A weekly thread to discuss financial matters - from personal all the way up to global.
Ground Rules
*Remember that we're all just Internet randos. Don't bet your life savings on a hot tip from this thread.
- Keep culture war in the culture war thread. Yes, global events may impact our personal finances, but that does not mean we have to incessantly harp on culture war aspects here. If you are going to discuss it, please stick to the practical impacts of it on an individual level.
- Be kind. Remember that everyone here comes from different circumstances. We all have different resources available and different risk tolerances.
- Don't let the perfect be the enemy of the good. Better is better. Celebrate people when they take a step up and work to move their finances in the right direction. Don't flame out because they haven't followed what you consider the optimal path. Everybody has to start somewhere.
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Notes -
If one thinks the electronic banking system might go down for a few weeks (but without loss of data; i.e. the money will be there afterward), how much cash should one keep on hand, beyond the obvious ongoing rent and food expenses?
I think if the entire electronic banking system went down for weeks that you could probably be late on a rent payment with no particular issues. Same with other bills. If no one can pay their utilities short of mailing cash, then that's an everyone problem and the utility companies will likely just defer the issue. If this is a concern, plan for an amount of cash necessary to pay for out-and-about physical world purchases. Say, a month's worth of food, gas, household goods, etc.
Maybe it's my lack of imagination, but I'm struggling to understand how the electronic banking system goes down for weeks without taking out a bunch of other services with it, either from the same source of failure or in a cascade. For example, parts of the power and utility sectors, along with the exchanges and settlement mechanisms they rely on. I guess various executives could suspend trading for a while.
My expectation is that, by week two, we'd be talking about WROL/TEOTWAWKI-type scenarios, in which case I suspect your standard prepper goods (physical gold, booze, dried food, etc.) would be more useful than cash. Why would faith in the U.S. dollar be strong after its banking system had just failed?
Okay, fine, I'll elaborate. I was talking about WWIII, specifically from a country Australian perspective - i.e. EMP very likely, and thus no more EFTPOS, but food should continue being available after maybe a short hiccup* (Australia's food surplus is bullshit-huge) and warlordism somewhat less likely than in the USA. I'm already decently prepped in general - emergency radio, 60m aluminium foil for protecting electronics including said radio, KI pills, 20L bottled water juuuust in case Adelaide gets nuked and the fallout hits us (this is unlikely), bicycle, high-powered bow (also unlikely to see use).
I will note that gold seems a lousy investment; while gold can't hyperinflate from overprinting, it still is for most intents and purposes a fiat currency; it is valuable because people think it's valuable, not because of its actual uses, and will become less valuable when people have less surplus. I'd expect the price of gold to come down in a catastrophe with respect to any currency that didn't fail, and my read is that the AUD wouldn't fail (I'm less certain that the USD wouldn't fail).
*I'm anorexic, so going without food for a few days is something I can live with, although I'd probably stock up a little on non-perishables if I suspect Doom Soon. I know more non-perishables than most people, so I'm not especially worried about "beating the rush".
Cries in Australian.
Otherwise fair enough. I'd still be more worried about distribution than production. I assume global energy markets will go nuts in a global scale war.
I have no particular love for gold as an investment. I think there is some evidence that people tend to find a default currency when faced with extensive barter. Have no idea what it would be in your scenario though.
And yes, I don't consider basic emergency preparedness irrational. Maybe not stocking three years worth of toilet paper, but like a few weeks worth of non-perishable food.
I mean, I think "literally broke out of mental hospital once" is the kind of thing that makes a firearms licence a bit tricky even in the 'States. But yeah. Actually, the weapons control laws here in Victoria are much worse than you'd expect from "bows are legal, no questions asked"; over half the things that are on the Naughty List aren't even as deadly as a bow.
As I said, there might be a hiccup, but if all else fails I can survive going hungry for a couple of days. Of course, the more-immediate issue at that juncture is surviving the people who've seen too many movies and think nuclear war and/or a slight food interruption is an excuse to turn into cannibal looters. The police would likely suffice to stop them, but as a contingency plan... well, that's where the bow comes in.
I'm just glad I lived in college during COVID - which used commercial toilet rolls, not the household ones that were hoarded.
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