The envelope arrived in my mailbox on a Tuesday. I recognized the block-lettered handwriting on the front as my mother’s. Inside was a typewritten missive addressed to my sister and me. Two short but alarming paragraphs informed us that our mother had withdrawn a not-insignificant portion of our inheritance and buried it — literally — in the ground.
At the bottom of the page were instructions on how to locate the interred treasure, consisting of paper bills and gold and silver coins, in the event of a global financial meltdown.
My phone rang a few hours later.
“Dude,” my sister’s voice was frantic. “I’m worried.”
It wasn’t the risk of financial apocalypse that preoccupied her. It was our mother’s sanity. Hiding money in the ground? Isn’t that a sign of some creeping, Grey Gardens-level cognitive decline?
What made the letter so surprising was that, over the course of our lives, our mom had quietly become the most financially savvy person in the family. Born poor in the Soviet Union, she emigrated to the U.S. in the late 1960s. In our middle-school years, she embarrassed us with her thrift, taking us shopping for training bras at secondhand stores. She’s been resoling the same pair of boots since 1995 and started bringing her own mug to the coffee shop to save 50 cents on her daily latte long before fancy thermoses made a comeback.
But it wasn’t just old-world scrimping that helped our mom finance a comfortable retirement. She made shrewd investment moves, too, buying into tech stocks early and learning her way around IRAs and 401(k)s. When did the smartest money person I know become a doomsday prepper?
For months, my sister and I pleaded with her to reconsider, but she wouldn’t budge. Finally I demanded an explanation.
“I am very sensitive to the criticism of the capitalist system, and I believe that the free market is a myth,” she responded. “It certainly ruined Russia, in my opinion.” She explained that she was bothered enough by the fact that taxpayer money was used to bail out the banks in 2008. Then she heard some economists saying that insolvent banks in the next crisis might require “bailing in,” which could allow financial institutions to legally confiscate some customers’ deposits. She’d long since moved her checking and savings accounts out of the big banks, and now she wanted to close the safe deposit box where she and my father had for decades stashed important documents, a bit of cash, and some gold and silver — just in case.
I was just a humble humanities major, not an economist, but I was still pretty sure that the smart money was not buried in the ground. After all, the U.S. economy, built on the free flow of capital among banks, companies, and individuals, is the engine that powers the world, and the stock market is hovering near its all-time high.
But by the time I went to file my taxes in April, my mom’s decision had started to eat at me in deeper ways. The Trump administration tax cut didn’t seem to be doing anything for me or anyone else I know. And why was the stock market doing so well anyway, I wondered, when everywhere I looked, I saw students swimming in debt, homeowners staggering under upside-down mortgages (if they could afford to buy a house at all), sluggish salary raises lagging behind skyrocketing rents, and friends financing chemotherapy via GoFundMe? Millennials are falling out of the middle class at a rapid clip, and the American dream of social mobility is more alive in China than it is here at home.
Nearing middle age, facing down another four to five decades’ worth of money-management decisions (if I’m lucky), I realized that I had absolutely no idea who or what I could safely put my faith in. And now my lifelong financial role model was burying cash in the backyard. Was my mother losing it? Or was she crazy like a fox?
I decided I needed to get to the bottom of it — or at least to try. I put the question first to the person most likely to have an accurate read on my mother’s mental health: my dad.
“When she first suggested closing the safety deposit box, I thought it was absurd,” he wrote in an email. My dad had been certain that people could still get into their safe deposit boxes even in the depths of the Great Depression, when Franklin Roosevelt shut down the banks to restore confidence in the financial system after a series of bank runs. But then he started Googling around and stumbled upon an internet forum where people were discussing an executive order in which Roosevelt allegedly ordered all safety deposit boxes sealed.
“That convinced me she was not insane,” my dad wrote.
I tried verifying the executive order, which is widely circulated in all corners of the paranoid internet, and discovered that it seemed to be made up, leaving me even more confused than I already was.
I wondered what professional economists and finance people thought about my mom’s decision. I started by dialing the 800 number of the bank where I keep my modest nest egg and relayed the story to a client-services rep named Sal. He told me that he fields questions like this once in a while, mostly from anti-government types who don’t want anybody knowing where their assets are.
“My great-grandfather used to hide money in the walls,” Sal said, sympathetically. “For some older generations, that’s what they feel is the safest. Is it outrageous? No. Is it out of the ordinary? I would say so.”
Sal’s outlook was all sunshine. He talked about the resilience of the stock market, which completely recovered from the 2008 crash in a few years, and about the Federal Deposit Insurance Corporation (FDIC), a Depression-era innovation through which the government guarantees bank deposits. Designed to elicit confidence in the financial system and prevent bank runs, the FDIC insures deposits up to a quarter million dollars. But it doesn’t cover everything: The cash in my parents’ safe deposit box, for example, isn’t protected. Neither are investment accounts or some trust funds (not that anybody’s shedding a tear for the children of the rich). While current FDIC chair Jelena McWilliams recently assured Reuters that she’s not concerned about the health of U.S. banks, others worry that, in the megabank era, the FDIC wouldn’t be able to keep its promise in the case of another collapse.
Sensing my anxiety, Sal said that if I wanted to be really conservative with my investments, I could keep about 6% in a liquid asset, like a money market account, and diversify the rest of my holdings between stocks and bonds.
“What percentage of my portfolio should be gold bars buried underground in an undisclosed location?” I asked.
“Unfortunately, zero,” Sal said. He reminded me that the value of my mom’s entombed cash will be eaten away by inflation the longer it sits in the ground. Still, he humored me: “Let’s say you have a gloom and doom scenario and the banks close: How are you gonna break up your gold bar for goods? Are you going to break off a corner and give it to the clerk at the grocery store? Probably not.”
Sal brushed off my mother’s concerns about a potential bail-in, all but ruling out the possibility that a domestic bank would ever deny depositors access to their own money in the event of another crisis like the one that ground the world economy to a halt in 2008. “That will most likely never happen,” he said. “If it does, we have bigger problems.”
Bigger problems, of course, are precisely what worry my mom — and some economists. One of these is her favorite pundit, Richard Wolff, a Marxian economist and professor emeritus at the University of Massachusetts at Amherst who’s been an outspoken critic of American capitalism.
“What your mother is correctly perceiving is that 2008 was a wake-up call that the capitalist economy of the U.S. is now so debt-dependent that we are at risk of these institutions collapsing,” Wolff said when I reached him by phone earlier this month. “Your mother is right to be skeptical. She lives in an economic system that ought to scare the pants off you. Don’t let anybody, with or without a PhD in economics, argue you out of it. Just use your common sense.”
Wolff, who got his PhD in economics from Yale in the late 1960s, recounted the story of his grandparents, German shopkeepers who had spent half a century meticulously saving their marks. When hyperinflation hit in the 1920s, his grandfather would get paid twice a day: once at lunch and again at closing time.
“At lunch, he’d run home to his wife to give her the money, and she would run to the grocery store to buy the family food because if she waited until later that day, all the prices would’ve doubled and the value of my grandfather’s pay would’ve been half what it was at noontime,” he said. It got so bad that “in a three-month period, the value of 50 years of savings was reduced to the price to a quarter-pound of butter. That drove the German people crazy, and a few months later, they brought in Adolf Hitler. The connection between the two should be obvious.”
Wolff said the economy today is the most dangerous he’s seen it in his lifetime and that the threat of a bail-in is very real: It happened in Cyprus in 2012, and post-2008 regulations made it possible, at least in theory, for deposits not insured by the FDIC to be used to wind down a U.S. bank as well. He knows he’s out of step with most mainstream economists who are rosier about capitalism and the government’s ability to mitigate economic disaster, but he left me feeling like maybe they’re the ones who need therapy, not my mom.
“If you were sitting in the office of a psychiatrist, they would say the first step is to recognize what your problems are. But if you’re so frightened of your problems that you can’t face them, then the chances of you solving them are very small,” Wolff said. “The only way to eliminate the risk is to change the economic system, and Americans, more than anybody in the world, are terrified of talking about that.”
In Wolff’s view, a for-profit banking system is inherently unstable. He’d like to see more public banks in the U.S. — currently there is just one, the Bank of North Dakota — which would be owned by the government. He doesn’t think burying cash in the ground is the safest bet, but he also says that my mom’s fears of a financial collapse are not unfounded.
“Not only is she not crazy or losing it, but your mother is sharper with her insights than most people of her age or any age for that matter,” said Wolff. “You owe her a bit of an apology.”
If you’d asked me a year ago if I thought my mom had anything in common with Pablo Escobar, I would’ve assumed it was a setup for an elaborate joke. But then she, like the Colombian drug kingpin, buried her cash in the ground, joining history’s long parade of paranoid peasants and eccentric billionaires who’ve lost faith in the economic status quo.
Escobar buried his greenbacks because he was raking them in faster than he could launder them. But everyday people bury their treasure, too: Around 11% of Americans over the age of 55 stash cash at home according to a survey by Edelman Intelligence. Most do it assuming their money is safer there than in a bank, but the only time you tend to hear about them is when that assumption is proven heartrendingly incorrect. Remember this possibly apocrpyhal story about the Israeli woman who unknowingly tossed out her elderly mother’s lumpy old mattress along with the $1 million in cash her mom had spent a lifetime saving inside? Or this poor sucker whose nest egg literally rotted because remembering a PIN seemed like too much hassle?
But what if the suckers are those of us who believe in the system? Is my mom really so different from the super-rich sinking rainy-day cash into doomsday bunkers complete with simulated natural lighting, dog parks, arcades, and rock climbing walls? The 1% aren’t planning to stick around and watch their wealth evaporate, after all. When the shit hits the fan, their private jets will have long since ferried them off to such exotic locales as New Zealand, the Czech Republic, and, uh, Terre Haute, Indiana.
Others have turned to ones and zeroes to alleviate their fears of another collapse. In the wake of the 2008 crash, cryptocurrencies like bitcoin emerged as weird, sexy alternatives to government-backed monetary systems, something new and pure that skeptics could put their faith in again. Building on the recognition that all money is a collective illusion that has value essentially because we believe it does, crypto enthusiasts promoted new forms of money that were supposedly free from the corrupting influence of global politics and Federal Reserve policy.
“Some people create this illusion around cryptocurrencies like, ‘Do you believe in the U.S. government or do you believe in cryptography and the power of mathematics and the unbiased law of technology?’” said Jaya Klara Brekke, a political crypto-economist based at Durham University in the U.K. But that logic ignores the fact that people wrote the code that governs the monetary policy of cryptocurrencies in the first place. “An easier way to say it is, ‘Do you believe in the U.S. government or do you believe in a piece of code that a bunch of dudes wrote?’”
Brekke worries that, for all their promise, cryptos could just wind up replicating what’s wrong with the existing system. “Some of the solutions being put on the table, instead of challenging the underlying assumptions of capitalism, are a much more fine-grained application of the same philosophies of capitalism run through automated processes rather than governments,” she said. “That can be really problematic.”
She said risky investments like cryptocurrencies aren’t a solution for someone like my mom who no longer believes in the traditional banking system. She wasn’t sure burying cash in the ground is the best fix either since it creates a new set of potential problems — “maybe animals eating the paper?” — but she stopped well short of calling for her to be committed.
“I don’t think it’s a crazy set of questions that your mom is asking herself,” she said. “So many people are feeling this way, because the past 10 years or so have made it pretty blunt that the system as it is is a total scam.”
I reached out to one more money wonk, a former Harvard economics professor named Terry Burnham, who took his money out of the banking system in 2014. He also sided, partially, with my mom.
“Your mom is not crazy, in my view, to think that money deposited in a bank is not safe,” he replied. “The trouble is that no place else is safe either. So you have to pick your poison.”
Burnham’s insight got me thinking that there really is no way out of the mess and uncertainty of money. When we talk about money being a collective illusion, we tend to focus on the “illusion” part, but the “collective” part matters just as much. Whatever form it takes, money is inherently social, which means there’s no getting around our reliance on one another, no matter how invulnerable we wish to make ourselves to forces outside of our control.
After speaking to these economists, I called my mom and told her she’d been vindicated — sort of. But one major problem remains: Her secret buried treasure is only “safe” if it stays buried — and secret. I’m not thrilled about the idea of it just sitting there, vulnerable to rot or bugs or mudslides or wildfires or ruminating deer or opportunistic GEN readers armed with shovels. None of these threats worry my mom as much as the prospect of being screwed over by the very financial institutions we’re told we should trust.
“At least I know if it’s under the mattress or in the ground, it’s out of the hands of the banks,” she said, unmoved. She agreed to let me buy her a fireproof safe and to eventually think about moving the cache somewhere else. She said she’d consider trusting a North Dakota-style public financial institution with her money if the option became available in her state.
“One thing in my mind is clear,” she said. “I will not put it in the bank.”