On 1/1 1999, Europe will be united in a new economic union and the new Euro currency will be introduced. This IT intensive effort has forced Y2K to the back burner, since the same limited resources are needed for both projects. So, along with the expected 1999 Y2K problems is the added uncertainty, and possible conflicts and turmoil, that this will bring. The choice to allocate programmers to one project or the other increases the chance for problems with both.

There are many questions still about the preparedness of Europe, and the rest of the world, for this monetary union, from not only a financial standpoint, but also in a political context as well. Will it be a strong or weak currency after its introduction, and what will this mean to the dollar?. Either has the potential of starting a currency crisis. Some economists point to the probability of an unsuccessful euro precipitating another European monetary crisis worse than the 1992 - 1993 one. Others have stated a successful euro will cause a crisis in the US dollar. In other words, bad news for someone.

This has ramifications for commodities also, such as oil and gold, which are denominated in US dollars. The Bretton Woods agreement of 1944 set up, in effect, the US dollar as the world standard currency. When the dollar is weak, the price of gold for example becomes more affordable in other currencies. Think about the potential effects on world stock and bond markets as well.

As Diane is fond of saying, shift happens. After the euro introduction, will there be a shift of European IT resources from the euro to Y2K? Even if shift happens, how much of a difference will it make? Is it possible that the shift will go in the other direction, taking Y2K resources and moving them to a euro in trouble?

It is not unreasonable to assume that there will be Y2K and euro problems starting at the same time. With the answers to some of these euro questions arriving at the same time as potential 1/1999 Y2K problems, will we even be able to discern which problems were caused by what? Can we separate the two? Time will tell, and shortly.

-- Rob Michaels (sonofdust@net.com), December 19, 1998

Answers

Hi Rob.

Pei-intl.com has a very interesting story concerning the Euro.

Like to read your posts. I am following current financial events very closely. I was stumped last fall as I felt for sure that we were in for the great crash.

Do you think that the current deflationary spirals of commodities will do great harm in the near future. I do. I recently read a forecast of major social unrest predicted in most of the third world oil producing countries.

I have a deepening feeling of dread as time goes on.

We are bombing Iraq and I believe its political only!!!!! Expect domestic terrorism Our government is absolutely distracted by Monica Gate A lot of Economists are predicting a bubble in Stock Market Things in the East are getting worse not better Latin Americas effort to heal its economies are to raise taxes. Go figure. Seems to me that this will deepen negative feelings in these countries as well as starting new recessions. Russia will probably fall, God save Russias people. Y2K is still a none issue as far our (USA) governments public stance is concerned. And besides, its cold outside.

Hate to sound so negative. You know when I heard of Y2K last year I said "no way". When I studied through last month I said "well maybe, but I still doubt it. Surely were not that stupid". Now I say "Oh no, God help us, we (globally)really are stupid".

Anyhow Rob, what do you think. Market Depression Pre Y2K or not?

ww

-- WAYNE WITCHER (WWITCHER@MVTEL.NET), December 19, 1998.

Rob,

I read awhile back that the Euro is something world markets have factored into their decisions, and an unsuccessful Euro will play havoc with markets. And you're right, any Euro problems start the same time as early Y2K problems on January 1, 1999. And these problems will be taking place at the same time that we're worried about unhappy folks in the Middle East retaliating for our current military action over there...

I saw an articles in "Forbes" today called "Recession 1999?" It covers all the weaknesses in the current economy that could cause a recession in 1999--and there are many. As usual for economists, though, they don't mention Y2K. Here's the link for "Recession 1999?":

http://www.forbes.com/forbes/98/1228/6214072a.htm

-- Kevin (mixesmusic@worldnet.att.net), December 19, 1998.

I think I'll go get some more beans...

-- Tricia theCanuck (jayles@telusplanet.net), December 19, 1998.

Thanks Rob,

"After the euro introduction, will there be a shift of European IT resources from the euro to Y2K? Even if shift happens, how much of a difference will it make? Is it possible that the shift will go in the other direction, taking Y2K resources and moving them to a euro in trouble?"

The latter, probably. I'm no expert on the Euro but the word on the street is that it's cutover will be a mess - many entities not ready, with code that has been rushed to make the deadline.

Should be an interesting January. The Euro-debacle, Jo Anne effect, Clintstone, Iraq.

What a tangled web we weave.

-- Andy (2000EOD@prodigy.net), December 19, 1998.

ww: For you:

"I was stumped last fall as I felt for sure that we were in for the great crash. "

There was a great crash in Asia, then Russia, then the contagion spread to Brazil. etc, it just hasn't reached here ...yet. It will. Don't be in its way.

"Latin Americas effort to heal its economies are to raise taxes"

This was part of the 'mandate' from the IMF for the $32 Billion bail out. The Brazilian government didn't want to play along, but wanted the money. Not hard to understand. This is a country that had an inflation rate of 10,000%.

"Anyhow Rob, what do you think. Market Depression Pre Y2K or not?"

The markets will be toast. All of them. It's only a matter of time and magnitude. The whole house of debt cards is coming down, Big Time. Some of my reasons for these remarks are posted on other threads, like the current Gold and Y2K thread. Markets don't like uncertainty. Thats all we can look forward to coming up. If I had to guess about the when, I would say sooner rather than later, but I've been wrong before. Hopefully I am wrong, since my pollyanna scenario is for, at best, something on the order of the Great Depression with 25% unemployment and equiities down 80% or more from the 9400 level on the DOW. The advent of the euro introduces even more uncertainty and market volatility, which I don't understand well but am trying to get a handle on now.

Thanks for that great link. I bookmarked it and plan to give it a good checking out soon.

Kevin: In reading the link article, I was impressed with the mention of the Nifty Fifty since I think todays counterpart is the 'Nifty 500", with all the dips buying the index (dippies). Indexing is great on the way up, but wait 'till they are indexed to a bear!

Another good parallel which is not made very often but with which I agree is the comparison to Japans market at 40,000 and the current US market bubble. Most interesting was the remark, similar to what I posted on the Gold and Y2K thread, about liquidity going into the stock market. When the euro is introduced, it looks increasing plausible to me that the early warning barometer of any trouble will be the financial markets.

Hi Tricia. ROFLTIP!

-- Rob Michaels (sonofdust@net.com), December 19, 1998.

How can grownups be so stupid?

Have we as a nation and as a planet made ONE right decision this year?

Who asks the most vexing questions, Rob or RC?

Are those of us NOT in the market any safer in the long run? In the short run?

Is this thread in the running for the Top-10 most depressing threads on this forum?

Is this thread generating more questions than answers?

Are there such things as stupid questions? Or merely stupid questioners?

Got millet?

Hallyx

"There comes a point where you have to stand up to reality.......and deny it." ---Garrison Keillor

-- Hallyx (Hallyx@aol.com), December 19, 1998.

>How can grownups be so stupid?

There are two things the universe is full of...hydrogen and stupidity.

>Have we as a nation and as a planet made ONE right decision this year?

Nope.

>Who asks the most vexing questions, Rob or RC?

Tie.

>Are those of us NOT in the market any safer in the long run? In the short run?

Yes, market money went into the solar cells that arrived this week among other things.

>Is this thread in the running for the Top-10 most depressing threads on this forum?

I'd vote yes.

>Is this thread generating more questions than answers?

Nope. Not after all these answers.

>Are there such things as stupid questions? Or merely stupid questioners?

My favorite stupid question...if you cross the international date line on your birthday do you still get presents? >Got millet?

Not yet. It wasn't very far up on the list but it's now next.

>Hallyx

LM

-- LM (latemarch@usa.net), December 19, 1998.

Hallyx? Was that you? The same Hallyx that posted to my previous question: People and Resistance to change?

If the euro is a bust, Will you remember son of dust, And what was asked upon this thread, The questions asked twelve days ahead, With the breeze there comes the gust.

Y2K questions can be vexing, Answers sometimes are depressing, But Know your fruitcake is a thread, Read it 'fore you go to bed, Perhaps you'll find it quite refreshing.

No more vexing talk today, No more... time to go away, Let the forum start anew, On our road there are but few, Travelers that go our way.

-- Rob Michaels (sonofdust@net.com), December 19, 1998.

Wayne -- Russia will probably fall...

How would that be any worse for Russia than its present situation?

Just wondering. It's pretty hard to fall out of the basement.

-- Tom Carey (tomcarey@mindspring.com), December 20, 1998.

Tom: "will russia fall"?

It may be better for russia to have a dictator initially. BUT, remember Germany?? Was it better for the Germans to eventually climb out of the hole or to catapult out under that dictator and nearly wipe out an entire race of people in the process.

Russia will fall. And we in the west will regret. The middle east will no longer be our private punching bag. I guess then that the rise of the new dictator in Russia will be good for Saddam. I wish I had the money to personally go and help feed some of those poor children dying in the streets. Read the latest newsweek story on Russia. If your heart doesnt break you dont have one. Pray for Russia.

NOT TO SHOUT BUT:

THis is a depressing thread?? Well realize that the reason people refuse to even take up this problem is that they "dont worry, be happy". Cattle dont worry, right up to the slaughter.

Cattle are beefy they dont get it right All they want is grain and water, they stay up all night I on the other hand smell trouble in the air Im a little smarter than the rest because I PREPARE....

Rob. I always wonder whos program the IMF has. I understand the need to cut deficent spending, but raising taxes?? At the end of the year, those tax dollars I send to my uncle are not being used to keep the local buisness open, if you know what I means.

ww

-- WAYNE WITCHER (WWITCHER@MVTEL.NET), December 20, 1998.

I'm sorry, Rob, I had to lob

Those questions on your thread.

I'm so confused and sore abused.

My tired and aching head

Can't understand or comprehend

The Euro and Wall Street.

It's hard enough to get some stuff

To keep warm and to eat.

It isn't fun. It's come undone.

I always knew it would.

It's such fuss. And it is us

Who'll pay. Well, some one should.

There's opportunity for you

To do right by our children.

We have their trust. And so we must.

If not us, well, who will then?

When it's all through, I'll think of you

And all the love we shared

God bless you all. We heard the call.

At least we'll know we dared.

Hallyx

"We may forget. But let me tell you this: Someone in some future time will think of us." ---Sapho

-- Hallyx (Hallyx@aol.com), December 20, 1998.

It all comes back to your local situation, where ever you are. I have a Belgian friend who tells me that many, many homes have their own wells. Over in Europe, theyve gone through incredible deprivation a couple times this century. The can make it again. So can we. The more basic, alternative and sustainable the better. Peoples determination is a powerful force. Much greater than any monetary, computer system or military force.

You may wish to print out copies of some time honored documents. For the shifting future.

Diane

Declaration Of Independence http://www.law.indiana.edu/uslawdocs/declaration.html

The Constitution of the United States of America http://www.law.cornell.edu/constitution/ constitution.table.html#amendments

-- Diane J. Squire (sacredspaces@yahoo.com), December 20, 1998.

Diane, is it my imagination, or have you become much more sanguine concerning the outcome of this impending discontinuity?

-- Elbow Grease (Elbow_Grease@AutoShop.com), December 20, 1998.

Mr Grease,

Diane is the embodiment and personification of sanguinity. Don'cha know?

Hallyx

"We are not human beings having a spiritual experience. We are spiritual beings having a human experience." ---Pierre Teilhard de Chardin

-- Hallyx (Hallyx@aol.com), December 20, 1998.

Euro report from Blanchard Research (precious metals dealer): http://www.blanchardonline.com/ Beru/bulletin8.html

Beru Report

-- Rob Michaels (sonofdust@net.com), December 20, 1998.

Don't know why the above link doesn't work, it looks ok. You can try the home page and click the link from there.(www.blanchardonline.com)

-- Rob Michaels (sonofdust@net.com), December 20, 1998.

Sanguine, Elbow?

No, just realistic. I'm focused on the people not the heavy metal. Hard to say what will all go haywire, but I do know a prepared, aware and cooperating community of creative individuals can tackle just about anything. Do we have major change coming up? Without a doubt. Will it knock us back to the stone age? No. I suspect it will knock those of us who make it, forward, into a more sustainable future. I would simply like to see more, rather than less make it, and I truly believe that rests in our hands, not those of the world governments.

Diane

-- Diane J. Squire (sacredspaces@yahoo.com), December 20, 1998.

Found this at the www.y2kreview.com site:

Continental Divide: (Thomas Hoffman, Intellectual Capital)

A recent survey conducted by PricewaterhouseCoopers showed that 98% of European organizations "believe it is more important to convert their computer systems to process euro currency transactions than to fix" Y2K. In the United States, the percentages are reversed. This article asks: "Why the trans-Atlantic rift? Does it really matter?"

If you want to go directly to the article rather than y2kreview, the url for the article is: http://www.intellectualcapital.com/issues/98/1217/icbusiness2.asp Continental Divide

-- Rob Michaels (sonofdust@net.com), December 23, 1998.