Drudge on stockpiling of cash

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I hope this is not a repeat but I couldn't find this posted yet: See Drudge report, "Thousands stockpile money for Y2k."

-- Claire (readingdrudge@aol.com), October 06, 1999


URL? Link? Mudwrestle?

-- King of Spain (madrid@aol.cum), October 06, 1999.

Wallets likely will be loaded -- just in case for Y2K

Richard Burnett of The Sentinel Staff

Published in The Orlando Sentinel on October 3, 1999.

It's midnight 1999 -- do you know where your money is? For some people, the answer will be right in their back pockets or stashed away somewhere at home. Unless they've been robbed. Despite the best efforts of bankers and government leaders to convince people otherwise, thousands are stockpiling cash to hedge against money woes that might erupt from the Y2K bug. Recent surveys indicate as much as one-quarter of the U.S. population plans to sock away possibly thousands of dollars. And while banks say the bug poses little threat, they're still preparing for the worst-case scenario: last-minute Y2K lines, such as those at home-improvement stores during a hurricane threat. The Federal Reserve Bank plans to have $200 billion available in late December -- $50 billion more than usual. Individual banks have contingency plans, such as special teams to monitor currency levels, to help them respond quickly if demand for cash skyrockets. But all those efforts would be pointless if every customer rushed in at once to take out a huge amount of cash. There simply would not be enough to go around. Bankers hope to preempt that kind of debacle by touting their progress in solving Y2K, the programming flaw that could cause many computers to read the year 2000 as 1900 and malfunction or shut down on Jan. 1. After conducting a massive Y2K-related audit, federal regulators say more than 99 percent of the nation's financial institutions, automated-teller-machine vendors and service providers have cleared the Y2K hurdle. "For banks, the Y2K challenge that remains is primarily a psychological one, not a technological one," said Clint Swift, a Y2K specialist for the Bank Administration Institute, an industry think tank in Chicago. Despite banking's progress, mainstream sources such as the Red Cross and President's Y2K Council still recommend that people gradually put away about one week's worth of cash. The reason: There is a chance that a few banks or ATMs may be hit by temporary glitches, such as computer errors or power outages, that would interrupt the cash supply. Even the Federal Reserve System, which controls the nation's currency supply, says people should have cash ready for the long holiday weekend. The psychology of Y2K -- how people react and behave as Jan. 1 approaches -- is difficult to predict. Financial planners say current thinking runs the gamut from indifference to fear. "I've talked to some who say they'll accumulate large amounts of cash and consider serious liquidations," said Randall Deane, a financial planner and stockbroker in Orlando. "But I've never talked to someone who has actually done it. Of course, it's a natural tendency for people to procrastinate about making big decisions." Deane said nobody should be closing their checking, savings or retirement accounts because of Y2K. They face greater financial hazards, such as penalties, lost interest or even robbery, from cashing out than from a highly improbable Y2K meltdown, he said. Still, some people have started moving money. Janis Hoover, a human-resources consultant from Apopka, cashed out her 401(k) account earlier this year, paid off most of her debt and began saving some cash at home. The decision to close her 401(k) account was only partly based on Y2K, said Hoover, who manages a Y2K Web site at www.y2kcentralflorida.com The account shrank in recent years because much was invested in her former employer's stock, which was plummeting, she said. So, when the company closed its Orlando office and laid off employees, she decided to bail out. It was a unique situation and a personal decision, not one she would recommend for everyone. "When people ask me should they take money out of the bank because of Y2K, I encourage them instead to pay off as many bills as they can and get out of debt," she said. "That will lessen their exposure to inflation and high interest rates if Y2K does have some dramatic effect on our economy." But Hoover hasn't given up on the banks. That's where she's keeping most of her money. "The chance of banks going under is real, real small," she said. "But I do see a potential for runs on the bank, when people realize at the last minute there may be some risk to their money." The more people prepare ahead of time, the less likely we'll see lines at the banks in late December, said Roleigh Martin, a computer consultant in Edina, Minn., and Y2K expert for the Minnesota Legislature. He suggests that people have their "Y2K money" issued in traveler's checks, which are federally insured and replaceable if stolen or lost. Also, American Express Corp., the largest issuer of traveler's checks, says its systems are Y2K-ready. And if you sit on a large amount of cash, you are much more susceptible to theft. "If you can avoid hurting the banks and still protect yourself with a Y2K cash solution, then you have the best of both worlds," Martin said. So far, there is little evidence America's apprehension about the Y2K bug will trigger pervasive bank runs and survivalist hysteria. A recent survey by the National Science Foundation and USA Today found that nine out of 10 people do not plan to close their bank accounts. But almost half expect some form of banking disruption from Y2K. "I just don't consider panics or bank runs to be a big concern," said William Ulrich, an author, Y2K consultant and president of Tactical Strategy Group Inc., a high-tech consulting firm based in Silicon Valley. "That would only happen if people suddenly found out the government has been trying to pull the wool over everyone's eyes about Y2K," he said. "So, the more forthcoming the government is, the less likely we'll have those kinds of problems." [Posted 10/02/1999 11:26 PM EST]

-- claire (readingdrudge@aol.com), October 06, 1999.

Thank you!

-- King of Spain (madrid@aol.cum), October 06, 1999.

King of Spain: You're welcome, but we'll have to forego the mudwrestling--I look terrible in brown.

-- claire (readingdrudge@aol.com), October 06, 1999.

BBBWWWWAAAAHHHHHAaaahahahahahahahhahahahahaha! For those who can read between the lines, that article says it all. LOL!

-- Ashton & Leska in Cascadia (allaha@earthlink.net), October 06, 1999.

He suggests that people have their "Y2K money" issued in traveler's checks, which are federally insured and replaceable if stolen or lost.

Since when?? A travellers check is just a promise from the issuing company to pay.

That would only happen if people suddenly found out the government has been trying to pull the wool over everyone's eyes about Y2K

Oh brother! If that's the criteria then the banks are doomed.


-- TECH32 (TECH32@NOMAIL.COM), October 06, 1999.

Yadda yadda yadda. Still quacking about people who plan to take their cash out. No hard data on how many already have! That's what I'd like to know. I know I have already withdrawn "more than usual" and I know others who have. I know a lot of you folks have. They don't seem to be forthcoming with the fact that it's already happening! Can this somehow be extrapolated from any of the numbers that the Fed puts out?

-- Don Wegner (donfmwyo@earthlink.net), October 06, 1999.

Sheesh... "Janis Hoover, a human-resources consultant from Apopka, cashed out her 401(k) account earlier this year, paid off most of her debt and began saving some cash at home." Talk about taking risks. Sure hope they have good security now that this stupid Florida newspaper has put it on the Internet in the same article where they warn about robbery.

-- @ (@@@.@), October 06, 1999.

If you check out the Fed's current releases web page (www.federalreserve.gov/releases/H6/Current/) you'll see that there's no loss of $$$$ from money funds, time deposits, demand deposits, savings deposits, etc, etc. Conclusion: at least up until August (latest stats) there MAY have be/may be widespread withdrawing of $$$$, but it is only anecdotal, episodic, AND "localized". . .

-- Dewer Dye (qwerty@!!!!.xnyet), October 06, 1999.

I kinda liked Scrooge McDuck's (Donald's filthy rich uncle) cavernous vault where he kept his dough....guess he felt better having it in his own place than in the bank......gotta watch out for them Burglar Brothers though!

-- Jay Urban (Jayho99@aol.com), October 06, 1999.

Some banks may (will) fail, but the FED has been working on this hard for a long time. Printed lots of pretty new paper, audited all the member banks, forced acquisitions, changed policies to forstall a run on banks. Generally speaking, I am NOT going to pull my money out of banks.

HOWEVER, I find the probability high that all that money the fed has printed to forstall runs on banks is large bills. What happens if 100 people go to MacDonalds for a Big Mac and give them a $100 bill? pretty soon, nobody can make change. I am going to have $1000 of mostly small bills (already got $200). Since I am already self sufficient for 60 days (food, water, generator, fuel, Medicine, vitamins, BOOKS) I think that will be sufficient.

I would be interested in being demonstrated to be wrong.

-- ng (cantprovideemail@none.com), October 06, 1999.

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