Can we have a thread about what the hell to do right now?
🗣️ DISCUSSION 💬
First of all, I'm an idiot when it comes to anything financial. I know many of you aren't. What is the safest thing to do with the money (fiat) that we do have right now? Leave it in our local bank? Credit union? Keep it as cash in my sock drawer? Also, the money in my 401k? Switch it over to bonds or something else I don't fully understand? Any thoughts from someone who's been paying better attention to these things than I?
If you dont make your mortgage payment or car payment, your loans go into default.
This would also happen under "normal" times.
If you default on your loan(s), you lose the asset(s).
Edit. Even if the bank you have your loan with crashes, the loan is sold as an asset to another bank. The loan has value. YOU however, still need to make the payments.
Dee, as I have been reading through these comments, it seems you have a pretty good background in finance. Glad to read your comments and thoughts. Thanks.
But if the reason I wouldn’t make my mortgage payment is because my money stored in said bank is gone, how can it be my fault it defaulted?
You took out the loan. You need to make the payment.
It is no different than if you had all your money in your sock drawer and somebody broke in and stole it.
The entity holding the loan doesn't care. They just want your payment.
This is why I stated that debt will be a killer.
I'm sorry. I don't mean to come across as flippant about this.
I think that the way our economy has been running as a debt economy we are poised for a massive awaking.
Yeah. Lots of people won’t understand this. If the bank you owe money to, loses your life’s savings and says hey, you still owe us money borrowed against your farm and takes the farm, I think there’d be violence.
Yes. Expect that as part of the bank being liquidated it would be obfuscated.
Let's say you bank (savings and mortgage) at Happy Bank and it goes down.
Happy Bank gets liquidated. All assets are sold off.
You get a letter from Sad Bank stating that they now own your mortgage (which they bought from Happy Bank liquidation).
Sad Bank now holds and services the loan as Happy Bank no longer exists.
There is nothing left to bear the brunt of the anger.
This is assuming that FDIC protections fail. SVB depositors only had 250K protected by FDIC, but now the gov't will protect the depositors at 100%. Depositors who had millions deposited. It's off the rails.