Cash is the best tool for surviving
a deflationary spiral. Because it’s the
only thing that increases in value as
prices decrease. Other assets – gold,
real estate, bonds, and stocks – go
down.
So what are the best ways to pro-
tect your cash? You can’t just stuff it
all in your mattress.
Here is relatively straight
forward way to protect your cash.
FDIC-Insured Bank Accounts
It shouldn’t be much of a surprise
that banks are one of the best ways to
protect your cash. But there are some
nuances you need to understand if
you want to make sure every dollar of
your cash is secure.
During the Great Depression,
there were more than 9,000 bank fail-
ures. From 1930-33, depositors lost
$1.3 billion. That’s about $24 billion
in today’s dollars.
For anyone who had to live
through it, it was the worst night
-
mare. It prompted the government to
create Federal deposit insurance.
The Banking Act of 1933 estab-
lished the Federal Deposit Insurance
Corporation (FDIC). The FDIC insures
deposits under a variety of different
account categories up to $250,000.
So when choosing a bank, make
sure it has FDIC insurance cover
-
age. FDIC-insured banks can be big
or small – credit unions, community
banks, and big global banks can all
fall under the FDIC umbrella
If you were to have $500,000 in saving, I would split it up in to ten
large banks just in case there is a collapse of the system because
the FDIC may consolidate your money into one or two Banks that did
not fail.
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