Friendly reminder that banks are not a reliable place to keep emergency funds, they don't really have a vault full of everyone's cash always available.

▲

Tanoc 13 hours ago | parent | next [-]

Which is the way it's supposed to work. You keep enough for daily transactions, because the expectation of multiple large scale withdrawals happening either in short succession or simultaneously is the most unlikely scenario to happen during operation. A bank keeps records of every account's value, but at any given time only has enough cash to cover one fifth of all of the money it has on record to be in those accounts. In other words, the bank's physically only got 20% of the money it has on the books. It has to work this way because there's no way a bank could hold all of the money it's customers are said to have, either because of physical space constraints or because there's literally not enough money in existence to cut it out of circulation without creating ridiculous deflation. The change away from the gold standard changed this quite a bit, and so has digital banking, but the numbers in your account are still backed by something that tangibly exists.

▲

pdonis 12 hours ago | parent [-]

> the numbers in your account are still backed by something that tangibly exists

Only if you consider fiat money that can be printed in arbitrary amounts by Mr. Bernanke's famous printing press to be "something that tangibly exists".

▲

Tanoc 4 hours ago | parent | next [-]

Well there's also assets. The bank can hold the value of land deeds or house loans for example. The house and the land it's on are tangible things that can be evaluated. Though I suppose that's a degree removed from printed bills or minted coinage.

▲

SR2Z 11 hours ago | parent | prev [-]

Despite that, USD seems to hold its value pretty well. Certainly a lot better than many other "stores of value."

	▲	pdonis 15 minutes ago \| parent [-]
		> USD seems to hold its value pretty well. The Consumer Price Index has inflated by a factor of more than 15 from January 1947 through March 2026 [1]. That's an annual rate of inflation of about 3.45 percent. That's an indication of how the USD does not hold its value--if you have a stock of dollars that you want to hold the same buying power year to year, you have to add 3.45 percent to it every year just to stay even. [1] https://fred.stlouisfed.org/series/CPIAUCSL

▲

eru 14 hours ago | parent | prev | next [-]

Why would that be necessary? For most people, liquid funds are something that's electronic anyway, and in most countries banks can't run out of customers' electronic money. (Safeguards kick in pretty quickly.)

Most of the talk in this discussion is about personal emergencies, like being locked out of your accounts; not about system-wide bank collapses.

▲

mothballed 13 hours ago | parent [-]

You can be locked out of all your accounts simultaneously by a court order, for one.

There is no one reliable place. You must hedge with diverse custodial and non custodial forms of store of value for best assurance.

	▲	eru 6 hours ago \| parent [-]
		Hedging with friends and families is probably a good idea.

▲

gucci-on-fleek 14 hours ago | parent | prev | next [-]

> they don't really have a vault full of everyone's cash always available.

When the Silicon Valley Bank collapsed, funds were only inaccessible for 72 hours, and no depositors lost any money [0]. Which is still not ideal, but most people will never experience a bank collapse, and there are plenty of banking activities that will take longer than 72 hours to process in regular circumstances anyways.

[0]: https://en.wikipedia.org/wiki/Collapse_of_Silicon_Valley_Ban...

▲

vitus 14 hours ago | parent | next [-]

Indeed; most personal banking customers can fall back on FDIC insurance ($250k should be more than enough to cover your emergency fund). This isn't the 1920s.

▲

eru 13 hours ago | parent | next [-]

Alas, for Silicon Valley Bank they went with 'too big to fail' and also covered uninsured deposits. That's moral hazard and endangers the core purpose of the insurance.

▲

vitus 13 hours ago | parent [-]

Agreed. That said, FDIC would have not been able to cover all $150 billion or so of uninsured SVB deposits directly from the insurance fund, so had that been the only available option for making depositors whole, then FDIC would have had to pass.

	▲	eru 6 hours ago \| parent [-]
		Well, insurance should only covered insured deposits. > [...] so had that been the only available option for making depositors whole, [...] On paper, FDIC might be independent and have its own balance sheets. But in practice and given politics, FDIC itself can't fail / isn't allowed to fail. It'll always be bailed out, and that's what the market expects. For the stability of the economy, it would have been better not to make uninsured depositors whole.

▲

Teever 13 hours ago | parent | prev [-]

It sure isn’t the 1920s, it’s the 2020s so things like digital money are ephemeral and whimsical.

The bigger question is how much food and medicine is there in the supply chain buffers? If all production was to stop immediately — how many calories are on the continent? How many grams of insulin or penicillin?

In a crisis how will those things be distributed? Will it be based on immediate need or social class?

What’s keeping the system going anyways? Why do ships continue to come with consumer goods from China? Why do farmers send their grain to market?

It’s kind of neat to think about what will happen in this sort of scenario. I wonder how long the data centres will keep running, churning out models that don’t have a market an aren’t quite good enough for AGI.

▲

s5300 13 hours ago | parent | prev [-]

[dead]

▲

the__alchemist 14 hours ago | parent | prev [-]

What do you recommend instead?

▲

dullcrisp 14 hours ago | parent [-]

Mayonnaise jar buried in the backyard.

	▲	the__alchemist an hour ago \| parent [-]
		Do I have to clean out the mayo first? I am wondering if it will fester, or if most of the smelly decomposing microbes are aerobic? Are we talking paper money? A bitcoin wallet? Trump dollar coins?