PROTECTION AGAINST THE MILLENNIUM MENACE - RESULTS

How much cash do you plan to have on hand to protect your family when the Y2K Bug bites on December 31, 1999?

$250 to $500..,,,,...,,,,,,,3%

$500 to $1,000...........4%

$1,000 TO $2,000......... 11%

$2,000 to $5,000.........19%

$5,000 to $10,000.........25%

Greater than $10,000........38%

Here is another stark indication that the FRB is totally out of touch with reality.

Over a week ago the FRB announced it was going to increase the amount of currency in the hands of the public in anticipation of a greater cash need - due to the looming Y2K problem. The FRB stated it would increase cash in circulation by another $50 Billion - which is a 30% increase over what is now circulating. The official comment also mentioned the increase represented an additional $500 in cash per family.

Where on earth do the supposed financial leaders of the USA came up with a figure like that?! Is the family cash needs estimate to confront the Y2K Bug based upon any research or was it simply pulled out of the air?!

Our recent survey specifically addressed the question of cash needs vis-`-vis the Millennium Menace. The survey results noted above CLEARLY belie the FRB's pitifully low estimate of a mere $500.

Only 3% of the respondents felt $500 was sufficient to carry them through the Y2K trials. On the other hand 63% of the respondents poignantly indicated that more than $5,000 was required to meet possible dangers resulting from the Y2K problem. In fact 38% flatly said they need MORE THAN $10,000 IN CASH TO MAKE THEM FEEL COMFORTABLE.

Perhaps the FRB inadvertently "lost" a "0" when it was determining the cash needs of the public?! Instead of $500/famliy, they might have really meant $5,000/family. Otherwise, any reasonably intelligent and prudent person must conclude the FRB doesn't have a clue when it comes to the possible severity of the looming Millennium Mayhem.

$500 INDEED!

From goldeagle.com

-- Andy (2000EOD@prodigy.net), August 16, 1999

Answers

I notice that 0% are going to have less than $250 on hand. That would appear strange in a country where more than half the population is in debt.

I find it hard to believe that a poll of a supposedly random sample of people would turn up a result so skewed towards multi-thousand dollar withdrawals. Was it taken amongst participants at a Goldman- Sachs board meeting?

Even $250 would require an overdraft for tens of millions of Americans. Does anyone have any statistics concerning the distribution of wealth (or lack thereof) in the U.S. ?

I am quite certain that the average amount that families can afford to take out is much nearer to $500 than $5,000 - and it is the average that counts here.

-- Y2KGardener (gardens@bigisland.net), August 16, 1999.

Sorry Y2kGardener,

I should have made it clear that this came from a straw poll of goldbugs om this site, perhaps they have more disposable income than most, however the comments are interesting - as in the fictional notion that an extra $50B will stave off bank runs.

I don't have a wife and kids to look out for, if I did then the $500 the fed plucked out of thin air (they're used to doing that [fiat funny money]) would not cut it at all. Add at least a 0 to that... and if enough families do this... and if enough businesses stop depositing cash to the banks...

-- Andy (2000EOD@prodigy.net), August 16, 1999.

i'd say this poll is heavily skewed also. this forum consists of many/(most?) members who believe in the seriousness of y2k. most people, at this point, do no.

-- lou (lanny1@ix.netcom.com), August 16, 1999.

The only problem with the numbers in that poll is that most people are idiots, and like to answer inane questions. When it comes to actually DOING anything....weelll maybe I'll get around to it next week. Whatever.

-- CygnusXI (noburnt@toast.net), August 16, 1999.

Well, let's look at these numbers more closely.

First off, we are talking about "cash" money, paper and coins. The $50B that the Fed is talking about is all they *can* supply. And even that will require that a lot of paper money that would have been retired due to wear and tear will be left in the system for a while longer. The Treasury just can not produce any large extra volume of cash with the printing/minting system now in place. Everything has been set up to basically just replace the old money with new money every day/week. So, this is all that the Fed can offer up, *at best*. Sure, it's a ballpark number, but all these cash in circulation estimates are ballpark guesses.

For instance, it is "estimated" that there is about $600B in circulation worldwide, but most of that is *outside* the country in foreign banks, businesses and private hands. The estimate for cash in use here at home is $200B +/-. So, using the common estimate of 100 million families here, $50B does come out to $500 per family, and using a figure of $200B in circulation right now, $50B is 25% more than that so we are still in the ballpark.

However, not only families will want to stock extra cash. A lot of businesses will, as well, to pay employees and others if the banking system is giving them fits. Thus, if 100 million families *and* businesses decide to hold onto cash, how much on average could they take out? Certainly not the whole average amount, which would be $2,500 each, because that would drain every bank and cash register in the country. So how much could they take? Maybe $1,000 each, maybe. Is it possible that the average demand would go higher that that? Sure, much higher. This is just a small example of why the banking system can not handle any real extra demand for cash, let alone a run.

-- Gordon (gpconnolly@aol.com), August 16, 1999.

Ray,

I've heard rumours they are minting up $5 COINS... God help us...

-- Andy (2000EOD@prodigy.net), August 16, 1999.

I think this poll was taken of CEO's and Y2K project managers, who want to be waaaaay out of town when TSHTF. :-)

-- sue (deco100@aol.com), August 16, 1999.

Andy,

Here is a link to that $5.00 coin you were talking about. George Washington Commemorative

Mike

-- flierdude (mkessler0101@sprynet.com), August 16, 1999.