Greenspan comments on Y2Kgreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Cut from recent testimony by Alan Greenspan:
BENNETT: "So, having made that speech, let me go to that other subject that will surprise you not at all. I want to talk to you a little bit about Y2K. In the special committee which I chaired on Y2K last Thursday, the State Department's inspector general told our committee: 'Y2K-related disruptions in the international flow of goods and services are likely.' I believe we have the Y2K problem under control in this country to a degree that I would not have anticipated when the special committee was created.
"We have done a better job of getting that under control than I thought we would, but overseas we are seeing some of the challenges that we had feared. Her aggregate data that she shared with our committee showed that nine of the 39 industrialized nations surveyed were at medium- to high-risk of experiencing failure in telecom, energy and water sector, and 52 of the 68 developing nations had a similarly high level of risk in breakdowns in these sectors.
"Now you've talked here about the impact on the United States of the Asian flu in our agricultural sector. I want to use that as the analogy to talk about impact in the economic, the financial sector of a Y2K problem of this kind, and I refer you to the latest Merrill Lynch study where they talk about a major liquidity problem arising in certain parts of the world because of Y2K.
``Now I share with you and take every opportunity I can to tell people, don't take your money out of the bank in the United States in anticipation of Y2K here. That would be a foolish thing to do. But if international investors are withholding liquidity in international areas because of Y2K concerns, have you had any focus in that area, and do you have any information you can share with us?''
GREENSPAN: "Well, Senator, as we've discussed before, we are confronted with what is truly a unique event. Nothing of this nature has ever happened before, and we are starting from scratch in trying to understand all of the potential.
"Nevertheless, I agree with your conclusion about the United States. We have picked up the rate of pace to adjust for the possibilities of problems, and I think, I feel far more comfortable than I did six months ago.
"It is also true, as I recall in the presentation to your committee, that financial areas were perceived to be doing a good deal better than some of the other areas of the foreign economies, and that's important to us because while we are acutely aware of all of the problems that can arise, including the liquidity type of issue which Merrill Lynch is raising, we think we're sufficiently in position to address those issues.
"Indeed, one of the things we follow very closely is the implicit interest rate that is being charged over the new year, because that is not a bad measure of the extent of financial stress that the markets are perceiving as likely to emerge as a consequence of that. And indeed we do see some of what you call butterfly effects where interest rates sort of go up and down. They have not yet reached a point where there is evident real stress in the system. So we can conjecture a good deal about all sorts of problems but people in the marketplace are feeling increasingly more comfortable, as best as I can judge.
"That should not mean that we can become complacent on this issue, but I do think that a remarkable amount of effort has been put in to assure the systems in the United States, certainly in the financial areas, and I would reiterate what you just said with respect to banks, Senator. The most risky activity that people can take is to take all their currency out of their banks because there will be a new industry that will emerge as a consequence of that, which will be millennium thievery.
"And I think that you have a far greater chance of losing your money if you take it out than if you leave it in, and I think that there's going to be a fairly general set of procedures where accounts were going to be made available to everybody, so that in the very, very remote chance that computers break down, and wipe out the evidence of people's deposits, that there is physical material.
"I think that it's a concern which is being very fully addressed, and I see that concerns that a lot of people have about what's going to happen to their banks is, at this stage, far more adverse than I think is even remotely going to be the case, and I suspect, and some of the evidence does show, that the amount, the number of surveys that suggest that people are going to want to draw out cash is beginning to move downward.
SEN. PHIL GRAMM, R-TX: ``Well it seems to me we ought to be encouraged that in the year 1000 they had to add a new digit, and you had no evidence of economic disruption. And then the millennium before, we had dates going down, and then they started going up, and yet no evidence of disruption or chaos in the economy, so if they could do it then, surely we could deal with it now, it seems to me.''
BENNETT: ``I have a relative, Mr. Chairman, if you'll indulge me, who has a tombstone that is not Y2K-compliant. When her husband died, they put in two dates, one for his birth date and death date, and they put her birth date, and then her death date they carved in ''19,`` and she's outfoxed them by outliving them, and they're going to have to putty it in and put in ''20`` when she finally dies.''
GRAMM: ``Well she still has another six months.''
-- Mr. Decker (email@example.com), July 29, 1999
Thanks KC. I think the Chairman made some great points.
I'm a little taken back by how clueless Gramm is though : )
-- Michael Taylor (firstname.lastname@example.org), July 29, 1999.
``Well it seems to me we ought to be encouraged that in the year 1000 they had to add a new digit, and you had no evidence of economic disruption. And then the millennium before, we had dates going down, and then they started going up, and yet no evidence of disruption or chaos in the economy, so if they could do it then, surely we could deal with it now, it seems to me.''
Yep, here's another great candidate for the stupidest thing ever said about y2k. Let's get this one off to Duh 2000 right away. And remember this guy still wants to be our President. Yikes !
-- Yan (email@example.com), July 29, 1999.
Yes, that's right. The United States is an island that cannot possibly be adversley affected by Y2K or banking failures overseas. The Euphoric bubble will rise indefinitely in this country and be a wall against problems they are suffering from, even though the current economic and market situation makes no logical sense here.
And also please remember that taking your money out of the bank is the single most dangerous thing you can do. The moment you take it out and keep it at home, the Y2K thieves will break in and steal it, guaranteed.
Besides in the ridiculously remote chance that the 'puters do crash and your account data is lost...you will have the hard physical material that the bank and the FDIC WILL NOT recognize as proof of your previous account status as those documents can of course be forged and doctored.
Anyone find this crap becoming offensive to our collective sensibilities?
-- INVAR (firstname.lastname@example.org), July 29, 1999.
Why would it be a "foolish thing to take your money out of the bank?" I'm being called a fool because I choose to do whatever I want with MY money? The banks are acting like it's their money! I took all my money out over a year ago, I guess they didn't miss it.
Gee, I didn't know they had computers in the year 1000! STUPIDITY!
-- ~~~~~~ (~~~~@~~~.com), July 29, 1999.
Wow, politicians spouting more doubletalk and lies. How unusual.
-- (email@example.com), July 29, 1999.
I'm surprised Gramm didn't say anything about changing computer dates back to 1972... that seems to be the "solution" I keep hearing from senators, and reps... duuuuuuuuh.
Gramm = Pinky
Bennett = The Brain
Thanks Mr. Decker, life looks SO much brighter now, but it doesn't look too bright in DC...
growlin' at C-span on TV....
-- Dog (Desert Dog@-sand.com), July 29, 1999.
All of the computers in the year 1000 worked just fine.
-- mabel (firstname.lastname@example.org), July 29, 1999.
Gee, how do you suppose the guys in 10 B.C. were smart enough to base their calendar on a yet unborn Jesus in the year 1 A.D. (later corrected to 3 A.D.)????????
Memo to Phil: Sit down and shut up!
-- Hawthorne (email@example.com), July 29, 1999.
Thank you Mr. Decker,
Quite Interesting. I'm intrepid that Greenspan would make this kind of statement NOW in front of a bunch of senators who are simply idiodic after he stated Last Year that ther must be 100% Compliance in the banking industry. The Banking industry is GLOBAL, no? Can anyone vouch for the rest of the industrialized, or undeveloped world banks?
Just doesn't make sense.
-- Thomas G. Hale (firstname.lastname@example.org), July 29, 1999.
Dear Mr. Maestro
Thank you for the thoughtful music. It is rather fitting to have song when reading one of Mr. Decker's posts..
-- Shakey (email@example.com), July 29, 1999.
If you read it again, you will note that Greenspan prefaced everything with, "I think". CYA!!
-- Hannah (Hannah@Colonial America.com), July 29, 1999.
Well, in response to Mabel, it seems to me then that all we need to do is go back to the abacus as in the year 1000.
-- Sen. Gramm (firstname.lastname@example.org), July 29, 1999.
Actually, if you read it again you'll realized that Greenspan didn't even come close to addressing Bennett's concerns. One has to hope that Gramm was joking, but who the heck knows. Now the big question, by posting this does this mean that Mr. Decker has become a GI?
-- Dave (email@example.com), July 29, 1999.
Sure Dave. Like a mushroom in the desert.
-- Will continue (firstname.lastname@example.org), July 29, 1999.
(I love those desert mushrooms!)
-- ---===--- (Tic@toc.boom), July 29, 1999.
Like a cockroach under my shoe.
-- King of Spain (email@example.com), July 29, 1999.
Let's see, what is Mr. Greenspan's job? To run the Federal Reserve. Now what is in the best interest of the Federal Reserve? To prevent panic? Of course no one would tell a little white lie before the Senate, now would they??? Nah....
-- Mara Wayne (MaraWAyne@aol.com), July 29, 1999.
Or one huge hell of a lie, since he's not under oath. He could tell Gramm and Bennett that the Fed has secretly stashed away $5 trillion in $10,000 bills, and that he has a dozen rabbits up his ass. It doesn't make any difference. As Gary North loves to say, the computers don't care what Greenspan says.
-- Prometheus (firstname.lastname@example.org), July 29, 1999.
What appropriate music for this thread. Isn't this the old song, "All Around the Chicken House the Monkey Chased the Weasel?" I like music that accompany posts, especially when it fits.
-- gilda (email@example.com), July 29, 1999.
The music is a medley of tunes from Monty Python's Flying Circus.
-- (firstname.lastname@example.org), July 29, 1999.
Like him or not, Alan Greenspan is arguably the most powerful man on the planet. As goes the U.S. economy, so goes the world. More than any other single individual, Greenspan can influence the U.S. economy. While this may come as a surprise to some, Greenspan did not learn about Y2K from Gary North or the back of a cereal box. It is difficult to question his access to information.
Greenspan is saying he feels better about the Y2K readiness of the U.S. financial infrastructure than six months ago. His opinion is shared by the mainstream press, the IT trade press, many IT experts, the FDIC, NERC and a host of others. If this is a conspiracy, folks, it is the most successful one of modern history.
-- Mr. Decker (email@example.com), July 29, 1999.
Roachboy, it's a conspiracy of stupidity and narrowmindedness. Maybe the banking infrastructure in the US is coming along fine like these people say. But if the banking and other economic infrastructure of other countries is stuffed, then the US finance system is stuffed. And it is "difficult to question Greenspan's access to information", but it not difficult to question the sincerity of his statements about robbers being a greater threat than y2k.
-- number six (Iam_not_a_number@hotmail.com), July 29, 1999.
Go and read Bennett's original question to Mr Greenspan again. The question had to do with the effect the lack of preparation [of y2k] that the developing countries would have on the economy of th USA. Then reread Greenspans answer. Pure spin because he knows the removal of cash from the banks is one of his biggest nightmares. He never even touched on Bennett's question. Not like him. Spin, spin, spin.
-- thinkIcan (thinkIcan@make.it), July 29, 1999.
>> Greenspan is saying he feels better about the Y2K readiness of the U.S. financial infrastructure than six months ago. His opinion is shared by the mainstream press, the IT trade press, many IT experts, the FDIC, NERC and a host of others. If this is a conspiracy, folks, it is the most successful one of modern history. <<
A conspiracy is not required to explain why people of common interests or common background act in common. Where such commonality exists, people align their actions without even consulting one another.
It is not even necessary to hypothesize a desire to mislead. But, in an event of such complexity as Y2K, all that is necessary is a desire for certainty that exceeds the supply, and a preference for information that reinforces one's hopes or desires. This is equally true on both sides of the debate. In which case it is a preference for information that confirms one's worst fears.
Mr. Greenspan is doing his best in an uncertain situation. But he is guessing almost as much as we are.
-- Brian McLaughlin (firstname.lastname@example.org), July 29, 1999.
With all due respect, Mr. Mc, he is "guessing" with far better information than I have. And you?
-- Mr. Decker (email@example.com), July 29, 1999.
I cannot believe Senator Gramm could be so obtuse. Am also curious about your reason for posting this particular snippet, Mr. Decker.
>>Like him or not, Alan Greenspan is arguably the most powerful man on the planet.<<
Your comment "sounds" a bit glib. Doesn't that observation make you just a bit uneasy? I'd guess that Mr. Greenspan is a much better person for his current position than, say, Mikhail Gorbachov(?), but power corrupts... In that regard, a conspiracy of one is sufficient.
Brian's point about the nature of conspiracies is well-spoken. Care to comment on that, Mr. Decker?
Finally, what do any of us know about the quality of the information Mr. Greenspan has at his disposal? Powerful people tend to become insulated, and to hear what they want to hear.
-- Elbow Grease (LBO Grise@aol.com), July 29, 1999.
The "players" involved are too diverse to assume a common interest or background. Why don't cartels last? There is an incentive to cheat. There is profit in good news and bad news. If I had really bad "Y2K" news and could control its release... I could spend the rest of my days teaching economics in my own endowed chair at some ivy-covered university. Fortunes will be made and lost over Y2K.
Whatever one's preference for certainty, I can assure you it is outweighed by the desire for profit. So, Mr. Mc, do you short the market with your information? Do speculate long? There's money in objectivity.
My comment on Greenspan was not meant to be glib. It was a common observation. Thus far, I'd say he has done a good job at the helm of the central bank. Based on his record, I'd also wager his priority is the stability of the financial system. Do you have information to suggest otherwise? Finally, I do have some idea of the quality of information at Mr. Greenspan's disposal. The central bank is critical to our national security. If my personal contacts are correct, Mr. Greenspan receives data from NSA, CIA, DIA and other intelligence agencies in addition to the data flows from the regional reserve banks, private think tanks, academia, the administration, Congress. Like most policy makers, the problem may be too much information rather than too little.
-- Mr. Decker (firstname.lastname@example.org), July 30, 1999.
And Allan Greenspan is Mr. Establishment, and as such he has HUGE vested interests, including the avoidance of bank runs et al.
But come the Jan-March time frame not even Mr. Establishment himself will be able to spin the fact that the international banking system is stuffed.
-- George (email@example.com), July 30, 1999.
Like a cockroach in a straw.
-- Will continue (firstname.lastname@example.org), July 30, 1999.