Emergency Savings Alternative

FatherAbraham wrote: »

I'm sure that you know very well that in neither Greece nor Cyprus was it hard to buy good in shops during the bank shutterings as long as one had cash to pay for food.

There are completely different infrastructures and customs in how retailers operate in Greece compared to the UK. You cannot expect the same to occur here.

FatherAbraham wrote: »

It's clear that there's a finite chance of all the banks being closed in a financial crisis: it happens occasionally, and apparently unpredictably (otherwise it wouldn't catch so many people out).

An infinitessimally small one, not least as a result of ring-fencing, and as I pointed out, if it were to happen, then having some banknotes and coins would not make up for the ensuing chaos. Having some food in your freezer and cupboards would, however, provide short term protection.

Furthermore, the chance of all the banks and credit card providers going bust at the same time would have required an unprecedented global financial meltdown. It is more likely, although still extremely unlikely, that some of these banks in your near-apocalyptic scenario, would have perfectly sound balance sheets, but be suffering from a liquidity issue, and this is where the Bank of England steps in with liquidity insurance.

FatherAbraham wrote: »

It's clear that there's a rather larger chance of one's favoured bank being unable to meet depositors' demands for withdrawals. We've seen it happen to Northern Rock.

I did say that having more than one account, each with a different bank, or using credit cards from different providers was insurance against this. You've also ignored the fact that banking regulations have changed since the run on Northern Rock. Ring-fencing has stopped banks from using assets in their retail banking for investment banking. The risk of a similar issue to Northern Rock occurring again has, therefore, been significantly reduced.

FatherAbraham wrote: »

To a more limited degree, it's happened when UK banks have suffered IT systems outages.[

This is not even vaguely the same as a bank collapsing. Those banks are still trading and access to funds is still available through branches and ATMs, and normally via telephone banking too.

FatherAbraham wrote: »

It is prudent to insure against these risks by holding some cash.

Hey, if you want to do that then so be it, but it isn't really necessary.

FatherAbraham wrote: »

Your talking about buying guns implies a much more unlikely state of affairs: that the national state itself breaks down. Confusing that risk with the likelihood of interruptions in the payments and banking system is probably not helpful.

I was making the point that you are on the verge of adopting a survivalist mindset.

If you think that the complete collapse of the banking system would not result in serious outbreaks of lawlessness and disorder then you are in for a shock should it ever happen.

FatherAbraham wrote: »

Warmest regards,
FA

Still disingenuous.

RG2015 wrote: »

FatherAbraham always uses this in their signature so it is not directed to anyone in particular.

Some people may infer more into it but I see it as merely being polite.

That would be fine if they hadn't been condescending and trying to score points in the same post.