American Farm Bureau's final thoughts on y2kgreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Final Economic Thoughts on Y2K for 1999 and Early 2000 By John Skorburg Senior Economist Public Policy Division, American Farm Bureau Federation
As the New Year approaches, more uncertainty continues to abound around Y2K. Will your electricity work? (Probably) Will your water keep running but have some small glitches? (Possibly) Will the sewers be 100% ready? (Maybe not) Also, what about the stability of the financial markets?
Last week, Jude Wanninski of Polyconomics, Inc. had Senator Bob Bennett (R-UT) as the keynote speaker at his NYC client dinner. For the past 18 months, Polyconomics has been conducting a major Y2K study for its financial clients. Senator Bennett is chairman of the Senate Select Y2K Committee.
The Senator had these thoughts:
1. The first quarter of 2000 will be a slow growth quarter for the economy, based on the uncertainties of Y2K. But, the economy won't know the full effects until late March or April, or later.
2. The old Soviet Union will have the greatest incidence of failure because "the great majority of computers in use were pirated versions of old IBM machines that are the most vulnerable to failure."
3. On the domestic front, power grids are expected to be functioning. More good news includes a surplus of power in the system, based on wintertime usage patterns that are much less than summertime needs.
The rollover into Y2K will begin in New Zealand, giving the USA 15 hours lead-time to assess the first effects. Senator Bennett specifically expressed anxieties about "down the road" when the U.S. may see some problems in dispensing food stamps and welfare checks.
According to Wanninski, he agreed with Bennett and added, "the most serious mechanical problems might be addressed in the first 72 hours, but there will be dark corners that won't be lit up for a really confident assessment of the financial markets for at least another several weeks."
What to Do?
To be prepared, here's a checklist.
The markets will be jittery during the first quarter of 2000. Expect volatility. If you are in the market for the long haul, it's time to ride it out. If you are concerned about the stock market, hedge your bets and move a portion of your investments into T-bonds or the corporate bond sector
Do the obvious for New Year: Keep a bit more drinking water on hand. Have some extra canned goods in the pantry as well. Buy a good flashlight with batteries. Have wood to burn in the fireplace. Keep a bit more cash on hand; perhaps double your normal amount. Fill your car up with gas, before New Years Eve. Finalize your investment portfolio, right after Christmas, and stick with your decisions for the first quarter of 2000.
There is still time to prepare in this manner. Take some time to think about your investments and make the best decision based on the amount of risk you are willing to take. In the long haul, the stock market is still the best investment on earth. Just make sure you are prepared for the potential volatility of the next several months when uncertainty will still abound.
-- marsh (firstname.lastname@example.org), December 22, 1999