposed to securities/real estate, and was about to post given that when I read a few more posts. I actually completely forgot that physically carrying around cash was a thing for a moment.

aj_yooper

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Re: How much actual cash do you have on hand?
« Reply #56 on: November 06, 2013, 04:22:01 PM »
My wife likes to have $200 in her purse, while I keep about $70.  We have several hundred in cash in a strong box.  I put everything on my points cards.

clutchy

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Re: How much actual cash do you have on hand?
« Reply #57 on: November 06, 2013, 04:31:00 PM »
I keep $500 in our safe of varying denominations so I can make change or if we go to events with friends so I can pay cash. 

I really don't like splitting the bill...

brewer12345

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Re: How much actual cash do you have on hand?
« Reply #58 on: November 06, 2013, 04:33:39 PM »
I wonder how many who have already retired keep a stash of thousands in a vault behind a picture of Grandpa Nevel? 'Cause I'm totally going to stash extra cash in a vault. Just because I can.

Mine is in the gun safe, although I suppose I would do just as well hiding it at the bottom of a bucket of rice or in the freezer.