Finger on the Button; Hand on the Switch

As you may have guessed, I am in many conversations everyday about finance and economics.  The most frequent question I get is, "what should I do?".   My answer is the same-- You can start by having 3 months of your financial needs in cash.

They reply, "So what, everyone on TV and every financial adviser says you need to have 3 months of expenses as an emergency fund-- tell me something I don't know".   And then I say, "you need to have these 3 months of expenses in cash in your house or some other safe, accessible place."  "Do you?"  Almost everyone says no.

Today, I offer you food for thought by looking at google search frequency.  Don't have your head in the sand.

Source: Google Trends

In case you can't read the graph, in August of 2008, before the big crash and "Lehman Weekend", the number of people searching on the term "bank run" reached its peak. Today, the number of people searching the term "bank run" has set a new peak!

Two things you need to be aware of if you are a US resident (I am unfamiliar with the laws of other countries):

(1) The Frank/Dodd Financial Regulation bill didn't regulate as much as it gave financial institutions the authority to freeze the accounts of their customers if the board of the bank felt that the institution was threatened due to a bank run. Before this law, banks could not legally freeze money market accounts. Now they can and they don't need permission to do so- only probable cause.

(2) National defense related legislation gave the president of the US authority to shut down all or portions of the Internet in the interests of national security.

That means, all it takes is a press of a button and it doesn't matter how much money you have--- if you don't have it in your hand--- it is worthless.

Fore-warned is Fore-armed.