Y2K Poll on AOL says 50% think it appropriate to stash $2000 for Y2K

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I just ran across a current poll on AOL in which 50% of 5500 participants think it would be advisable to have $2000 in cash on hand for Y2K. All you fuzzy headed pollys floating around on your little pink clouds of denial should ask yourselves what will happen if 50% of the people in the U.S. actually withdraw $2000 apiece in cash from the banks.

Time's up, kids. If anything anywhere near this happens, it will destroy the banking system without a doubt. 5500 participants in a poll is enough to give us a pretty good idea how the country feels about this.

The time to cash in your digital wealth is now.

-- cody varian (cody@y2ksurvive.com), September 27, 1999


No problem. Most of us don't HAVE $2,000 in the bank to withdraw. And if we did, we'd spend it on preparations...

-- Mad Monk (madmonk@hawaiian.net), September 27, 1999.


It's an interesting figure, but you need to be VERY careful before describing this as "a pretty good idea of how the country feels about this."

This was NOT a scientifically conducted, Gallup-style, poll of randomly selected participants. Instead, it was a self-selected group of people who felt strongly enough about the topic to take the initiative to participate in the AOL pseudo-survey.

I'm not trying to criticize AOL or to discount the significance of the $2,000 figure -- but you can't extrapolate these results and claim that the whole country will behave in a similar fashion.

There have been three or four "credible" surveys this year, in which a smaller percentage of people have indicated that they intend to withdraw some amount of money. I forgot what level of withdrawals, or exactly what the percentage of the population gave such an indication - - but it was high enough to raise the obvious concern about clobbering the liquidity of the banks.


-- Ed Yourdon (HumptyDumptyY2K@yourdon.com), September 27, 1999.

Mad Monk,

Here's a variation on your argument: the average middle-class yuppie DOES have a net worth exceeding $2,000 -- but it's not in his savings account. What kind of idiot would leave money in a savings account at interest rates of 2-3%, when he can invest it in ponzi.com and make three zillion percent in stock appreciation?

It used to be that middle-class people had the bulk of their assets tied up in their home equity -- but now you can use that as collateral to get 125% of the assessed equity of your home, and put all of that in the stock market, too!

This leads to an obvious conclusion: if the public gets spooked by Y2K, the first thing they'll do is dump their high-tech stocks, put the proceeds in their brokerage firm's cash-management account, and then start converting that to cash or gold or whatever.

If people get money out of their traditional bank, it will probably be relatively small amounts -- OR it might consist of cash advances (aka loans) against their Visa and Master Card accounts.


-- Ed Yourdon (HumptyDumptyY2K@yourdon.com), September 27, 1999.

Beware, October is right around the corner! Maybe some of these good folks will start pulling their money out of the stock market and doing what you say. Gold was up apparently $14.00 today, so someone is buying.

-- Gene on Cape Cod (carvgene@gis.net), September 27, 1999.

Ed: You make a good point about how scientific or not this poll is but judging from the answers to the other questions, it wasn't exactly stacked with doomers, which is why I was surprised at the 50% figure. I suspect that most people will try to have at least several hundred dollars in cash handy for Y2K, which in itself will put a considerable strain on the banking system. It's not at all hard to see how easily a bank run could happen.

-- cody (cody@y2ksurvive.com), September 27, 1999.

* Market CRASH / Bank Runs by 12/99 at the latest.

* Major Oil problems by 1/00.

Y2K is Real. Y2K is only a sub-set of the Millenium Problem.

-- Dan G (earth_changes@hotmail.com), September 27, 1999.

I saw a post on this forum or Y2K Newswire quoting Consumer's Union as recommending each family keep $500 to a $1000 in cash. Seems to me,that given the low percentage of actual cash in the system, this relatively small amount would be enough to cause a TILT in the banking system--even with the additional dollars being printed.

A couple of posts recommend bills with small denominations. Excellent idea. Get a few rolls of coins as well. If you choose to store some cash, start now, do not wait until November or December. I am not a gold bug or a terribly sophisticated investor, but I did put stop loss orders in on my few remaining individual stocks. I will take the tax problem. I take 20s from the ATM or cash back at the store and keep the 10s 5s and 1s that come back to me in change. Relatively painless.

-- Nancy (wellsnl@hotmail.com), September 27, 1999.

Dan G: How about some reasons why you think the way you do about Y2K? Not that I disagree with you necessarily.

-- cody (cody@y2ksurvive.com), September 27, 1999.


The average (or perhaps median) family income in the U.S. is approx $35,000 per year. That works out to just under $3,000 per month. When you take out taxes, Social Security, insurance, retirement contributions and other witholding items, the take-home pay is probably closer to $2,000 per month. That works out to approx $500 per week -- so the figure that you recall seeing somewhere represents approx 1-2 weeks of spending money for the average family.

Now keep in mind that a lot of that money would normally be spent in the form of checks -- e.g., the typical family might buy their groceries with cash, but would normally pay the phone bill and the rent with a check. Thus, if the banks convince consumers that checks will still "work" and if the average citizen ends up being concerned primarily about non-functioning ATM machines, perhaps they'll only withdraw 1-2 weeks of cash. On the other hand, they might perceive the need for additional cash for the New Year's festivities, and they might worry that some merchants won't accept checks ...

The psychology of this whole thing is going to be pretty interesting to observe...


-- Ed Yourdon (HumptyDumptyY2K@yourdon.com), September 27, 1999.

I agree with Ed Yourdon's scenario for middle and upper middle class with current stock holdings. A move to cash accounts at their brokerages, then to checking accounts then to cash. How much and how fast will demand on this:

One observation about polls, scientific or not, they gauge public perception at a single moment in time. A fleeting instant. Witness political polls that can shift decisively with the wiff of one small skeleton in some candidates closet spreading across the front pages and evening news. Likewise with polls about how much money, if any, people are going to withdraw between now and January 1st. Right now the air is clear enough to 99.5% of our fellow Americans so that $100 to $2000 seems a prudent amount to withdraw as we near the date change. However, the first wiff of Y2K smoke in the theatre and witness a ton of folks sit bolt upright in that poll. Show fire in the form of a major disruptive computer failure, and watch panic send that poll number to the moon, and citizens racing to the nearest ATM. So much for taking polls and there meaning. The FED can set aside and extra $150 billion based on today's polls, but if the demand in a crowded theatre is for $400B, the early polls don't mean diddley sqwat. I just noticed in one of our TB2000 posts today that the FED is upping their stash to $200B. Do

-- greg (walshbros1@aol.com), September 27, 1999.

Believe it or not, the company which sells me TSA's sent out a general mailing suggesting that, due to the anticipated sell off of stocks pre y2k, we might consider removing some funds, and increasing the proportion of "liquid assets" in our portfolios.


-- Al K. Lloyd (all@ready.now), September 27, 1999.

The problem here of course is the AOL factor. When you are talking about people who are on AOL, yeah, they might think $2000 will be enough. But intelligent people are planning on taking a lot more than that out.

-- @ (@@@.@), September 27, 1999.

Nancy: Do you like to mudwrestle?

-- King of Spain (madrid@aol.cum), September 27, 1999.

Ed Yourdon makes an excellent point. Pay particular attention to the OR:

"If people get money out of their traditional bank, it will probably be relatively small amounts -- OR it might consist of cash advances (aka loans) against their Visa and Master Card accounts."

I bet that most people under 40 don't have much money in their savings accounts-- if they have a savings account at all. On the other hand, most of us have credit cards and may have the ability to take out more than $2,000 in cash at the ATM or across the counter over the course of a few weeks. But the power of plastic doesn't stop there: if people panic, they are going to put it on plastic and get lots more than they would have if they were using cash. So what happens if the January (or February, etc.) statement comes and most credit card holders can not make those minimum payments and extra cash-advance financing charges. What's this going to do to Citibank (and other credit card companies), to electronic money, and how will this impact the U.S. and global economy?

Sincerely, Stan Faryna

-- Stan Faryna (faryna@groupmail.com), September 27, 1999.

KOS, be still my heart. I guess this means I have been initiated?

-- Nancy (wellsnl@hotmail.com), September 28, 1999.

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