Greek pensioners attempt to withdraw their money from one of the country’s national banks Louisa Gouliamaki / AFP – Getty Images
“How much do you rely on ATM’s?” that was the question I was asked last week by a work colleague during the Greek crisis. The answer? Not at all! It was a strange to realize how little I rely on getting cash out of the ATM machine. I use cards for most purchases as it is easier to track my spending. I do like having a little cash on hand though just in case. What if credit was suddenly cut off and limits were imposed on how much cash you could access from the ATM? That is what happened in Greece last week and their future is still uncertain. My brother-in-law was in Greece over the last couple of weeks. Citizens were only allowed to withdraw $60 Euro’s a day, that is if you were willing to wait in line. He told me that the wait time to access an ATM machine was 30 minutes. He went on to say, “It is strange. Some people act as if nothing is wrong, while at the same time everyone is trying to get their money out of the banks”. It is foolish to think that something similar could never happen where you live.
I do not say such a thing to scare anyone, but to inform so that one can prepare just like you would prepare for a hurricane or an earthquake.
According the Federal Reserve there is about $1.3 trillion of U.S. currency in circulation. It sounds like a lot, but remember other countries like Ecuador use U.S currency as well. Total outstanding consumer credit is $3.4 trillion. Credit out numbers cash 3 to 1 and if you start to add State and Federal debt it gets much worse. My head would spin if I added the government’s future liabilities on top of that.
Just look at the current and projected debt to GDP ratio by the non-partisan Congressional Budget Office:
The U.S. will certainly hit another crisis over the next 10 to 20 years barring some major unforeseen positive disruptions. So what to do? Have some physical cash as part of a “Just in case scenario”. The cash should be able to cover food and gas for at least a month. This cash should be in addition to your any precious metals you should have.by