Banks, Mattresses and Gold Trinkets

Alan Simpson

For the past year many thousands have asked the question, by email or at conferences, "Should I take my money out of the Bank, come December 31^st, 1999."

These are the same people who are afraid of a run on the Banks.

Now, at first sight it is in everyone’s interest to calm the fears of the public. Why would anyone want to take their money out of a Federally Insured deposit account, and stuff it under their mattress? The obvious is that if everyone left their cash in an insured bank, there would be no run on the bank, and the problem would go away.

On further digging the scenario gets even more crazy, for the average uncommitted monthly deposit in the USA is around $300, with most families living from paycheck to paycheck. It is hardly a choice of the average consumer, to use all December’s cash to pay bills, or stack it in neat piles, on the kitchen table. This fear of losing everything is very close in most people’s heart. For the smooth-talking, commissioned salesman, the vision of the Depression era makes a good tool for elevating the crisis to a higher more profitable level.

Many are being duped into converting cash into Gold, or other precious metals, either as bullion or coin. The reference to old movie newsreels showing New Yorker’s lining up at soup kitchens, singing "Buddy can you spare a dime", is enough to scare little old ladies to part with their, or their husbands, hard earned savings.

Yet the fact is the only money that is at risk, is the speculative investments, such as on the Stock Exchange. If you have $10,000 in the bank, with present pitiful interest rates, you will still have $10,000 in the bank after the New Year celebrations have all been forgotten. Unless you invested in Texas Banks, or Savings and Loans your cash has been protected for many years, through even worse economic times.

We must not be suckered into thinking that speculating on the Stock Exchange, either in stocks, or precious metals, or coins, is anything other than a sophisticated gamble. The recent killings in Atlanta vividly brought home the consequences of speculating. What goes rapidly up, also comes sliding down.

In the worst case scenario, computers will fail, on 1/1/2000, and not recognize dates, or do arithmetic. This is highly unlikely, but if it did, rest assured the money-lenders of this world would immediately jam a nail into the fusebox, and keep the computers stuck in a time-warp of 12/31/99 until they had found a way of fixing the problem. When it comes to making money, no couple of digits in a machine will be allowed to get in the way!

So fasten your seat belt, keep your money where it is safe and enjoy the ride. You will not lose money, but you will enjoy many leaders of government and industry explaining why they did not fix the problem in time, and many doomsayers explaining why the world as we know it has not come to an end!

(This paper was chosen by the US Government for it's ITPolicy site on GSA.gov site)