{"id":3503,"date":"2017-10-16T23:09:48","date_gmt":"2017-10-17T03:09:48","guid":{"rendered":"https:\/\/howigrowmywealth.com\/?p=3503"},"modified":"2017-10-16T23:25:04","modified_gmt":"2017-10-17T03:25:04","slug":"puerto-rico-shows-importance-cash","status":"publish","type":"post","link":"https:\/\/howigrowmywealth.com\/puerto-rico-shows-importance-cash\/","title":{"rendered":"Puerto Rico Shows the Importance of Cash"},"content":{"rendered":"
\u201cWith Widespread Power Failures, Puerto Rico is Cash Only\u201d reads the title of a recent New York Times article in the wake of Hurricane Maria. This tragedy in the “Rich Port” is a sad reminder of the importance of keeping some emergency funds in physical cash.<\/p>\n
The horrible devastation in this Caribbean territory of the Unites States is another reminder why keeping a few months worth of expenses in cash is a great idea.<\/p>\n
It\u2019s also a reminder to the anti-cash types that even in parts of the United States, power restoration can take weeks or months and a society without some cash is economically more vulnerable. This isn\u2019t some abstract problem<\/a>. It has a face, the face of people waiting in line, not being sure if they\u2019ll be able to buy food or gas because they can\u2019t access their bank account or use their debit card.<\/p>\n If there is a power outage I\u2019m not going to want to spend my gold (the average cashier at the quick mart would probably stare at me dumbly even if I tried), I\u2019m not going to be able to use a credit card, Goldmoney or bitcoin\u2014I need cash.<\/p>\n If you think you\u2019re going to be able to wait for a disaster and then go to an ATM at the same time as everyone else then at best you\u2019re going to be faced with a long line. At worst the ATM won\u2019t work or will be out of cash. Banks will have long lines and they could start imposing withdrawal limits to ration the cash they have available.<\/p>\n This isn\u2019t my theory or some doomsday scenario, this is what happened<\/a> (and is still happening as I write this) in Puerto Rico.<\/p>\n If people held a few months of expenses in cash then they would be in a better position to buy food, fuel, and start repairing their homes and businesses.<\/p>\n I\u2019m as bearish on US dollars and fiat money<\/a> as anyone. So of course holding cash has downsides: Here are the main ones:<\/p>\n 1) It loses value<\/p>\n The dollar has lost most of it\u2019s value since 1913<\/a>. So the wealth you have in cash will be inflated away as central banks inflate the money supply.<\/p>\n 2) Theft<\/p>\n Carrying around a lot of cash is generally considered risky and not without reason. Looting and a general increase in crime is an unfortunate reality in the wake of disasters. There is also the problem of civil asset forfeiture<\/a>. In the United States, the “freest country in the world,” if members of the law enforcement community suspect you of a crime, they have the means to simply take your money and\/or other property and it will be up to you to sue the government and prove you\u2019re not guilty and get your property back.<\/p>\n Civil asset forfeiture in the US is a black and white violation of the 4th amendment, but it happens all across the US and in 2014 more property was taken from US citizens by members of the law enforcement community than was taken by burglars<\/a>. But I digress.Of Course There are Downsides to Cash<\/h1>\n
\nThese Risks can be Mitigated<\/H1><\/p>\n