We're all missing the point. It wont be the bug that causes the problems, but simple, predictable corporate greed. All it takes is a trigger, and people will begin to REALLY pay attention. Unfortunately, our media will invariably focus on the most extreme representatives of those that promote preparedness. Here is how things will probably unfold

A FICTICIOUS REPORT FROM CNN

Mobil Oil and Texaco raised the retail price of gasoline forty percent in response to statements from Saudi Arabia and Venezuela that they will have Y2K related production and transportation problems. Mobil Oil representative Jon Doe said we have no choice but to raise prices with such a projected loss of supply. Saudi Arabia and Venezuela represent over 40% of the nations oil supply.

When asked for specifics regarding the Y2K  related production and transportation problems, Doe stated that although Mobils refineries were Y2K compliant, Venezuela and Saudi Arabia were far behind in their remediation efforts. Even though they have yet to see any real manifestations of the Y2K bug, Saudi Arabia and Venezuela were anticipating trouble transporting the oil because of tanker guidance systems failures, on-board computer system problems and problems with seaport traffic management systems.

The stock market plunged in response to the statement. The Dow dropped more than 300 points after the announcement, which came one hour before the close of market. Analysts expect the bloodbath to continue when markets resume trading tomorrow. This will drastically affect everyones earnings stated one forlorn analyst. Tech stocks, whose high prices had so far helped to fend off a correction, also took a hit as many stunned investors attempted to bail out after seeing the Industrials plummet. The partys over stated a jittery investor.

Many researchers and analysts have been predicting severe problems related to Y2K, but this is the first instance where an industry has made price adjustments in anticipation of the problem. Some researchers have been stating for some time that the electrical grid may be vulnerable, as well as the food supply, water treatment facilities, military systems and communications infrastructure. The government has also been stockpiling cash in anticipation of a run on the banks. Dont worry, be happy was the only statement issued by the Federal Reserve.

We take you now to our correspondent in the remote hills of Fleeville and an interview with Dr. Gary North

And the rest is history (or the future, as it were)

God Help us All.

-- ariZONEa (sorry@work.com), May 12, 1999

Answers

"It wont be the bug that causes the problems, but simple, preictable corporate greed."

Thats wishful, (covert polly) thinking. A 40% rise in gasoline would be news for about 24 hours - then its "fill up my SUV time".

"The stock market plunged in response to the statement. The Dow dropped more than 300 points after the announcement, which came one hour before the close of market."

300 points??? No one will notice unless its 3,000 points!!

When the first tanker crashes or major refinery blows up, then it will get CNN coverage.

-- RD. ->H (drherr@erols.com), May 12, 1999.

Nonsense. Oil is a commodity and markets set the prices for commodities. Industries can't. Oil companies are routinely accused of setting prices. Bullshit. Gas wouldn't be selling at an inflation-adjusted lowest level in history if that was true.

It's all supply and demand. When the supply is cut by Y2K, prices will rise greatly, but only if the demand is there. If you get to a TEOTWAWKI scenario, demand may be minimal.

-- Doug (douglasjohnson@prodigy.net), May 12, 1999.

Blunt, Doug, but deadly accurate.

Regards,

-- Mr. Decker (kcdecker@worldnet.att.net), May 12, 1999.

I've long believed that a major rise in fuel prices will be almost inevitable, which is why the "bump-in-the-road" scenario seems implausible to me. I think a 40% rise is a conservative prediction, I'm guessing it at least twice that.

-- Steve Hartzler (s.hartzler@usa.net), May 12, 1999.

What is it with you religious nut-cases. Gary North has tried to quench his end-of-the-world-thirst for some time now. What I really want to know is how many of you people are Gary North followers and can I really trust your opinions whose starting point is from a non- programmer's background. North wants to rid the world of non-prepared non-christians..... I doubt very seriously anyone will repond to this.

Sincerely!, Feller!

-- Feller (feller@wanna.help), May 12, 1999.

RD, Decker, Doug...

Thanks for your input. I chose oil as the product not to offer a prediction, rather, an example. I am aware of market forces and who really controls prices. Tell me that Texaco and Mobil and the other participants don't set prices or pocket as much as they can when supply is affected. In your words, bullshit! You're the supply and demand expert, Doug, explain to the world how oligopolies change the rules. It took about a week for prices to shoot up about 50% here recently, because of a VOLUNTARY cut in production. Who cares if it's the shieks or the oil companies doing it, prices will rise. The point of the post was that it will only take an event that hits people close to home to create a frenzy. Gasoline and oil are such products. How will demand drop, if, as you apparently believe, there will be no problems? Are people going to go out and trade in their SUV's for a Neon? This was meant to represent the start of the real problems. Of course demand would drop in a worst case scenario.

I purposely chose a limited time frame for the market drop so as not to try to guess the severity of a correcton. No one knows. The point here was that this bubble will burst. We haven't outlawed the business cycle. When it does burst, we will be people in debt living in a nation in debt, and in a world of pissed off people who couldn't be happier with our demise. They won't be bailing us out!

-- ariZONEa (now@home.com), May 12, 1999.

ariZONEa....a thoughtful post and one that will happen even if y2k is a bump. There are only five oil companies importing into the US and only seven major companies in the world. Do people really think they do not control pricing to a major extent??

Don't let the flames bother you. You get used to it around here. The polly-types can't stand for anyone to imply there might be a little truth to the supposition that WE JUST DON'T KNOW. We ain't gonna know and can't find out....until it's either egg on your face or just flat too late. Welcome aboard.

-- Lobo (atthelair@yahoo.com), May 12, 1999.

Careful ariZONEa. Piss Decker off and he won't invite you to dinner. :)

-- a (a@a.a), May 13, 1999.

A correction. Saudi Arabia and Venezuela might represent 40% of our IMPORTED oil (which represents a slightly majority of the oil we consume). I don't recall the exact figures, but no way, no how, do Saudi Arabia and Venezuela account for 40% of our total oil supply.

-- Brooks (brooksbie@hotmail.com), May 13, 1999.

If supply and demand control gasolene prices then why has Northern California paid >20% more per gallon than Southern CA for years? Why does competition not solve this problem? Why do we have annual "supply issues" when increased summertime driving starts? As this has been happening since the advent of the auto one would think some bright person might be ready for this annual "shortage". It's gets curiouser and curiouser....

Anybody read about the skyrocketing refining profits that happened to occur in tandem with the "shortage". The "shortage of supply" seems to only affect we consumers as my profits have gone way down since the price gauging started. Btw: Shell Oil led the price increases and did not have any "supply issues". Overnight the value of millions of gallons of stored fuel increased in value by almost 50%. Nice investment!

Supply and Demand ALONE controls fuel prices? ROTFL!

-- SkepticalinNCal (rotfl@youcantbeserious.com), May 13, 1999.

Supply and demand is the controlling factor and the market sets the prices. Gasoline futures are traded on the commodities boards just like corn and pork bellies. If traders perceive that upcoming OPEC cuts will reduce supply, then prices will rise. This is all really quite basic.

Refineries have to re-tool every year to produce more gasoline in the summer and then back to more heating oil in the winter. Temporary shortages in the supply lines cause regional price increases. The recent spike in California gasoline prices was directly attributable to two refinery explosions which reduced supply.

If oil companies set prices, please explain to me why oil was selling for $30 a barrel 20 years ago and it's $18 now. I'm really curious why they set it at $9 last year.

I really don't dispute the point of the original post that something could trigger a severe public reaction. It's just that the specific example is flawed. Oil companies don't set oil prices any more than farmers set wheat prices.

If you don't believe it, I don't care. You're indisputably wrong.

-- Doug (douglasjohnson@prodigy.net), May 13, 1999.