Economist Kenneth Rogoff just announced that he thinks a major U.S. bank will fail in the next few months. ?

Question

What should we do to protect ourselves? Take our $$ out of the banks?

Where is a safe place to keep our money?

Thanks

Answer 1

Unless you have over  100,000 dollars in the bank your account is insured by the FDIC so you will loose nothing, but your funds may not be available for a couple of days. The safe thing is to have  money  at two or more places or enough cash on hand to last a month. During the last round of bank failures in the 1980's I had my bank fail and the accounts  were picked up by  a rival bank with  no interruption in   banking services.

Answer 2

You should have some paper money on hand . The rest should be in silver and gold coins . A safe place would be under your shotgun in your gun safe .

Answer 3

May be just transfer money to another, safer bank, which has less risky assets.

Another problem is - you assume that $$ is only form of money - but currently there is a lot of much better/profitable and less risky opportunities.

One of solutions may include such tools as payment in advance - for education, health, other goods/services which will provide valuable utility from consumption of it, these goods/services better to be durable with long-term effect (so you may just change form of your assets from $$ to something different).

Of course transformation of assets shouldn't necessarily be complete but may be only partial (risk diversification) - you will need to leave some small amount of $$ for current payments anyway.

Answer 4

I don't think there is any way to know which banks will fail.  Because a bank usually tries to keep its financial problems secret until it can no longer honor its financial obligations.

The Federal Deposit Insurance Corporation insures people's accounts for up to $100,000.  But there is no official time limit when FDIC has to refund the money to insured depositors.  And if a few large banks fail.  Then FDIC might not have enough money to pay everybody.  And some people might have to wait a long time to get paid.

One way to avoid having all of your money frozen for a long time is to open accounts at several banks.  Chances are that at least one of those banks won't fail.

Another way to protect your money is to invest it in an Exchange Traded Fund that owns physical gold or silver.  The shares of these funds can be bought and sold on the stock market just like any other stocks.  But these shares are backed up by physical gold or silver.  Which makes them more safe than paper money.

Stock symbol for one popular gold fund is GLD.  And stock symbol for a popular silver fund is SLV.

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