[ReverseEngineer]

My Debit Card worked today as usual. Topped off the gas tank today with it as is my daily routine. I don't use much, I only live about 2 miles from where I work, and then I hit the grocery every day also for my daily needs as I see further stocking of food as a waste of time and current money.

So I pondered on the question of just WHY my debit card still works when by all reason it should NOT work since this whole electronic transfer of funds system should be down the toilet by now with the enormous loss of 1's and 0s in so many banks.

My current conclusion is this: In the midst of their panic, the bankers are unable to shut down the system of exchange, regardless of the fact they cannot take a profit from it anymore. So the system just keeps running up a bigger electronic deficit number as people exchange services through the electronic system while the banks eat the cost of doing business through maintenance of the system with the network engineers and the power required to run the servers.

I NEVER use the credit system, I long ago stopped working on credit and only buy what I actually have money for. I had the bad experience of being hounded by creditors for years, it destroyed my marriage. I chose to not remarry and not produce children because I could not afford either a wife or children. Plenty of other people doing that all over the world anyhow, I really need to ADD to that problem? I work for myself to earn what I need day to day, little more than that. I stored up a year's worth of food, which I see as a reasonable amount. Real bad crash though, I'll give most of it away to younger and healthier friends of mine when overall food stores run out.

Anyhow, I now think the electronic system holds up on the debit level. The Gooberment is running the servers for as long as they have generating capacity to do it. As long as you are still working and depositing money INTO the system, you probably will be able to take it OUT of the system. Not true though for anything over than maybe $1000 on a given day in withdrawals from the system, and if the money is tied up in stocks, bonds or gold certificates, its unavailable.

So, long as you still have a job and make money day to day doing it, you might be OK for a while longer. I think though that the CREDIT end of the ATM system has to go down here very shortly. Has anyone here tried to take money out of the ATM using a Credit Card today?

The system of debit shoud in this scenario persist until all the shelves run dry because the trade system and the overall credit markets remain frozen. This could be a matter of days in some places, a matter of months in others. Far as we are out here, it would be on the long side of that before the warehouses run dry.

I'll be curious to hear about how both Credit and Debit ATM transactions proceed down in the lower 48. Anyone out there trying to pull paper money out of an ATM using just Credit rather than savings, please reply. This is an important Canary in the coal Mine as far as transmission of wealth through the electronic system down to the general consumer is concerned.

Reverse Engineer

[idiom]

The make a profit on all transactions. For the retail banks ATMs are their bread and butter.

[Rod_Cloutier]

I recently had a talk with an uncle of mine who was recently forced into an early retirement by a grocery chain where he had worked for more than 30 years.

We were discussing why cigarrettes were still sold at grocery stores. He told me that he personally, as a former smoker, tried to get the company to stop selling cigarrettes. The problem being- cigarrettes cost more to transport, sell, and distribute than they bring in in total revenue. The overall profit after cost is only 0.2% of the distributors total revenue, but in terms of sales dollars they amount to 20% of sales revenue collected- all cost. So the plan he introduced was to get rid of them. The problem being he told me that the distributors dared not show the 20% drop in revenue on their books lest they all be booted out the door by the shareholders should tobacco products be discontinued.

So they go on selling cigarrettes even though they don't make any money selling them, because they simply do not dare show the financial drop in revenue that dropping tobacco products would cause to their books!

I would think that the banks operate on a similar principle. That they can't drop the revenue from their books that ATM machines provide in terms of service fees and so forth, so they have to keep these things operating even at a loss.

My uncle told me they have a saying at the senior executive level where he had worked that "the higher up you go in the corporation -the closer you get to the door'. He told me this is true in any corporation. That is if you are near the top and your not hitting your numbers- you rapidly get fired. My uncle who gave 30 years of his life to this company, working his way up through every position from a warehouse man in the early 1970's to junior, middle, then senior management to finally be given the boot only because the company decided without notice to move the head office from Calgary to Toronto with no concern whatsoever for those left behind.

I wonder what 'portion' of our economy as a whole is there operating at a loss simply because corporate managers in aggregate can't drop the revenue??

(on a personal note- no one will care if you get married or pop out a few kids- there will be little else to do with your time once the collapse hits)

[RdSnt]

Reverse Engineer:

You are actually participating in the credit market when you use your debit card.
You've heard of the "credit windows" in the news, that the banks use, and the strange process they have of borrowing money just for a day. This is the paper trail of transactions, such as your debit withdrawal, that is used to balance each banks books at the end of each day.
The banks run on a Fractional Reserve system, which means they only have a fraction of real money backing up the books say is actually on deposit (yours and my money).
Because they don't actually have the money you withdraw with the debit card, they need to borrow money to cover it, to balance the books.

A run on a bank is where people start withdrawing money en mass and that exceeds the fractional reserve limit.

This system has been in place for quite some time and it has worked, more or less.
The big danger now is that banks have speculated( and heavily leveraged), with the money they don't have, on derivative products and those products are now worthless.
All the bailout maneuvers you've seen in the US really has nothing to do with rescuing the banks per se, but to avoid the process of putting a value on all these derivatives. If they actually acknowledged the market value of these derivatives which is Zero (0), and I've read estimations as high as 70 trillion dollars nominal value, it would instantly sink the US, the USD would go to zero in a heart beat.

Oh, and that 70 trillion is just what may be in the US, the global derivatives valuation is in the region of 500 trillion.

[eXpat]

Shut down ATM´s today, and you will have protests in the streets tomorrow and riots the day after. Most people lost the habit of working/storing cash. The bank and the ATM´s is where their money is. Shut down the system and you have paralyzed the entire economy, no kidding, there´s not alternative solution there, no chance to go back to the old paper sistem in the 70´s (60´s? not very sure when the transition was made).

[hope_full]

My husband always makes noises about that tv commercial for VISA credit cards. The whole room is moving together in a harmonious dance of commerce when someone pays for their item with cash and the harmony stops and people bump into each other and drop things, etc.

The face of our dollars state that they're legal tender for all debts, public and private. Yet there are places now that *refuse* cash (such as airlines).

Plastic has become such a huge part of our economy, I can't imagine what's going to happen when the VISA card stops working. I guess that's when we'll go from swiping our cards at the grocery store checkout to just swiping the groceries?

Scary times.

[vision-master]

No credit cards allowed here?

The real situation in Houston now
Posted by: "Pat xxx" pat@... Tue Sep 23, 2008 7:52 am (PDT)

I know the woman who wrote the message below quite well; I've known her online for more than ten years. This will not be rumor, but simple truth.

My friend is definitely of the 'be prepared' school of thought, and she taught her daughter to do the same.

Not only is this a testament to the values of being prepared, it's also a rather serious indictment of the present US administration: apparently, they aren't doing a hell of a lot better than they did in New Orleans. With all that time to get straightened out too....

It shows you what happens when cronies or political donors are appointed rather than people with actual qualifications (qualifications other than how much they bribed....err. .. 'donated' to someone's campaign, that is).

The message is unchanged, just as I received it, except that I put a few more paragraph breaks in and took the writer's email address out.

Pat

============ ========= ========= ========= ========= =========

My daughter Jennifer lives in Houston outside the outer beltway. Three days ago, her electricity came back on. Since the hurricane, services that we take for granted are a hardship, even for the people who are lucky enough to have power. At the grocery store, people are allowed into the store accompanied by store employees. Only 20 people are allowed in at a time.

They can get a limited selection of groceries - milk, eggs and bread being very precious and hard to get. They are then checked out using cash. The lines are long and Jenny has waited upwards to a couple hours for food. Gas lines are the same. This is still happening on a daily basis for her. Of course, she considers herself one of the lucky ones - she had emergency cash on hand and has non-perishable food to last several weeks.
Now, magnify Jenny's plight by millions. Not hundreds, not thousands, MILLIONS. 1.2 million people are still without power in and around Houston. These people are running out of cash, are having difficulty getting around to get groceries because they need gas for their cars, and are doing the best they can to survive. Neighbors and family are helping each other. But there are people there without that family or friend network.

Since she's capable of caring for herself, Jenny decided to volunteer in some way to help the people who've lost everything, including their homes. Because the news is filled with headlines about the latest political campaign, Houston's massive cleanup and rebuilding its infrastructure have passed from the public's eye.

Jenny has been volunteering at a Red Cross shelter for the past 3 days. The shelter is an old big box store that was closed down. The Red Cross has set up cots, handed out blankets, and given each person a small bag of travel-size personal toiletries. Port-A-Potties and the trailer showers have been set up outside for hygienic purposes. Hand sanitizer is scattered throughout the shelter to help people keep clean. Each day, more busses arrive with more people. An entire group of mentally disabled people is now housed in this shelter. Their own facility is gone. The website says that only people who are being bussed back are in this shelter.

However, Jenny says there are several people there who claim they were homeless before the hurricane. There are about 1000 people at this place. So far.

There are 40 Red Cross volunteers - 2 groups are from Taiwan and Mexico's version of Red Cross. One individual is the "mental health officer." In trying to handle the crisis, the Red Cross volunteers have been at the shelter from 6 AM to 10 PM - without breaks. Many have had nothing to eat all day. Anyone who appears to possess food is descended upon by the clients and there's simply no way to share with everyone. So because the Red Cross workers can't take a break, they are simply not eating.

There is no way to cook food. The Red Cross is handing out self-heating MREs (Meals-Ready- To-Eat). Tonight, Verizon donated 100 pizzas and 43 sandwiches to this shelter. Jenny said the "clients" fell on the food like starving wolves. Many of them have had little to eat for days.

The volunteers are there to help the people fill out forms to get aid, try to get them whatever they need as far as personal stuff (some only came with the clothes on their backs) and generally help people get settled with a cot and corner to call their own until FEMA and other emergency measures can be taken.

From what I understand, FEMA has been so overwhelmed that the supply line is backed up and people are not getting the resources they need. The newspapers paint a rosier picture, but the reality is, thousands and thousands of people have lost not only their homes, but their livelihoods.

http://www.nytimes.com/2008/09/21/us/21houston.html?em

Many of the clients come up to the Red Cross personnel and ask if they can help find a job. They understand the predicament they're in, and are desperate for work to help themselves. Sadly, there aren't any jobs available and even if there were, the Red Cross can't give them one.

Up close and personal - Jenny says the biggest issue is FOOD. These people, including the workers, are going hungry. At different times during the day, she says even the Red Cross workers have broken down over the misery of not being able to alleviate the hunger. Sure, the clients are getting at least one meal a day, which is better than nothing, but for bodies used to 3 meals a day, its hard. One Red Cross worker hid under a desk so no one could see her crying. Then she wiped her tears, dusted off her hands and went back to work.

I am asking each of you to go to the Red Cross website and donate money or your time. If you can go down there to volunteer, please go give the aid workers help if its possible. If you can, take a busload of people with you - maybe your church group or your cheerleading squad or your boy scout troupe. I realize school is in session and this is probably unlikely. But you could ask your schools and work to do a fund-raising drive for the Red Cross.

I realize a lot of folk were not happy with the Red Cross a few years ago due to issues that made the news. But that has changed. Jenny has volunteered to man a TV hotline for aid, a FEMA POD center and the Red Cross shelter she's now at. She says the Red Cross, BY FAR, is the most organized, most helpful and most reliable at getting the goods and services out there. But they are being slowly overwhelmed by the magnitude of Houston's dire straits. Here's the link for Houston's Red Cross:

http://www.houstonredcross.org/

Please, if you can help, donate.

Thank you!

P.S. You have my permission to send this email to anyone as you see fit.

http://www.peakoil.com/fortopic45285-120.html

[mlit]

I'm starting to see more gas stations in my area offer up to 10 cents per gallon discounts on cash purchases.

[topfuel]

this is why you do not use credit ,you have job,old gold,don't have.

[VMarcHart]

RE, you come up with the craziest of threads. It would be good if you could disclose if you were diagnosed as paranoid by a real doctor. At least we'd know where you're coming from.

Life in Chicago goes on just as normal. ATMs working, tourists spending money they don't have, the works.

I'm not going to watch this thread, so don't reply to me here.

[allmeyer]

I'm not trying to be a scare-monger. I would like to let you guys know that my cousin banks with Wachovia. He got a call on Friday saying that they were suspending all of his debit card transactions and that it was "for his protection."

[the48thronin]

I'm not trying to be a scare-monger. I would like to let you guys know that my cousin banks with Wachovia. He got a call on Friday saying that they were suspending all of his debit card transactions and that it was "for his protection."

This is a routine response from a program of fraud/stolen card protection... not a sign of impending collapse at all.. I know several people who have experienced this because they used their debit cards in ATM's aboard ship etc..

[miskatonic]

Actually is isn't that crazy. This thread sounds reasonable and plausable. If credit cards stop working people will switch to ATM cards. If EVERYBODY is using ATM cards that stresses the fractional reserve which is a form of credit. ATM cards would be a must for a weekend when banks close.

On Monday everybody just switches to cash...until the bank runs out of cash. Assuming there isn't a flat out run on the banks everything keeps working more or less. Once the banks run out of cash on hand they have to liquidate their positions in other areas to come up with cash.

So yeah this thread makes perfect sense.

[Tyler_JC]

I'm not trying to be a scare-monger. I would like to let you guys know that my cousin banks with Wachovia. He got a call on Friday saying that they were suspending all of his debit card transactions and that it was "for his protection."

Isn't Wachovia next on the list of doomed MegaBanks?

If I were him, I'd be withdrawing my cash out of that account and depositing it in one of the safe banks.

Bank Of America will soon become what it was destined to become... The Bank Of America.

If I didn't have a nice setup with my current local bank, I'd swap over to BOA.

[smallpoxgirl]

If there's a national cessation of credit cards, that is TEOTWAWKI. At that moment TS has officially HTF. I really don't see that happening imminently. I'm still getting my mailbox filled with people trying to give me credit cards. Visa and Mastercard stocks are still doing pretty well.

[RedStateGreen]

My ATM worked yesterday.

[miskatonic]

If there's a national cessation of credit cards, that is TEOTWAWKI. At that moment TS has officially HTF. I really don't see that happening imminently. I'm still getting my mailbox filled with people trying to give me credit cards. Visa and Mastercard stocks are still doing pretty well.

Visa and Mastercard are not lenders (banks). They are simply the network that the transactions are made over. Their stock is healthy because transactions have not stopped. (or slowed down?)

When and IF transactions stop you can bet Visa and Mastercard will tank.

Here is some more info on what Visa and Master Card actually does:

http://en.wikipedia.org/wiki/Visa_Inc.
http://en.wikipedia.org/wiki/Mastercard

I used to work for a mortgage software company called Ellie Mae in 2004-2006. They have a similar network called Epass. Except they pass loan requests to people like Fannie Mae and many other lenders. In 2006 we saw a huge decrease in loan traffic over Epass and realized that the bubble was deflating or bursting. Ellie Mae did a poll of the existing brokers and they in turn said that their business was dropping. Most of them expected to go out of business in 2007 which is exactly what happened. If there is a major End of the World scenario playing out you can bet that the heads of Visa and Mastercard already see it coming.

[ReverseEngineer]

If there's a national cessation of credit cards, that is TEOTWAWKI. At that moment TS has officially HTF. I really don't see that happening imminently. I'm still getting my mailbox filled with people trying to give me credit cards. Visa and Mastercard stocks are still doing pretty well.

Based on the Houston Report we got here in this "crazy" thread, it appears to me at least it ALREADY is TEOTWAWKI. And yes I do realize that by leaving any money at all in the bank so I can use the debit card, whatever I have in there is used by the banks and leveraged up at 10:1 in the end of the day reconciliations. Which is why of course I only leave enough IN the bank to keep using the debit card

Now of course, 1 million people in and around Houston who cannot get food might not seem like a serious problem to you, but it does to me. Not to mention all those folks a bit outside the hubs off the Colonial who already have no gas, and if gas isn't being delivered to those areas, food isn't either.

So while a stoppage of the ATM cards might seem to you to be the clear sign TEOTWAWKI has come, its already here because the REAL wealth of food it signifies cannot get to the people who need it to live.

I remember watching a Discovery Channel Docudrama about the aftermath of the Supervolcano below Yellowstone blowing off. One by one, huge Plumes of gas and ash began raining down on the world all at once. Cars were choked and people had to hide in their homes to avoid breathing the toxic dust. Helicopters could not fly to rescue any people at all, it was EVERYWHERE. Sound familiar?

The Plumes we saw blow off were first Bear Stearns, then Fannie and Freddie, then the big banks blowing up one by one. The massive die off of World population through Hunger did not start with Bear Stearns though, it has been happening for the last two years, though the stories you read about it seem so far away, in those perpetually poor countries of the world that lost early on in the Poker Game. Did not seem to anyone here it could actually happen in the Richest, Most Powerful country in the world, but that is what we face here.

In the Docudrama, the Gooberment sent a message over the radio urging a "Walk for Life" to central facilities with food. There will be a Walk for Life here also, as hungry people leave their suburban McMansions heading for the Food Centers on Foot. Many will die along the way, a Trail of Tears for the displaced and homeless. They are not heading to food centers. They are heading to Death Camps.

Its exactly what happenned in Nazi Germany, just on a World Wide scale this time. In each locale however as the poor descend, the military will fracture up as each individual area becomes exhausted in food supply, and they start warring with each other. This time, there is no deep pocket around like America to use the wealth of the land and the wealth of oil to ramp up a big military machine to fight the forces of Fascism. We are bankrupt, so are the Rsusians, so are the Chinese.

People go to war when they no longer have a choice as a society. The land they live on can no longer support that population, its been drained. You have to go out and steal the wealth somewhere else to survive. Why do you think poor folks turn to crime as a last resort? They are shut out of the Poker Game, they lost in this gamble, mostly quite early on as wealth got centralized into the hands of a few bankers who absconded with the Gold people accepted as a measure of wealth. For the last 400 years, wealthy descendants of these early thieves have enslaved entire populations by manipulating the currency and manipulating the game, changing the rules on you periodically. They functioned as the House, you were just a Player, and as we all know, the House always wins statistically speaking.

Anyhow, the Paperwork on the Bankruptcy of the World is not done yet, though the Game is clearly over here. I just am looking for SOME sign that would tell the recalcitrant who think we can work out of this with a slow die off that it really IS over. At least I know from this thread that at least SmallPox will acknowledge TEOTWAWKI has ended when the Plastic Doesn't Work.

Reverse Engineer

Reverse

[copious.abundance]

My checking account is at Washington Mutual, and I went to the ATM today and it went just as normal.

Sorry, no doom today.

[emersonbiggins]

My checking account is at Washington Mutual, and I went to the ATM today and it went just as normal.

Sorry, no doom today.

Nothing is instant. You'll probably have 3,500 or so disagree with you as they trickle out of the WaMu Tower, boxes in hand, there in downtown Seattle in a few days.