With the deadline to raise the U.S. borrowing limit less than two weeks away, you might be thinking about what to do with your money if the U.S. government defaults on its debt. Wall Street is already thinking about it, which means the rest of us should probably have a look in our own accounts just to make sure we're ready for something unexpected. Of course, that's tough to do since a U.S. default is unprecedented (well, mostly unprecedented). So what should you be doing with your money over the next 11 days?
Get some cash ready: A lot of uncertainty means you need a backup plan, and that generally means cash on hand. As USA Today's John Waggoner points out, stock, bond, and commodity markets will likely become much more volatile. "If you're tired of the roller coaster, consider moving some — not all — of your portfolio into short-term money market securities or bank accounts. You should have enough cash available for your short-term living expenses, anyway." But if you're very scared, a few hundred bucks in the mattress, at least temporarily, might at least give you peace of mind. Slate's David Johnson warns of a "massive run into cash, on an order not seen since the Great Depression, with long lines of people at ATMs and teller windows withdrawing as much as possible," should the nation default. That may be a bit over-dramatic but the point is well-made: Banks could become unstable as the bonds that support them lose value. If your bank closes with your money inside, and the government can't afford to pay the insurance on it, you're screwed.