I like practice, not theory.
Do you feel the same way? Are you concerned about bank runs, or just simply hate today's banks? Want to practice disintermediation, but still need to make purchases online and pay regular bills? Here is a simple strategy to gain some peace of mind, and at least feel like you are sticking it to the banks, in eight easy steps.
- Do not own CDs, nor use a checking or savings account.
- Do ask your employer if they will deduct and pay regular bills such as a mortgage.
- Do have a credit card, preferably issued by the same bank as your employer.
- Do minimize the monthly bills you pay (utilities) and purchases you make with this credit card.
- Do take your paychecks to your employer's bank and cash them.
- Do take some of your cash and pay off your credit card, entirely and timely, while at the bank.
- Do take other checks you may occasionally receive to the maker's bank and cash them.
- Do keep your cash some place safer than a bank (not hard to do) and invest in tangible assets.
Why can you feel good that the bank does not have your money?
- You have peace of mind even though the ECB cut the reserve requirement to 1% [3].
Think about what the reserve requirement [4] is, and what this means.
- You have peace of mind even though the US banks stopped marking to market [5].
- You have peace of mind even though ZIRP has destroyed any real return associated with having bank accounts...
[7]
I know many people who have closed all bank accounts. Without exception, it has worked well, and provided peace of mind.
