Connecting the Dots

Not too many people give much thought as to how banks are wired together. Many people think that if they want to transfer money from any two countries outside the United States it goes straight from bank to bank. The truth is all bank to bank transactions go through the United States first.

When you come and think about it, every time you pull a credit card out of your wallet you are making a bank to bank transaction. If you want to wire money to another account in another bank the same process applies. Even when you write or deposit a check, when the time comes to debit or credit your account, the same network is used. With the banks that control this network being in far less than top shape, the risk of network failure is substantial. What that means is your credit cards may be useless.

As reported before in Account not available the ATM network is already showing signs of sporadic failure. Money may not be as available as one would think. When banks close for the weekend the 24-7 system may actually go off line.

When you come and think about it, this is how the United States exerts influence when it comes to freezing accounts of suspected terrorists in foreign countries. If the foreign bank does not comply, they are taken off the network. In today’s world that can spell major problems for a bank. That means the only way money could be transferred is by physically moving cash in an armored truck. That entire process can take two or more days. In today’s ‘push a button and done’ world, the retro approach is totally unacceptable.

This post is not meant to cause panic, but only to make you aware of how vulnerable the world banking system now is.

Connecting the Dots suggests that you have a stash of cash some place to hold you over in the event of network failure. Establish what is a comfortable amount to have and don’t let it deplete. Enough money to carry on you normal tasks for 3 to 5 days should be enough. Cash for cash payments that you normally make should be in hand 3 or 4 days before you plan to make the payment. That should include cash for food and medicine.