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?
Freedom Through Self-Reliance®