It seems that everyone out there has assumed that the only time the public could "panic" is before the rollover.

In all probability, nothing will happen before the end of the year because the public is anesthetized. However, what if there are a few major bank failures after the rollover? It will only take one 15 second video clip on CNN showing angry customers fighting in lines at the bank to set off a bank run, regardless of whether or not their own bank is at risk.

That is why I believe that by hoarding cash now, you will be doing a public service! Here's why:

First, by removing your money from the bank now, you will be better able to make rational banking/investment decisions ater on, since you are insulated from systemic risk due to Y2K failures. If TSHTF and your cash is safely hidden and secure, you can choose to do nothing and just wait.

However, suppose something happens and the public panics unnecessarily after Jan. 1 and you recognize this. Being the obsessed Y2K fanatic you are, you use your superior information network and learn that certain banks are indeed still OK and it's safe to re-deposit your cash.

Furthermore, if such a situation did arise, interest rates should be much higher in an effort to induce people to leave their money in the bank, or perhaps bring it back if they took it out earlier.

What an opportunity! Those who are panicking won't care how high interest rates are, or what their local banker says - they'll just want their money. But you and I will be acting calmly and rationally because we protected ourselves in advance. Furthermore, we have superior information.

YOUR BANKER WILL LOVE YOU when you come in to their bank to DEPOSIT money while there is a line of customers out to the parking lot waiting to get whatever cash they can out of their accounts. And they'll pay you a fantastic rate of return for your civic mindedness!

I love capitalism.

-- Clyde (clydeblalock@hotmail.com), December 10, 1999

Answers

I LOVE IT!! But don't forget to stop at your broker's and by up all the Yahoo, Lucent, MS, etc. for pennies on the dollar!! Thanks for the silver lining...I needed it today.

Taz

-- Taz (Tassi123@aol.com), December 10, 1999.

Been there, done that, but hard to stop doing it.

Very lucky to have the bucks and the gold.

-- nothere nothere (notherethere@hotmail.com), December 10, 1999.

Yeah:

If things do get bad we can use all the shares of the .com stocks to start fires, like the 1920's germans did with their currency. Hope it doesn't get that bad.

-- zebra (zebra@africa.com), December 10, 1999.

All the wishing in the world isn't going to start a panic. Even a few bank failures won't start a panic. Have you no memory of the S&L crisis? Even that didn't start a run on banks. And it was on the news for hours, days, weeks and years. At some point you will have to admit to yourself, "the world just isn't that fragile". Regardless of what the honorable Gary North says.

-- for real (for@real.com), December 10, 1999.

imho the first television station to air a run at a bank will have its transmission tower knocked over by 'domestic terrorists.' i'd just bet that 'suggestion' is already being bandied about by the alphabet soup boys.

-- Cowardly Lion (cl0001@hotmail.com), December 10, 1999.

for real,

You do have a point. However, you can't deny that the Federal Reserve has taken extreme measures to increase liquidity in the system. This indicates they are expecting liquidity problems. If the Fed thinks so, so do I. Very simple - if you're expecting a shortage of something, stock up in advance. In this case it happens to be cash.

OK, so what if there's no panic?

How about an energy crisis and runaway inflation? Or a severe market correction triggered by Y2K or something else? I don't really care what makes interest rates go up, or stocks go down just so long as I can get a decent return on my money, or a better bargain on a stock (it would just seem more more magnanimous if you brought your money back during a time of "public need"). I guess interest rates could go down and the market could stay flat for a long time, but that's just part of the risk I take as an independent investor, I can accept that.

However, it's still not worth the risk (to me anyway) to leave money in the bank. If anything happened, I wouldn't want to have to wait, possibly for years, to get a settlement from the FDIC or some such thing.

By the way, just because the public didn't panic during the S&L crisis, doesn't mean it couldn't happen now. Y2K is a different animal and like everyone seems so fond of saying (but it seems so few actually believe), "We just don't know for sure what will happen."

I'm prepared to be wrong, are you?

-- Clyde (clydeblalock@hotmail.com), December 10, 1999.

I've been saying the same thing for months now Clyde.

Look for stagflation to come to an economy near you.

I just hope that no one has to die because of it.

-- nothere nothere (notherethere@hotmail.com), December 10, 1999.

Cash, sure. But what if TSHTF so badly that the system stops. Why can't the authorities (FDR Bill, that is) just do what FDR did with gold: tell people they have just so long to "turn in" their cash and get some new "equivalent" for it. This way they could just wipe out the old system and start the new one, with no cost to the idiots that did nothing to prepare. In fact, maybe we will all just be issued digit blips. "Yes, Mrs. Romano, here is your 20 digit blips on this piece of paper -- this is what you get for the $5,000 cash you just turned in. We're off the dollar cash standard now and we all use digits now." And they could set up a world central bank of digits. Think of the new possibilities! Sorry, got carried away.....

-- Tishaminga (steverromano@eaton.com), December 10, 1999.