Get Ready for Banking Holiday

I don't know how many readers I have out there now, but for those of you who occasionally check out this blog, here is some of the best advice I can give you for these troubled times:

One of the first acts of Mr. Roosevelt after his inauguration in 1933 (of which 2009 looks to be a replay) was to declare a week long banking holiday. This allowed the bean counters to freeze all banking assets for inventories and bargaining and negotiations. Then after the holiday, about half of the banks in the country did not open their doors, and it was a while before folks could get ANY cash out of their accounts from those banks.

Because the 2008 election is so eerily similar to that of 1932, it is pretty safe to assume that 2009 will also strongly rhyme with 1933, and that banking holiday and other unexpected government measures will be forthcoming.

If you are not ready to have NO access at all to your bank accounts for a week, I strongly suggest that you build up a stock of cash in your home before the inauguration in the latter half of January. In fact, it would be a good idea to start building up some cash at home NOW, in case the stresses of poor spending during the upcoming holiday shopping season precipitates things even faster.

How much will you need? Well, if the holiday is for a week, then you need a week's worth of total spending. This includes groceries, gasoline, and anything else for which you might ordinarily write a check or use a debit card. It is also likely that if the banks are locked down, then they wouldn't be able to process any credit card transactions, either. This means you will need cash to cover typical credit card purchases as well. And keep in mind that the 1933 holiday was a week. It could be longer this time around. AND you may find that your particular bank may not re-open again, meaning you will have to wait until the FDIC gets around to your account insurance before you will get your assets out, and no telling how long that will take. So stash appropriately for this contingency, too, if you can afford it.

And, of course, all this assumes that retail outlets like grocery stores and gas stations will still be open during the holiday, which may NOT be the case. If so, then you will need to have some food stashed as well for the duration. Dry goods like beans and rice, canned veggies and meats, and even packaged goods like potato chips and popcorn are good to stock up on now. Frozen foods are also a good idea, if you have the freezer space. Remember, your neighborhood McDonald's and Starbucks may not be open for business after a couple of days of frozen assets.

Am I fear-mongering here? Not at all, just being prudent, just in case 2009 really does come off like 1933. And if it does, then you will have a historical road map to follow to survive the next 10-20 years. If it doesn't, then you won't have lost much interest on the cash you pulled out, and you can just re-deposit it when you feel comfortable.

Keep your eyes and mind open,
Michael Childress