Cash or Credit?

[AngryVanMan]

Cyprus suffered what is known as a "bail-in" vs. the bail outs like we had in the US during the Great Recession.  You can see more details here.  Basically, Cyprus was a large offshore banking provider, held bad debts and tax-sheltered money for offshore companies and oligarchs, and it became a problem during the global recession.  The oligarchs and corps fled with their money after working with the Cypriot government to engineer a banking holiday, where Cypriot citizens' banking assets were frozen and used to pay off the private bad debt by shifting it onto the public.  It is the same as any austerity measure where the public bears the burden of private market gambling or corruption.  Major withdrawal restrictions were imposed on the citizens to recapitalize the banks after the banking holiday was lifted.

Similar measures are being undertaken in EU countries in the form of negative interest rate policy (NIRP) on central bank holdings.  This is slightly different, but the desired effect is to spur investment and spending while providing a  disincentive for savings (or "hoarding" in doublespeak terms.)  Once NIRP trickles down to the consumer level, the interest you earn on your personal savings will be negative, i.e. a fee to save money in a bank.  Central banks are trying to determine what to do about the "cash problem" now as cash holding would interfere with NIRP effectiveness, and they propose to solve the problem by banning or severely restricting cash and cash purchases.  Austria, Denmark, Germany, the Netherlands and Switzerland are all in negative interest rate territory today.

NIRP is being explored as an option by the US Federal Reserve right now, they have added NIRP to their large bank stress testing to see how large banks would react under that type of regulation.  Personally, I would consider it the writing on the wall.  Cash is king, but he's looking to be overthrown.  I recommend gettin' while the  gettin' is good...

A secondary effect of limiting cash transactions is to functionally reduce or eliminate the financial privacy of a countries citizens.

 

[Canine]

Geez. I give up! lol I flunked out of accounting in college and this is a stark reminder of that.

 

[ramblingvanman]

When did the Swiss go to negative interest rates? I missed that.
Cypriot account holders had part of their money taken to bailout the banks who were acting improperly. Recent court rulings here in the US have affirmed that YOUR deposits are actually property of the institutions in which they are deposited. Additionally ex-fed chairman Bernanke has said that "haircuts" or bail-ins such as happened in Cyprus are not beyond the realm of possibility here in the USA.

 

[AngryVanMan]

I believe Switzerland issued negative yields early last year, at or near the same time they removed the Euro currency peg which made world news at the time. I didn't want to get too far into the bushes with the currency manipulation stuff, but I think if it belongs anywhere it's in a cash or credit thread, very important to consider how you make your purchases and what kind of savings you wish to keep close at hand.

 

[Konaexpress]

I think Japan just did it too. Rumors in the banking industry here is that we are thinking about it too.

John

 

[ramblingvanman]

Edited. My bad, Japan had a negative savings rate not a negative interest rate. Old people should not trust our memories for facts LOL
I am really surprised to hear about the Swiss going negative though.
The "federal"(what a joke) "reserve"(an even worse joke) has also made noises about adopting a negative rate here recently.

 

[Patd4u2]

I use my credit card for everything, and pay it off on the first of the month. If there is anything fishy on a transaction I can dispute it and not have my money tied up while they investigate like a debit card, they reimburse you immediately.
Plus my credit card gives me ultimate rewards points that I can use on Amazon or other places, I almost have enough to buy the solar battery that I want on Amazon with just the points. I purchased a roof top tent on Amazon with the points that I accumulated before.
So if your careful how you use it a credit card can be beneficial.

 

[gojo]

Wife and I do the same, end of the month write 2 or 3 checks. Save on the check drafts, they're getting expensive too.
We have three credit cards and we get bonuses to where you can borrow the max and get interest free for 12 to 18 months. We only borrow to what we can pay back in that period of time or carry over to another card. I bought a truck once doing that ($12,000.), when ones limits about over, we'll borrow from another credit cards promotion, interest free.
 That better than regular banks.

 

[Mobilesport]

Except for computer hacking, I think the only times my card info has been stolen is from stop-n-robs now that I think of it.

John

What's a stop n rob?

 

[highdesertranger]

stop n rob, is street slang for Stop-n-Go convenience stores. are they even still around? I haven't seen one in years. highdesertranger

 

[Canine]

stop n rob,  is street slang for Stop-n-Go convenience stores.  are they even still around?   I haven't seen one in years.   highdesertranger

We have Kum & Go. It sounds naughty to me, though. Never cared for the name. Never heard of Stop-n-Go.

 

[Patd4u2]

When did the Swiss go to negative interest rates? I missed that.
Cypriot account holders had part of their money taken to bailout the banks who were acting improperly. Recent court rulings here in the US have affirmed that YOUR deposits are actually property of the institutions in which they are deposited. Additionally ex-fed chairman Bernanke has said that "haircuts" or bail-ins such as happened in Cyprus are not beyond the realm of possibility here in the USA.

The banks were not acting improperly, Like you stated "the US courts reaffirmed that you deposits are the property of the banks", the banks can and do what ever they want with your money because you handed ownership of your money to the bank when you deposited it and the banks can do what ever they want with it, including loosing it all in risky investments, The FDIC will insure up to something like $250,000, after that you lost what ever is left, it is all rigged in the banks favor and there is nothing you can do about it. This came about from the British banking system from around 1850's and we use the same system. It is in all the small print that nobody reads when they open a bank account, most people are more interested in the toaster that they are getting as a gift.

 

[Spirituallifetime]

The banks were not acting improperly, Like you stated "the US courts reaffirmed that you deposits are the property of the banks", the banks can and do what ever they want with your money because you handed ownership of your money to the bank when you deposited it and the banks can do what ever they want with it, including loosing it all in risky investments, The FDIC will insure up to something like $250,000, after that you lost what ever is left, it is all rigged in the banks favor and there is nothing you can do about it.  This came about from the British banking system from around 1850's and we use the same system. It is in all the small print that nobody reads when they open a bank account, most people are more interested in the toaster that they are getting as a gift.

What toaster I dIdn't my toaster! 
Credit it's just another bill I have to keep track of and pay!

 

[Konaexpress]

We have Kum & Go. It sounds naughty to me, though. Never cared for the name. Never heard of Stop-n-Go.

Sorry about that. I guess this is just a local saying..... The intent is for any small gas station that is also a small convenient store. Some place easy to rob and run.

John

 

[Patd4u2]

What toaster I dIdn't my toaster! 
Credit it's just another bill I have to keep track of and pay!

Lol...great answer. I needed a good laugh before I went to bed...

 

[ccbreder]

If you keep more than 250K in a bank account, you don't need the rest. Your deposits belong to you. You. You pay tax on the interest. If the bank fails, you are insured on your money. (up to limit per account). What happens in Greece or some other rock in the Mediterranean, is not the USA.

 

[Konaexpress]

If TSHTF, then you will be trying to collect your 250k along with millions of other people. So it's just another form of Greece.

John

 

[Patd4u2]

If you keep more than 250K in a bank account, you don't need the rest. Your deposits belong to you. You. You pay tax on the interest. If the bank fails, you are insured on your money. (up to limit per account). What happens in Greece or some other rock in the Mediterranean, is not the USA.

If I were you I would do some research on our banking system before making comments on who owns the money you deposit into your bank account.

 

[Konaexpress]

If I were you I would do some research on our banking system before making comments on who owns the money you deposit into your bank account.

I know dang good and well who owns the money in the banks, not me. That's why I put as little as possible in them. One of my best friends is married to a BIG banker for big banks. Most of their money is off shore. I know what the banksters think is comin.

I think you misunderstood me, I agree with you for the most part. If I were you, I would go re read my posts.

John

 

[Patd4u2]

I know dang good and well who owns the money in the banks, not me. That's why I put as little as possible in them. One of my best friends is married to a BIG banker for big banks. Most of their money is off shore. I know what the banksters think is comin.

I think you misunderstood me, I agree with you for the most part. If I were you, I would go re read my posts.

John

My comment was to CCbreader, I think you must have thought it was for you, I read your comments and I know you know what is going on and what is about to happen, and I agree with you.