Silicon Valley Bank, Has it caused rethink regards your cash stash at home

No. Always keep 3-4 months cash on hand. You won’t retire early on this amount sitting anywhere else and if SHTF (EMP for example) you won’t be for worse with legal tender in your possession

quote:

---

What exactly happened to cause this failure? Need more specific than esg explanation.

---

The bet very heavily on longer term treasuries. Yield curve inverted and they lost a lot.

quote:

---

Should folks keep a weeks expense in cash and use credit cards in the event of being cut off? Is a months worth of cash appropriate?

---

People should always have some savings and an emergency credit card.

As far as sticking cash in the mattress / safe? The deposits are insured up to 250K which is PLENTY for the vast, vast majority of people. The FDIC makes insured deposits available by the next banking day.

If banks fail, cash won't last long.

It will ove to crypto or bargaining.

Cash is worthless.

Banks have to diversify and hold bonds…
A percentage of their assets

Bond yields were very low past few years or paid above par vale for one’s with decent yields.. 2ish yields..

Feds raised interest to normal rates after holding them low for so long buying votes.


So new bond yields are 4 plus for safe ones…

All those bonds SVP had from past lost value.. their clients got scared.. wanted their money..

They had to sell the bonds ( assets they have to have)… at a loss ..to give people their money… more people got scared.. sell more bonds etc..

Anyone with 250 k is fine but they were holding millions of dollars of tech companies money who needed it since their stock value is down 50 percent or more…

Individual holding bonds do not have to sell and can just keep their bonds till they mature and get paid back at par value from the company…

quote:

---

The FDIC would be totally incapable of handling a nationwide run on banks.

---

That’s not the purpose of the FDIC. The FDIC is not supposed to come up with ready cash to prevent a run from causing a bank to default on withdrawals. The FDIC is just supposed to insure your account. If you have $100k in a bank that gets run, and you can’t get your money out, the FDIC will make good on it - but not immediately.

quote:

---

Silicon Valley Bank, Has it caused rethink regards your cash stash at home

---

Not really. I'm not sure what my cash would be worth if banks collapsed.

They’ll get bailed out.

quote:

---

Unless you have more than 250k in cash at a single bank, it makes little sense.

---

Wrong. Things have changed drastically since the 2007 - 2008 financial crisis. Banks can convert their debt into equity to increase their capital requirements. The Dodd-Frank Act gives banks the right to confiscate deposits in excess of the $250,000 protection provided by the Federal Deposit Insurance Corporation and use them as needed. Retirees who receive a pension are subject to this confiscation of funds as well. As a pension-receiving retiree depending on checking and savings account funds, you could find yourself in a vulnerable position.

Also, banks are authorized to cease operations and control withdrawals.

The FDIC has billions of dollars to insure trillions in deposits. Just like any other insurance claim, you will be dealing with an adjuster regarding how much and when you will receive your insured deposits.

There are going to be a lot of surprised and pissed off citizens who are going to learn abut the changes the hard way. They will be saying "how could this happen in America." You ain't seen nothing yet.