Staring in March, I’ve gotten an increasing number of “what should I do with my money>” and the not-uncommon “what should I do about my bank?” None of these were “how do I get make money?” questions. They were all oriented towards safety and showed a high degree of concern.
I took these to be a minority sentiment, but the level of concern is more pronounced than I realized, and has no doubt risen thanks to the dramatic ten days starting with the Freddie/Fannie conservatorship and ending with the AIG bailout.
Consider this portion of Institutional Risk Analytics’ current newsletter:
….by telling Americans that their deposits were insured by the federal government, Washington desensitized generations of Americans to risk from bank failures. Now that risk is apparent and menacing to many Americans with deposits above the $100,000 FDIC insurance cap, as reflected by the user traffic on the IRA web site. Not only have we seen the search requests on our site over the past six months shift from large, publicly traded banks to smaller private banks, but the volume of search requests on our demonstration tools has risen five-fold and continues to rise. We interpret the changes in traffic patterns on the IRA web site as growing evidence of a slowly but steadily building retail bank panic. Older Americans particularly are running scared, pulling funds out of still solvent and safe institutions for fear of losing their retirement nest eggs. Consider this email we received yesterday from a reader of The IRA who lives in NC:
The run on the banks that you mentioned as a concern later in that article is closer than I think anyone realizes. And I wasn’t surprised at all to hear you talk about this. I am a 44 year old woman with four and half years of college and a private school education. I have a job for the moment making $11.00 an hour, $8.00 an hour less than I did just five years ago. I took it out of desperation after looking for work for six months last year. I have been living hand to mouth for the first time since I was 20-something. That job is ending in a couple of weeks – I took it in February; it ends in October. My fiancé is out of work right now as well, and having zero luck finding work. I have already bought two homes in my life, but I don’t have a mortgage now because I couldn’t possibly afford a house on what I make, so I guess I’m lucky there. Sarcasm tinged with reality. Take my situation, mix well with job loss and skyrocketing gas prices (over $1.00 per gallon in Asheville, NC since last Friday) and I just may have to walk to my new home under the bridge. So, yes, I’m considering pulling what tiny bit of money I have out of the bank, as are far more people than I think anyone realizes. Of course, I understand this would cause the entire country to fall down around our ears, but in these times choices are grim and few. Do I leave my money in there day after day hoping each morning it will be there so I and millions of others don’t cause the very collapse we’re afraid of? How am I supposed to manufacture that kind of faith? Will the collapse happen anyway and then my money will just be gone? What are we to do?This is just one of dozens of emails, telephone calls and letters we receive each week, a cry for help from an American who has lost faith in the US economy, our political leaders and our financial system. Keep in mind that IRA has no advertising other than our comments and media appearances, yet we are selling dozens of our IRA Bank Reports every day. Two months ago, we did not have any retail customers. Today we have several thousand retail users of The IRA Bank Report.
dd 
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I have no financial advice for the woman in North Carolina, but I have some practical advice, having lived poor nearly all of my adult life. First, the amount of money you have in savings won’t be enough to give you any maneuverability, so in a real pinch it won’t do you much good in monetary form. Beyond a month’s rent above your cash flow to give you a backstop and a small emergency fund, I’d suggest three actions to backstop your situation. 1) Invest in some good, durable clothing of the kind you would use for the work you will be seeking; no huge amount but a couple of changes of duds over and above what you use every day. Good shoes you can actually walk and be productive in. Cash may not be there later when you will need these things to stay in the job market. 2) Buy a bicycle and know how to get around on it. Leave the cash vampire parked as much as possible and do your personal activities self-mobile. Saves money, and exercise is the best anti-depressent known to humanity. 3) If you have a low cost laptop, well and good; if not get one (few hundred bucks, really), with a wireless connection. Know where you can get free wifi, at a library or a coffeeshop: That will be you contact with job listings and resources, especially if you are limiting your car travel. 4) If you have a medical condition, lay in a supply buffer of what you need over and above your normal consumption. In addition, find our where your public health authorities are in your area, and how to access their services in a pinch. This is not pleasant, and you may not need it, but if you do being behind the curve can be extremely expensive and directly threatening to your well being.
If you do not have enough cash for those four things, consider selling some things you have to raise cash for that minimum resource base, which will serve you no matter where you are living. Start by selling your TV, and liquidate some of those DVDs and etc. until you have the scratch to be adequately capitalized for a stint as a marginal citizen.
And love, I hope you’re not voting Republican? The other folks are kinda feckless, but if you’re voting Republican there’s no advice in the world that will do you any good ’cause you haven’t got the sense to save yerself. Bye now, and best of luck.