Real Paper Banknotes

On YtwokUpdate there is talk of cash.

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I assume the discussion there concerns U.S. Federal Reserve Notes? Did I miss something, or are they not still fiat money?

If one were expecting things get so bad that snuggling up to a navy base would seem like a wise move (maybe United States Navy installations have a different reputation from Royal Navy ones ;-) wouldn't CommodityMoney? be a better bet?

• salt
• pepper
• whiskey
• shoe-laces?

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My one real fear about Y2K is that, driven by FUD, too many people will attempt to convert their bank balances into cash, this by itself could bring down some banks (especially small ones), and have serious affects on the banking system.

And then we could all be screwed, independently of failures of manufacturing, distribution etc. etc.

-- KeithBraithwaite

I'm banking on apathy to save the day.

Will you personally take out banknotes just in case there is a run?

Me personally, no. However, the Bank of England is expecting people to and is arranging to print and distribute extra notes. Your central bank may well be too.

According to my bank's Y2K manager, liquidity is not an issue (my bank is part of HSBC) but cash volumes are.

It's interesting to note that in the many spectacular bank failures that have occurred (mainly in the US) in the last hundred years or so, panic induced by the unavailability of cash has been the main factor. JohnKennethGalbraith? covers this well in various popular books. -- Keith