The recent collapse of Silicon Valley Bank (SVB) and Signature Bank has shaken the confidence of many depositors and investors in the US banking system. The two banks failed due to a combination of factors, including faltering tech stocks, interest rate hikes by the Federal Reserve, and massive withdrawals by customers who needed cash amid a decline in venture capital funding.
The government has taken extraordinary steps to prevent a systemic crisis, such as guaranteeing all deposits at both banks regardless of size, providing emergency loans to eligible banks and financial institutions, and launching investigations into the causes and consequences of the failures. President Joe Biden has assured that the US banking system is “safe” and that no taxpayer money will be used to bail out SVB or Signature Bank.
However, some experts and consumers are still worried about the possibility of more bank collapses or an economic downturn. They are looking for ways to protect their money and assets in case of a worst-case scenario. Here are some tips on how to keep your money safe when SHTF:
Diversify your portfolio: Don’t put all your eggs in one basket. Invest your money in different assets that have different risks and returns, such as stocks, bonds, real estate, gold, cryptocurrencies, etc. This way, you can reduce your exposure to any single market or sector that may crash or underperform.
Keep some cash on hand: Cash is king when there is a liquidity crunch or a bank run. Having some cash on hand can help you pay for essential expenses or emergencies without relying on ATMs or credit cards that may not work or charge high fees. However, don’t keep too much cash at home as it may lose value due to inflation or theft.
Use FDIC-insured accounts: The Federal Deposit Insurance Corporation (FDIC) insures up to $250,000 per depositor per bank in case of a bank failure. This means that if your bank goes under, you will get your money back up to that limit. However, this does not apply to non-bank financial institutions such as brokerage firms or mutual funds. Therefore, make sure you know where your money is held and whether it is covered by FDIC insurance.
Stay informed and vigilant: The best way to protect your money is to stay informed about what is happening in the economy and the financial markets. Monitor your accounts regularly and check for any suspicious activity or charges. Be wary of scams or frauds that may try to take advantage of your fear or confusion. Seek professional advice if you have any questions or concerns about your financial situation.
Saving currency mode is not a foolproof strategy for avoiding losses or risks during an economic collapse. However, it can help you minimize the impact and prepare for recovery.