Y2K - Fed Printing Up Billions Of Dollars In Case Of Run On Banks

5-2-99

SAN ANTONIO, Texas (Reuters) - The U.S. Federal Reserve is distributing billions of new dollars to cover a possible run on the banks due to fears of a Y2K calamity, officials said Saturday.

U.S. Sen. Phil Gramm, chairman of the Senate Banking Committee, said the money would be on hand if people wanted it, but that he was confident the U.S. banking system would be untouched by computer problems associated with the arrival of the year 2000.

"The Federal Reserve Bank is literally printing up billions of dollars to have available on the belief that people are going to pull cash out of the bank," Gramm said in a news conference.

"We could literally have Americans pull billions of dollars in cash out of the banks and store this cash in their automobile, their home, in their backyards, waiting to see what is going to happen when the date becomes January 1 of the year 2000," he said.

"I want to urge people to put it out of their minds that they need to take all this money out," Gramm said. "We feel very confident about the banking system -- don't worry about the banking system."

Gramm said government officials were concerned that there will be an increase in money-related crimes if people have more cash than usual. Texas Banking Commissioner Catherine Ghiglieri said Y2K scams were already beginning to pop up.

"We had one elderly lady who took out $60,000 and buried it her backyard. The next day it had been dug up. We think it was her family that convinced her to put the money out there," she said.

While Gramm expressed confidence in the U.S. banking system he was less certain about how the problem was being dealt with in Mexico and Central America, which are important U.S. trading partners.

"I'm not worried about us getting this right (because) we've got tremendous resources," he said. "I'm worried about developing countries, and obviously the most important developing country in the world to us is Mexico."

Dallas Federal Reserve Bank president Robert McTeer said the problem could be less pronounced in developing countries because they rely more on cash transactions than electronic.

-- Andy (2000EOD@prodigy.net), May 03, 1999

Answers

"We had one elderly lady who took out $60,000 and buried it her backyard. The next day it had been dug up. We think it was her family that convinced her to put the money out there," she said.

Nope - she had read a coupla midnight gardening threads on this here forum :)

In fact she only just posted as to how to hide the money without letting her kids know where it was.

We failed her as a group.

We are to blame.

-- Andy (2000EOD@prodigy.net), May 03, 1999.

"We could literally have Americans pull billions of dollars in cash out of the banks and store this cash in their automobile, their home, in their backyards, waiting to see what is going to happen when the date becomes January 1 of the year 2000," he said.

It brings a tear to my eye to see a public official so obviously concerned for our mone, uh, welfare - lets just hope that there aren't gazillions of senile old bags out there who are in danger of ploughing their savings into their back garden compost heaps - best leave it all with Ol' Grammps...

-- Andy (2000EOD@prodigy.net), May 03, 1999.

So what does Ol' Grammps do in this "press" release - shoots himself and the Fed in the foot, that's what :)

"I'm not worried about us getting this right (because) we've got tremendous resources," he said. "I'm worried about developing countries, and obviously the most important developing country in the world to us is Mexico."

SO - the good old USA is gonna be OK, oh yes, our banks are compliant, you're money is safe with us, it's those PESKY Mehican Bancos and developing countries [read, unimportant]...

Corrupt Imported [Mehican] Data, sloshing around the system of Banking systems, at rollover, especially if there is a "flight to quality" - with those pesky Mehicans targetting "our" greenbacks in 4Q99 - oh yes, it's gonna be a fine old mess.

Got shovels?

-- Andy (2000EOD@prodigy.net), May 03, 1999.

And how about this for a finale, point blank, in the other foot, whilst hopping about like a Dervish ... :)

"Dallas Federal Reserve Bank president Robert McTeer said the problem could be less pronounced in developing countries because they rely more on cash transactions than electronic."

Ya gotta laff :)

[Bear in mind that these bozos are a fair cross section of those in charge of this unfolding debacle...]

-- Andy (2000EOD@prodigy.net), May 03, 1999.

Hi Andy:

If you stop at Norths site today, you'll see he already has a couple articles on the "Its over , Y2kfixed, Lets forget it, Time to Party" attitude. I'm beginning to wonder if this might become true in banking: no bank run until late fall.

In other words, the idea that Y2K is/was basically a hoax is still spreading - probably even to peoples concerns about money.

When/If(?) TSHTF it will be even worse than many have predicted because less and less people are taking Y2K as anything but a joke.

The "Don't worry about the banking system" line seems to be working very well.

-- Jon Johnson (narnia4@usa.net), May 03, 1999.

Yup John,

Agree, Infomagic said much the same as yourself on a recent thread - when the time comes to pay the piper... well, you know the rest.

It's JQP who will be hurt the most, as always.

Yes, JQP is incredibly greedy what with the 401k scam, the grossly overflated annual returns (which they now EXPECT as a birthright!) - but, that's the way it's been set up, or, rather, JQP has been set up...

These shills will have a lot to answer for at the tribunals.

-- Andy (2000EOD@prodigy.net), May 03, 1999.

Sorry, Jon,

However - room to manouevre for you and me :)

-- Andy (2000EOD@prodigy.net), May 03, 1999.

Ah, but the real question is ... will "we the people" feel very confident about the banking system ... next fall?

Will banks "come clean" with Y2K remediation and testing details, or continue to say ... "don't worry, be happy?"

Diane

-- Diane J. Squire (sacredspaces@yahoo.com), May 03, 1999.