Time to Move Banks?

My guess is that you’ve heard about the recent banking troubles. It’s been forefront of my mind for a week. As a prepper, I’m (slightly) less concerned about an entire banking collapse right now than I am about a specific collapse of my bank, which got me to thinking: maybe I should move banks?

For what it’s worth, I bank with BofA, one of the big four “too big to fail” banks, so maybe my current concern is unwarranted since they’re backed by the full faith and credit of the U.S. government. After all, my deposits are FDIC insured, and if they’re too big to fail, what have I got to worry about? 🙂

But that’s not how preppers operate.

What I hadn’t prepared for was a collapse of my bank specifically, which is, after all, the more likely financial disaster than the entire banking system collapsing. As such, it would be wise of me to have a second checking account with another institution, right?

And I’ve been looking into other options, but I’m having a “paralysis by analysis” moment. I really wanted to get away from the largest banks, so I looked into credit unions, but many appear to be swamped with their own poor decisions, such as bad auto loans, so that’s a no-go. I then looked into online-only banks, but most either get horrible customer reviews or may be in even worse financial shape than SVB! That’s no good either. Regrettably, it seems I’m stuck with using another of the “too big to fail” banks. Right now, I’m only pulling out more cash.

What about getting out of the banks completely? Sure, I’ve got some cash stashed and precious metals, but I just don’t see this as being a truly viable option for anything other than purchasing items that I should already have plenty of, such as food and toilet paper.

But then I’d find it rather difficult to pay my mortgage or utilities with cash, gold or silver, which brings me to another financial/prepping recommendation that’s bothered me for a long time: Have enough money at home to pay your bills for a few months or even longer. The idea is that I would then be able to pay my mortgage, utilities, phone bill, and so on with what I have stashed around the house should my bank collapse or my accounts get frozen because I haven’t been a good boy.

But I just don’t see how that’s possible any longer since every bill we have is paid online, via bill pay through our bank account or credit card. The only viable solution I see if my bank collapses is that it may be possible to continue to pay our bills with a second checking account, albeit with a lot of trouble upfront. If everything collapses, on the other hand, then what’s the point in having cash or metals stashed?

Truth be told, I’m not even sure where I should send a payment to for any of my creditors, and I’m surely not going to send cash or gold in the mail, lol. So, what then? Do I drive it to their offices, assuming they’re even close enough to do so? Probably not. I think the truth is that I wouldn’t be able to pay any of my bills until things get straightened out, and if I’m being honest, I wouldn’t mind.

Personally, I’d suggest that if it comes to a point where a “too big to fail” bank collapses or the entire system collapses, then it would have ripple effects unlike any we’ve seen. But I’m no financial expert, so my fears could be overblown.

Let’s think about a more likely problem for a moment. What happens if BofA collapses tomorrow, besides me being super pissed because they have most of my ever-dwindling and inflation-cursed dollars? Well, if it’s just BofA and the Fed steps in with a ridiculous bailout (or, worse, a bail-in), then society may not be totally screwed. Most Americans may still be able to buy groceries and gasoline. But if the Fed doesn’t step in for some odd reason, or the entire banking system goes south due to an uncontrollable ripple effect, then I foresee a SHTF scenario that could last months. Worse, it’ll have everyone, including your grandmother, clamoring for a CBDC like Pavlov’s dog’s drool for food.

In the meantime, however, I don’t see much of anything useful functioning, including the grocery stores, gas stations, Walmart (Heaven-forbid), or any retail merchant; Amazon may even crash…yikes! Why? Well, how are they going to process payments? Most of us pay with debit or credit cards which we can assume won’t be able to be processed if banks are down. Checks shouldn’t work either for similar reasons. That leaves cash.

But I have a few questions about paying with cash:

• Will a retail merchant be able–or willing–to sell goods if their payment processes aren’t functional, even if you have cash to pay? Some may, but they may be the exception because most major retailers simply MUST do things a certain way no matter what.
• What if I give the cashier a twenty dollar bill for something that cost me eighteen dollars yet they can’t give me change because the cash register is too modern or they’re simply out of bills to make change? Will they sell me what I wanted?
• How long will these establishments even stay open after such a SHTF scenario? I can’t see employees sticking around if they (1) think they might not be getting paid because of the banking troubles or (2) fear for their safety when the hordes just decide to loot everything anyway.

Using precious metals is an even bigger problem, in my opinion. Sure, at some point people will realize that gold and silver are the only truly valuable currency, but how long will it take for society to get there? Months? Years? And what if our government continues to never allow their use? I mean, you don’t want to be breaking the law by using it anyway, do you? 🙁

I won’t get into Bitcoin or barter in this post, as each have their pros and cons, but suffice it to say that neither will be a viable solution anytime soon.

Ultimately, there’s little harm in having some cash and metals stashed for hard times, and I’d say it’s wise to have another checking account with enough money to pay your bills for a month, but I simply don’t see either as being the “be all, end all” solution to our banking troubles, even on a personal level.

And please don’t assume that just because you have tens of thousands of dollars buried in the backyard or gold coins stacked to the rafters that they’ll save you either. Have food, water, toilet paper, medications, tools… you name it or else you may be just as screwed as everyone who failed to prepare while they still had a chance.