Is A Bank Run Next?

Went into our local bank today to get a few check registers. One of the nice things about living in a small rural town, I know all of the tellers. Once it was my turn I approached the next window and said howdy to Kathy, the teller (Not her real name). She asked, “what’s up John?” I asked her for two check registers which she got and then said, “did you hear what the Fed did last night?” I told her no and she proceeded to tell me the following.

  • The Federal Reserve raised the overnight Repo amount from $500 Billion to $1 Trillion. Keep in mind the 2009 stimulus was only $700 Billion. Plus, the stimulus was debated for several weeks in Congress before it was passed.
  • Told the banks they no longer have to keep a reserve of 10% of total assets on hand, and
  • Interest rates were dropped to 0 to .25%.

I then asked her if customers are coming into the bank and taking money out of their accounts and she responded with widened eyes, “Yes! We are out of big bills and when someone wants to withdraw large amounts, we have to give them smaller bills.”

I asked her if it was a run and she said “no. But if you want to make a large withdraw please place an order by Friday and we will have your order Wednesday of the following week.”

I didn’t want to hog the tellers time or hold up the few folks waiting in line, so I said my goodbye to Kathy and left the bank a bit shaken.

Went home and started to look on the interwiz to see how accurate she was. She was spot on.

The purpose of this short article is to remind folks that preparedness includes having several weeks expenses on hand in the form of cash. Small bills are preferable as in this day and age of debit and credit cards; many businesses may not be able to cash a $50- or $100- bill.

Keep an eye on money availability around your AO in case you need to take more out of your accounts then the several weeks cash you already have in reserve. Remember, nobody thought there would be a run on toilet paper.

Last for kicks and giggles, who remembers this famous Jimmy Stewart scene from, It’s a Wonderful Life?

Click pic to reminisce

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By Published On: March 17, 2020Categories: News and Links5 Comments on Is A Bank Run Next?

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5 Comments

  1. The Gray Man March 17, 2020 at 18:38

    I told my wife this was coming with the banks. We’ve already prepared for it.

    • johnyMac March 17, 2020 at 20:04

      Good deal TGM!

      This comes from a very reliable source. Many banks in the tri-state area of NJ, CT & NY were only allowing business to be done by car in the drive by lanes. Doing business this way is a two fold problem. 1) The drive by lanes acts as a faucet to control a run. 2) Someone can not take large amounts of money from their account; lets say a months worth, due to the vacuum tubes.

      If we go into a national quarantine, (More likely to happen in a leftest state (s) like the tri-state area) who will be out there to fill the cash machines?

      Take money out now from your account. Do not over due it. Just enough for one months worth of expenses. After the drama passes, if you didn’t use it, you can put it back into the bank.

      Thanks Brother.

  2. Henry Bowman March 17, 2020 at 19:53

    went to local bbt bank, asked to withdrawal over 5k from 2 accounts..was told NO..

    I replied that they must be out of cash, she said no, that they were working on atm machine..

    i said, so what, got nothing to do w cash in vault you are REQUIRED TO HAVE,…she looked at manager, customers in line, my not so subtle appearance and attitude and said, i cant give you 100’s, i said ok, give me what you got..

    15 minutes later i walked out w cash in hand..

    remember all, unless its in your hands, you don’t own it, you are am unsecured creditor, bottom of the list…

    Wifey experienced similar attitudes as she went with mother to yank cash….

    Get it now, cause when the trucks stop, your banks will NOT be replenished and limits imposed…

    • johnyMac March 17, 2020 at 20:09

      Great report Henry.

      Yup as you read in my article, my bank could not give out bills $50- or larger but if a customer insisted they gave out $20- or smaller bills. I would want smaller bills anyway. \”/

      Check out below where some banks are only allowed business through the drive by window. A $5k stack of $20’s is about 3″. How would the vacuum tube give you $5k worth of cash if it was $10’s and $5’s?

      Thanks for your comments and advise Brother.

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