I’m really surprised that with all of the money being pumped into the system that the dollar is rising. Investors must REALLY be bringing a ton of cash back into US based investments to be outpacing the infusion. Interesting article, thanks for posting it.
You’re welcome…
My concern is that this rise is just temporary and misleading, like those little market rallies that happened in 2006 and 2007. I can’t believe that all the spending won’t cause bad inflation in the long term.
Well not the spending so much as the influx of dollars that are paying for that spending, but really same difference I guess. I wonder what effect the increased savings rate will have on the economy with people hoarding money? I hear they are increasing their savings rate but are they saving it in the bank or under the mattress? Anyone know someone that is too fearful to keep money in the bank that has actually pulled all of their cash out to keep it at home?
Here’s some funny quotes from Bill Maher’s monologue last week. Not everyone here is a fan of him I’m sure but they were funny none the less.
“And he does, because, I mean, some of our nations largest banks have been described this week as ‘dead men walking.’ The New York Times says they are insolvent, and here’s the thing. Nobody will say the names of the banks, because you say the names, their stock will tank even worse. But here’s a hint: one of them rhymes with ’s**tty bank,’ and the other rhymes with ’skank of America.’” -Bill Maher“I’ll hold my powder to the end, but really, it is a bad sign. I tried to withdraw $60 yesterday, and my ATM said, ‘you know, I’ve got to move some things around.’” -Bill Maher
“These banks are hurting. I opened a new account, and the lady asked me for a toaster.” –Bill Maher
“No, but it’s hurting everyone all over. You heard about this, the Oscars are going to be a lot less gaudy this year. The Oscars, where I’m a presenter this year … in the category I should have been nominated in. … No, my money is on ‘Slumdog Millionaire,’ which is also what I call my broker” -Bill Maher
Now, here’s the question. If this is temporary, sounds like you are correct, then we should be bulking up on gold now as the rising dollar and rising stocks pull metals like gold down?
GLD has been dropping good today, it seems to perfectly be an inverse mirror to the DOW.
I would think the risks of fire or theft would outweigh any benefits of storing large amounts cash at home. I’m not quite at the “hoard things at home” stage although we are supposed to store bottled water, etc. here for hurricane season and have an emergency plan, so I may try to kill two birds with one stone and do it anyway.
Gold sounds like a good idea–maybe dollar cost average in (do we do that with gold?) and pay attention to the price religiously everyday so you know when to get out.
I’d bet a lot of old timers are starting to hoarde, younger people probably haven’t yet. I wonder if the FDIC makes them less likely to hoarde cash or if they are still prone to doing it? You don’t even really have to follow the gold prices to know when to get out, just wait for the Dow to start climbing. At least on the surface that appears to hold true.
One of our tenants asked me to install a deadbolt on his door because he keeps his money at home. I don’t know if he’s had bad experiences w/ banks or just doesn’t trust them, but he keeps what little money he does have at home.
If you haven’t already I think it’s time for you to remind him (in writing) that your insurance doesn’t cover the loss of his cash or valuables should a break-in, fire, natural disaster, act of God (or dog), etc occur. Many people seem to think the landlord’s insurance will cover things like that, which obviously it won’t. Remind him of this and recommend he call an insurance agent about renter’s insurance. I can see this all playing out badly in the future if you don’t warn him…something happens, he loses his entire life savings, you get sued. You’ll win of course, but after spending money on a lawyer and whatnot.
Unless you’re trying to hide money from someone, there’s no reason to keep money at home. A bank’s viability has no effect on the FDIC insured funds. Just be sure you’re within the insurance limits. I think the current limit is $250k until Jan. 2010. Then it might go back to $100k.
The guy might not understand that. Or if he is an illegal alien he might not have the appropriate ID to get past the DHS rules now in place that apply to new bank accounts. Either way, not Justin’s concern other than telling the schmuck that it isn’t the landlords problem if his life savings is lost in a fire.
We explicitly state in our lease that “The structure and affixed equipment are the only things covered by our insurance policy. If you wish to insure your belongings, please contact an insurance company to purchase renter’s insurance.”
He’s a perfectly legal citizen. He apparently just doesn’t like/trust banks. He and his wife also pay with money orders too.
So he’s just a nutjob.
He’s paranoid enough to keep all his money at home, but not paranoid enough to think that you would try to steal it if he told you about it.
Interesting.
Of course if your bank goes belly up you can apply for the FDIC insurance. Just be ready to PROVE that you had money there and be willing to wait out the 2 to 3 year process.
The FDIC chairwoman Sheila Blair said in a CNBC interview that people with FDIC insured deposits would have uninterrupted use of the funds. There would no waiting period. Proof of funds should not be difficult with both the bank and depositors having record.
Many (even most) low income tenants deal strictly in cash. They don’t even have a bank account. Ironically, these are always my first rent collections of the month. When they get their government check, they immediately call me so that they don’t have all that cash laying around. (I’m happy to help).
Mike
The trick here in Raleigh, you gotta catch them for rent between the check cashing store and the liquor store, of which the two are strangely enough located right across the street from each and very near social services.
I bought a drill sergeant uniform from a local army surplus store I wear now when I collect the rents. Works great.
Did you get the Smokey the Bear hat too? Ah, the memories of OCS come rushing back…