View Full Version : Dad's rant on the economy
My Dad is a 78 yr old retired history teacher. He's also a self-proclaimed expert on used vehicles.
So I go by his house this evening to ask him to go check out a couple of pickups we're looking at for my soon-to-be 16 yr old son.
It was like a sudden eruption of doom and gloom! Head for the hills! Get your $ outta the bank and stuff it in a mattress!
Just the other day Dad was bragging about not watching the news. But he watched something today talking about panic on Wall St/Main St... and decided to follow suit.
He and mom are planning on taking all their money out of cds and putting it in safety deposit boxes. Dad was literally wild-eyed as he was telling me his plans. I told him he ought to at least talk to my bank pres bro in law. Nope!What does he know!?
I asked him if one man's panic is another man's wisdom... he didn't get the irony, just carried on about 1929 all over again. Honestly, I've never seen him like this.
btw, he told me not to buy anything...:rolleyes:
tommieharris91
3/3/2009, 01:27 AM
Froze really needs to see this post. All I know that you really need to convince your dad that the FDIC insures deposits depending on how much money he has in the bank.
tommieharris91
3/3/2009, 01:55 AM
are CDs FDIC insured?
Unlike other investments, CDs feature federal deposit insurance up to $250,000.
http://www.fdic.gov/deposit/deposits/certificate/index.html
sooner KB
3/3/2009, 01:56 AM
are CDs FDIC insured?
Yes.
Wasp, do you know how much money your dad stands to lose by pulling out his CDs?
Crucifax Autumn
3/3/2009, 03:00 AM
You know...
The real issue here is what does it matter where your money is if the doomsayers are right????
If a head of lettuce ends up costing $97.23 does it really matter where we stash our cash?
OU4LIFE
3/3/2009, 08:59 AM
You know...
The real issue here is what does it matter where your money is if the doomsayers are right????
If a head of lettuce ends up costing $97.23 does it really matter where we stash our cash?
Pardon me, I need to go plant some lettuce.
brb
8timechamps
3/3/2009, 09:12 AM
Many people don't realize that other types of investments are insured by the government as well.
Most (if not all reputable) broker/dealers client account's are insured by SPIC. The SPIC will reimburse investors up to $500,000. The SIPC will only reimburse investors in the event of broker/dealer insolvency.
Of course, it will not cover any loses due to market activity, fraud, or any other cause of loss other than the bankruptcy.
Hey, using the FDIC argument with Dad was like talking to my cat... he was carrying on about 1929 and I reminded him the FDIC didn't exist back then; he didn't have anything to worry about. He immediately said something like "And the government is the one insuring FDIC!!"
This is how obtuse he was: I said at least put your money in a savings acct... to which he responded "You know how little interest your money gets in a savings acct!?"
I told him it would be more than putting it into a safety deposit box. No matter to him, at least he could get it out.
Like I said, it was like talking to my cat...
8timechamps
3/3/2009, 09:36 AM
ouwasp,
I hear ya! It's got a lot (all) to do with that generation. My sweet little (loaded) grandmother took all of her money out of the bank and put it in safety deposit boxes just before my grandfather died (2004).
At the time, I was a financial advisor, and tried to get her to understand reality. She never bought in.
She too lived through the depression.
I can't say that I blame them. Had I lived through that horror, I'd probably feel the same way.
Doesn't make it any less frustrating though.
walkoffsooner
3/3/2009, 09:42 AM
Was his advise on the trucks any good?
OU4LIFE
3/3/2009, 09:43 AM
She too lived through the depression.
I can't say that I blame them. Had I lived through that horror, I'd probably feel the same way.
Buckle-up, buttercup.
really though, how good is the guarantee by the government at this point.
are they just going to print money if your bank craters?
seems like increasing the limits was just too inspire more confidence. i don't think they could actually cover anything if there was a run on banks again right now
8timechamps
3/3/2009, 09:52 AM
really though, how good is the guarantee by the government at this point.
are they just going to print money if your bank craters?
Dude...they already are.
8timechamps
3/3/2009, 09:54 AM
Buckle-up, buttercup.
Until I'm standing in a soup line wearing an overcoat and fedora, I refuse to believe we're back in '29!
AggieTool
3/3/2009, 09:58 AM
He's also a self-proclaimed expert on used vehicles.
Lolz!:D
The world is full of "self-proclaimed" experts isn't it?:O
85Sooner
3/3/2009, 10:41 AM
ouwasp,
I hear ya! It's got a lot (all) to do with that generation. My sweet little (loaded) grandmother took all of her money out of the bank and put it in safety deposit boxes just before my grandfather died (2004).
At the time, I was a financial advisor, and tried to get her to understand reality. She never bought in.
She too lived through the depression.
I can't say that I blame them. Had I lived through that horror, I'd probably feel the same way.
Doesn't make it any less frustrating though.
WE better hope that their experience does not become our reality. I never question the actions of someones whos been there.
XingTheRubicon
3/3/2009, 10:51 AM
1. We didn't have FDIC insurance in 1929.
2. The US Government has never defaulted on a bond in 230 years of existence.
OklahomaTuba
3/3/2009, 10:56 AM
You know its bad when Jim Cramer advises buying guns, gold and canned food instead of stocks on his show.
Seriously, gotta stay positive, even if the Big O is doing everything he can to make this worse.
Was his advise on the trucks any good?
not much; he said not to buy anything.... after he cooled off from his rant a bit he did say to wait a month or so; the prices would be even better then.
He really is good at dealing with those salesmen. I don't care for it myself... the last couple of cars I bought w/o consulting him (his health has been shaky, didn't want to bother him). I think it kinda hurt his feelings, so I made a point of asking him this time.
Oh well... I've asked him. Now I can buy what I want. Sometimes I feel like such a kid. (45)
I suppose everyone has to worry about something. We had a similar issue in our own family a few years back.
Perhaps instead of trying alleviate his governmental worries concerning Wall Street and Main Street, consider that it is possible that the concern is deeper - is he worried that he will be a burden on his children and grandchildren? Is he worried that he won't have anything left for you or your children to inherit?
If you know the answer to this, perhaps your conversation can go this direction, as opposed to the FDIC/Bond direction, which you've already said is like talking to your cat. If his worries truly are about being a burden on others financially or not being able to leave wealth behind to care for children and grandchildren... well, perhaps you can find ways to solve this worry.
We had this same issue with my late grandmother, whose dream (I've been told) was to help pay for my brother's and my college tuition. We spoke with an attorney about setting up an interest-bearing (interest receiving? sorry, don't know economic terms) account that could not be touched by the government, regardless of outstanding debts due to healthcare. Also, rules in Wisconsin allowed for $10,000 annual per-person tax-free gifts to mom, dad, my brother and I. This also took assets out of government's way. Finally, my mom (grandma's daughter) had Power of Attorney over other financial assets to take care of bills in her later years.
Golden years are a hard time to worry about money. If you think that inheritances and health and death bills may be the reason your father's hoarding money in mattresses or safety deposit boxes, perhaps discussing secure money solutions as opposed to government's FDIC and bonds might help.
Good luck! :)
olevetonahill
3/3/2009, 11:12 AM
Oh well... I've asked him. Now I can buy what I want. Sometimes I feel like such a kid. (45)
Brings to Mind the saying " I became a Man when My Dad died "
Sad but true in a lot of ways .
jkjsooner
3/3/2009, 11:31 AM
really though, how good is the guarantee by the government at this point.
are they just going to print money if your bank craters?
Yes. They have a unique ability to do that and the consequences of printing more money would be less than defaulting on FDIC guarantees and bonds....
Plus, if we get to that point, deflation will be the primary concern so I wouldn't worry too much about the immediate inflationary problems associated with the creation of money.
Note: I am no economists so feel free to correct anything I said above.
OklahomaTuba
3/3/2009, 11:33 AM
Printing more money doesn't cause inflation now??
Someone forgot to tell Zimbabwe that.
http://encikwan.com/wp-content/uploads/2008/06/zimbabwe-currency-2008.jpg
well, yeah. i guess your $250k doesn't mean much in your mattress or in your bank account at that point
now gold stuffed in your mattress...
8timechamps
3/3/2009, 12:30 PM
The market is in a reactive state right now. Things will be okay.
OU4LIFE
3/3/2009, 12:37 PM
The market is in a reactive state right now. Things will be okay.
no they won't. Shut up.
8timechamps
3/3/2009, 12:38 PM
no they won't. Shut up.
uh huh!
OU4LIFE
3/3/2009, 12:44 PM
don't make me stop this car.
8timechamps
3/3/2009, 12:46 PM
Go to your room!
tommieharris91
3/3/2009, 12:56 PM
Yes. They have a unique ability to do that and the consequences of printing more money would be less than defaulting on FDIC guarantees and bonds....
Plus, if we get to that point, deflation will be the primary concern so I wouldn't worry too much about the immediate inflationary problems associated with the creation of money.
Note: I am no economists so feel free to correct anything I said above.
It's kinda like right now. The Fed is trying to keep interest rates low to stem deflation. I personally wouldn't mind seeing the Fed leave bags of money outside its doors at night, free to any homeless person who wants it. As long as they spend it on liquor, its cool.
And yes, printing more money would matter now.
Chuck Bao
3/3/2009, 01:43 PM
ouwasp,
I hear ya! It's got a lot (all) to do with that generation. My sweet little (loaded) grandmother took all of her money out of the bank and put it in safety deposit boxes just before my grandfather died (2004).
At the time, I was a financial advisor, and tried to get her to understand reality. She never bought in.
She too lived through the depression.
I can't say that I blame them. Had I lived through that horror, I'd probably feel the same way.
Doesn't make it any less frustrating though.
This doesn't have anything to do with the current situation, or at least I hope not. My family has always be told to do this sort of thing immediately after the death of a family member. Not all of it, just put some money into the safe deposit box in case the will is contested and the accounts are frozen during probate. Or, maybe this is sort of a hush thing that shouldn't be mentioned on a public message board.
OU4LIFE
3/3/2009, 01:49 PM
no Chuck, I think most people do that. That was always my first instruction from the parents, upon hearing something happened to them, I was to go immediately to the bank.
But i was under the impression that SDB's were also frozen in cases of probate, no?
8timechamps
3/3/2009, 02:30 PM
Estate planning is a mountain of it's own.
How assets are titled is the most important factor. Even when you set up something as simple as a checking account.
You have three choices:
Set the account up in your own name, without listing beneficiaries. - upon the death of the account holder, these assets fall into probate and follow the direction of said person's will or trust.
Set the account up JTWROS, Joint Tenancy with rights of survivor - account is basically owned jointly. If account holder "a" dies, then account holder "b" controls 100% of the account.
Set the account of TIC, Tenants in common - The account is owned by one or more people. (Let's say for the sake of example, three people own the account) When "a" dies, the portion (or percentage) of their account is transferred to the person or persons they stipulate as beneficiary.
The bottom line is, if you have a decent sized estate, doing no planning leads to major problems down the line. Not to mention the tax issues.
Chuck Bao
3/3/2009, 02:48 PM
no Chuck, I think most people do that. That was always my first instruction from the parents, upon hearing something happened to them, I was to go immediately to the bank.
But i was under the impression that SDB's were also frozen in cases of probate, no?
You are right, of course. Maybe, my instructions were to take things out of the SDB too. Now you have me confused. Not that my family has anything in there except birth certificates and a 150-year old family German Bible and other sentimental stuff nobody wanted to lose in case someone's home burned down. I am going to be quiet now.
8timechamps
3/3/2009, 02:59 PM
Just remember, if there is a record of it that the government can find, it'll be included in the final estate valuation (for taxes).
this is why you use Mason Jars :D
sadly lots of my cash were lost with Jerk's guns in that boating accident
8timechamps
3/3/2009, 03:25 PM
I know Dean is a client of the Mason Jar bank and trust.
jkjsooner
3/3/2009, 09:39 PM
Printing more money doesn't cause inflation now??
Someone forgot to tell Zimbabwe that.
Oh, I forgot that there's no middle ground between deflation and hyper-inflation.
Well, I saw my Dad again a couple hours ago. He's settled down now, somewhat. Went to the credit union today to visit about his cds. He is going to talk to my bank pres bro in law, I was kinda surprised about that.
When he went outside to check on the evening paper, I was able to ask my mom if he was okay. She shrugged and said he's been "mulligrumpy" lately and she guessed some story about the market set him off.
Later I took my daughter over to let thm read an essay she'd written. Everything seemed okay then...
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