As you may already know, Bank of America holds a special place in my heart. It’s a very dark place in my heart, right next to General Motors and mosquitoes. I find the bank to be particularly hypocritical and bent on ruining client relationships, not fostering them. An example will explain my frustration…
Years ago, our company infrequently received a check from a German corporation. It was typically for $3,000-$5,000. The check was oddly written on a debit form where the check writer had hand written the U.S. dollar sign. For years this was no problem. It simply went into our deposits for the day.
Then in 2010, the bank told us the check had to go to foreign collections, which to me meant paying a fee for no reason. I told the branch manager I had an issue with this, and that if I had to pay a fee to process the check I’d be angry. He assured me it would be no problem…
Of course, one month later we received notice of a $45 charge on our statement for foreign collections processing. Angry, I showed it to the bank branch manager and asked what he was going to do about it.
He informed me it was a charge from another department, so he could not reverse it.
I asked him, “So you’re telling me that our relationship as banker and client means less to you and your bank than $45?”
His reply was, “I’m sorry, there’s nothing I can do.”
Based on this incident, I moved our credit card processing – which netted Bank of America tens of thousands of dollars a year in fees – from their company to another.
To say that the $45 charge and the branch manager’s lack of action annoyed me would be an understatement. I felt perfectly vindicated in what might seem an outsized reaction given that this bank had taken taxpayer money and was now acting like nothing more than a vending machine of financial transactions. Its words of relationships and caring are so hypocritical as to be nauseating.
But there is one piece of this story that still bothers me today…
When I say that “I” moved our credit card processing away from Bank of America, I really meant “we,” or even more specifically, “someone else in the company that had to do all the steps to move our processing.”
When it comes to me personally, I still have accounts at Bank of America. And I know why. Because I’m lazy.
Changing banks is a royal pain. Setting up new auto-pays, electronic billing accounts, new checks, etc. It’s all a hassle. Given that I have a day job, I don’t want to spend my time dealing with it. This inertia – Newton’s first law of motion – is created by two forces that are for now somewhat balanced. Namely, my loathing of the bank and my lack of motivation to do things differently.
This is the exact same principle that is failing to drive a change in currency in the U.S. away from the dollar and into something – anything – else.
There are more than 10 states in the U.S. working on ways to approve gold and silver as legal tender. Utah approved gold and silver as legal tender back in 2011. Arizona gave initial approval in late February of this year. Virginia and others are still studying ways to affect such a change.
Granted, the approvals come with caveats. In Utah only, gold and silver coins minted by the U.S. mint are approved, and they only have their face value. This means a silver dollar can only be used to buy $1 worth of goods, even though the silver content is worth $25 or so. In Arizona, the change was approved but doesn’t go into effect until sometime in 2014.
But the real point here is to note that, even with some states taking these measures, there is no rush of citizens urgently demanding a way to use gold and silver as a medium of exchange. This lack of enthusiasm seems a bit hard to understand given that our current medium of exchange, the U.S. dollar, is on very shaky ground as the Federal Reserve continues to print money with abandon.
After having pumped two trillion new dollars into the economy since 2008, the Fed is now on the road to nowhere, engaging in money printing with no fixed end date. Our analysis here at Dent Research still points to a strengthening dollar near-term due to credit contraction and a weak economy, but how we escape dollar devaluation over the long-term is a good question. People should be looking for alternatives, yet they aren’t. And I know why…
We all have day jobs. We have everyday events and problems that are immediate and somewhat within our control. To affect such a dramatic change as to switch the currency we use for daily transactions is so big, and so foreign an idea, as to be almost unthinkable.
Yes, there are some who are clearly on this path… people who are focused on the efforts of our government to stealthily take accumulated wealth from savers and sweep it to bodies politic through inflation. They are right. Inflation exists. We have discussed it many times. But for the overwhelming majority of people, Newton’s first law of motion is still at work. Unless acted upon by unbalanced forces, a body at rest will remain at rest.
So for now, as long as the inflation associated with currency devaluation doesn’t rise too quickly, most people will find the idea of alternative currency simply too radical to think about.
There are kids to be picked up from school…
Medical issues to deal with…
Small things to be fixed around the house…
When it comes to pressing politicians for change, there are taxes to be lowered, benefits to be raised, and a host of social issues to argue about.
Using gold and silver at the grocery store? It doesn’t even move the needle. At least not yet.
This is another reason we’re not huge proponents of gold and silver…
Yes, people have used both precious metals as money in the past, but they are NOT used as money today. As for tomorrow, at least in the near-term, we think the chances that this will change are slim at best.
As for Bank of America, I might still have accounts there, but I do get my pound of flesh.
The branch is across the street from the office. Every time I need to make a simple deposit or withdraw cash I use the teller window. I don’t fill out deposit slips or withdrawal forms, I simply walk up and tell them what I need.
I know this is a big time waster for them because they keep telling me how I can use the ATM or even just take pictures of my checks. Of course I know how to do all that. I’m not an idiot. I just want to use their resources.
It gives me a small sense of vindication, one transaction at a time.
Ahead of the Curve with Adam O’Dell
If done correctly, this is the trader’s equivalent of having one’s cake and eating it too… or having your veal prepared two ways. Right now, the U.S. dollar is on the menu…