What to do to prepare for a Presidential declaration of a Bank Holiday
Posted on June 26, 2009
Filed Under General Insanity |
Several things have been going on that have really been bothering me. The first item is the fact that many US Embassies have been issued a year’s worth of operating expenses in US currency and told to convert it to the currency of the country in which they are located (except for the US Embassy in the UK). They have been told to do this right away. The second item that concerns me ties in with the first and comes from various underground news sources that the President is considering implementing a Bank Holiday. (http://prudentinvestor.blogspot.com/2009/06/newsletter-us-embassies-are-advised-to.html)
For me, this is pretty scary stuff. For those who do not know the history on the previous US Bank Holiday, here is a quick synopsis:
On March 5, 1933 President Franklin Roosevelt declared a US Bank Holiday and closed all the US banks for 4 days. (www.history.com) During this time, President Roosevelt successfully stopped the runs on US banks which was his primary intent. He also was able to push through Congress the Emergency Banking Act in that same four days. Passed by Congress on March 9, 1933 the act handed the president a far-reaching grip over bank dealings and “foreign transactions.” On April 5, 1933, Roosevelt ordered all gold coins and gold certificates in denominations of more than $100 to be turned in for other money. He also took the US off the gold standard allowing the US currency to inflate, which it could not do if backed by the price of gold. After the Bank Holiday was over, one third of US banks did not reopen.
Now if President Obama is going to pull the Bank Holiday plan out of the Roosevelt playbook, I think things will happen much differently this time around. Banking today is different than in 1933. First, there are Credit Unions. Though they would likely stay open during a Bank Holiday, their access to cash will be limited as they need to go to a bank somewhere to acquire it so expect them to quickly run low on cash. Historically, it wasn’t until 1934 that President Roosevelt signed the Federal Credit Union Act into law. (https://www.rbfcu.org/NB/html/Reference/AboutUs/HistoryofCu.htm)
Also, there was no computer access to online banks, ATM’s, or credit cards in 1933. If a Bank Holiday were proclaimed today, how would these issues be handled? Likely, they would have to be shut down as well during the Bank Holiday period. This of course, presents a serious dilemma for most of us. How do you buy food and gas without hard cash if credit cards, debit cards and ATM’s are non-functional? How do you pay bills if no one will accept a bank check not knowing if it is good? Is everyone starting to get my drift here? This is pretty scary stuff. The last Bank Holiday lasted four days. How long would this next one last? Only one person knows, President Obama.
The fact is the $900 Billion payout to bail out our US banks last winter is not working. The economy is still sagging, unemployment is still rising dramatically, banks are not lending money, home mortgages are down and car sales have plummeted. Even Warren Buffet now thinks the US may need a second stimulus package. (www.bloomberg.com) How do we afford that? We are still printing all the money to cover the last stimulus and bailout.
So in a nutshell, here it is. To date I have recommended to all the family and friends that read this website, to stock up on food and buy silver. I still recommend these strongly. I will now add a third requirement. Take your money out of the bank right now, today, and have plenty of cash on hand. I suggest at least $1,500 to $2,000. If a Bank Holiday is declared, you will need cash, as I expect that is all that will allow you to buy food and gasoline. I also need to mention that Walmart right now has small fire-safes on sale for $39.95. I would suggest you pick one of these up to lock up your silver and cash since stuffing it all in a mattress is a real bad idea. As usual, all comments on this issue are welcomed and as things develop economically, I will add more to this blog.
One last note, if you have anything in a bank safe deposit box, take that out now as well and put in that new fire-safe you are buying. Not only will you not have access to your safe deposit box during a Bank Holiday, but with the new rules signed into law by President Bush last fall with the Homeland Security Act 2, items in a bank safe deposit box can be confiscated by the bank at will.
Clayton
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Based on the latest news I have read today, more and more economists are expecting a Bank Holiday around September 30th, 2009. Many are saying it will last 4-5 days and several are saying it is a prelude to a second Bank Holiday sometime after the first of 2010 that will involve a change in national currency.
Make sure you have cash on hand when this Bank Holiday happens. Remember, a Bank Holiday is only needed to stop a run on the banks. In this case however, it looks to be a prelude to the government merging banks all over the county into super-banks. This is why so many of them are not using the Federal funds they were given to make loans, but are keeping the cash in reserves in order to make the merger transitions easier.
Clayton
Ouch, Brazil and Canada are dumping US Treasury’s.
http://online.wsj.com/article/BT-CO-20090720-709838.html
This is very intresting information, Thanks!!!!!!! I have heard this before and was told to keep nothing higher than a $50.00 dollar bill, mosty keep ones, tens and twentys. I am not sure what will happen to the cash we have on hand when we switch to a new currency. Will we get equal amounts of new currency for the old currency–OR will the dollar be not worth as much as the new currecy—Or will we be limited on how much cash you can trade in for new currency????? I do not think the Gov’t will give us this info until we are in dire straits trying to buy food and gas. Anyone have any idea???? Please share info with us!! What if we started converting some of our money to Euro’s???? What is a safe plan of action????!!!???
Just a thought to ponder—–What if the Gov’t decides not to recognize cash at all anymore, at the time of transition—–the Banks will only recognize as currency the amount that you have in your Bank acount?????!!!!!!!//???? What then????
[…] Preps: more thoughts on declaration of a banking holiday. […]
The latest information I have read is that September 30, 2009 there will be a switch to the new Treasury Dollar from the Federal Reserve Note. This new Treasury Dollar supposedly will be in compliance with the Basil III anti-money laundering rules. This September 30 date also matches up with the current speculation on the upcoming Bank Holiday. The new Treasury Dollar is supposed to be backed by gold and will be worth 1/35th a gram of gold. Not all banks are cooperating with this move.
How the exchange will occur with Fed Notes to Treasury Dollars, I am not sure. But if not all banks cooperate with the switch from the Fed, then there will likely be runs on those banks. There has only been one proven way to stop a run on banks…you guessed it, a Bank Holiday.
Clayton
I ran across this quote today. It is worth noting:
“You may want some cash on hand before the herd moves on this, but if you do, you may be in fact helping to cause what follows. Some quandary, huh? Couple of months worth oughta do it. Remember, amounts over some threshold level ($2,000???) can trigger a suspicious activity report to the feds…that’s public knowledge.” http://www.urbansurvival.com/blog/
A new update on the Bank Holiday. It is a quick video.
http://www.youtube.com/watch?v=y_aReYGnCbY