Originally posted by prepare4it777
Or will it be a moot point? Is the value of the dollar going to be useless or meaningless? Does the banker holiday mean that basically all of your
money will be absolutely useless or will your cash have value still? Sorry I'm still learning a lot and trying to understand. Thank you
A Bank Holiday is quite simply just a holiday when banks are closed in the former British Empire (UK, Canada, Australia, ect.) We have them all the
time, in the United States they are called Federal Holidays. It is absolutely nothing to fear. It just means that the banks, some other commercial and
selected non-essential government offices (post offices, DMVs, ect) are closed for the day, and will be open again the next business day. The next
major holiday in the UK is the Summer Bank Holiday in August, where you get a nice three-day weekend, and in the United States is Labor Day, where you
get the same.
Take a look here:
Now if you are referring to the Emergency Banking Act of 1933, as the "Bank Holiday", well I see no reason to fear that either for two reasons:
First off, instead of declaring a mass 4-day bank audit as the United States did in 1933, the US government has decided to do rolling solvency checks,
they are deeper and are being done over a longer period of time without interrupting the banking system for consumer or commercial interests. You've
probably seen this in the news it was commonly called the "Stress-Test" and concluded in May.
You can see an article on the results here, they were quite encouraging really:
The second reason that you have nothing to fear is that should any massive audit such as that in 1933 take place again, your funds are still insured
by the FDIC. As long as you are below the $250,000 limit your money is safe, secure and not going anywhere.
You can see an explanation of how FDIC insurance works and how much coverage is offered here:
Finally, because of things like FDIC insurance, removing your money from banks and getting it in hard currency actually doesn't really do anything
today except make you a target for robbery as you would be carrying large sums of cash to make expensive purchases. You also actually loose money by
having hard currency because you're not gaining any interest on it either. Now if you are worried about the inflation rate of the US Dollar, and
wanted to pull your money out to purchase metals, foreign currency or some other investment product that is a different story, and something you
should take up with your financial adviser.
Here's a good link on what mass bank runs actually do:
To make a long story short, if you're keeping your cash just as cash, there's no reason to worry about leaving it in a bank. The United States
Government, which are the ones that ascribe value to our fiat currency anyways, back your deposits up to $250,000 though the FDIC, and after the
"Stress-Test" we've found that most of the banking system is quite solvent enough to weather the recession.
So on your next Bank Holiday, go and enjoy yourself! A little relaxation in stressful times is always good for you.