Quotably Quoted #59 - Part 2

greenspun.com : LUSENET : TB2K spinoff uncensored : One Thread

We know the bubble will eventually burst, as bubbles always must and historically always have. But the question remains, will it burst at the same time as we face the worst of the Y2K failures? After all, I was wrong in my prediction of the timing of the crash in early 1999. Well, I truly believe these two events will indeed be simultaneous and I'm willing to go out on a limb again and predict that by the Ides of March, the Second Great Depression will have already started. I've even put my money where my mouth is and, since late 1997, I've invested exclusively in precious metals (physically stored with close relatives outside the US and the UK and beyond the likely threat of confiscation). This is more than I can say for certain bank "consultants" like Martin Armstrong, who led the charge against gold for Republic Bank in New York, but who is now facing contempt of court charges for the hoarding of $16M worth of gold coins and bars, allegedly embezzled from his billion dollar Japanese clients.

It looks like I'm in experienced (if not honest) company and I'm not the only one who prefers to be a year or two early rather than a single day late. In fact, I believe that at least some of the downward trend in gold prices over the last year is due to willful manipulation by large banks and institutional investors, as well as oil producers, who wanted to move out of worthless paper and into physical gold at the best possible price. They even timed their exit to precede the double ought disaster and did everything they could to bolster the bubble and keep as many as possible completely in the dark about the true condition of the Y2K problem. More charges for the bubblegate trials?

But back to the question of timing. Firstly, the greatest number of Y2K problems will indeed occur in the first two months of the year 2000. There are certain "experts" who have said that the majority of failures have already occurred, before the actual rollover. Bovine Scatology. Because of the very nature of the record keeping task inherent in most business systems, almost all digital dates are historical and so, except for the limited and shoddy testing of Y2K fixes, dates with a zero-zero year cannot possibly enter most systems until after December 31st, 1999. Only a tiny fraction of dates are computed in advance and the failures we have seen so far are therefore only a tiny fraction of those we are going to see next year. In my expert opinion, almost all Y2K failures will be experienced in January, and at the beginning and end of February (as month end and leap year processing adds to the general confusion). There will be a secondary spike at the 2000/2001 boundary but, basically, most of the failures will have already occurred by early March, 2000. That does not mean they will be fixed by then, of course. Most of the failures will take days, months and even years to fix, as we have already seen with several of the early failures. In some cases, the systems will never be fixed and their benefits will be permanently lost to their owners and to the economy as a whole. Some of their owners will also fail, taking with them the benefits even of those systems which didn't fail and starting the widely predicted domino effect and the collapse of Charlotte's web.

Secondly, not only is bubble.com bigger than a year ago, but there are increasingly ominous indications of an impending crash. Massive inflation has been hiding in the balance of trade and in the stock market for years (that's what caused the bubble in the first place) but now it is beginning to show in the general economy as well (particularly in oil prices). In addition, interest rates have been steadily rising since the last quarter of 1998. Also, it is becoming apparent to savvy investors that the corporate earnings of many high flying technology companies (particularly Microsoft) have been artificially exaggerated by questionable accounting practices which use employee stock options to inflate the bottom line. If these options were more honestly accounted for, many of these companies would be showing massive losses instead of profits. All of these factors trend toward lower future corporate earnings, making the market less attractive to investors. This last is borne out by the fact that, since April of this year, more stocks have declined than advanced, indicating that the smart money has already left the market and the bear cycle has already begun. Only the amateurs, frantically feeding the internet beast, are keeping the indices where they are today. Indeed, the hindsight of history may actually show that the decline really did begin in the first quarter of 1999 and my original prediction was in fact correct!

In addition to Y2K and bubble.com there are five more major economic areas which are shaping up for a simultaneous crisis in the year 2000. They are oil, gold, the dollar, the yen and the euro. These five factors are so closely related and intertwined that I find it useful to lump them all together under a single name derived from the two with the most important long term implications -- the gold/oil or GO crisis. In my not so humble opinion, the GO crisis has the potential to trigger World War Three, starting in the Middle East, and quite possibly involving a nuclear exchange with Israel. It is vital that we understand all of these factors if we want to survive the great tribulation of the coming decade.

Let's begin with oil, the lifeblood and lubricant of the global economy. In fact, oil has two major crises to face in or very close to the year 2000. The first, a short and medium term problem, is the effect of Y2K itself, both on embedded systems and on the conventional business systems used in it's production and distribution. Given the tardiness of Y2K remediation in most oil producing countries, we can be certain that there will be interruptions in supply, but by how much and with what effect? During the Arab oil embargo, a mere 6% reduction in production led directly to the deepest global recession since the Great Depression itself. Today, the US, Europe and Japan are all far more dependent on third world oil (the most in danger) and even this minor reduction would burst bubble.com and induce a major worldwide recession. However, even conservative government agencies, like the CIA, are estimating reductions of up to 30% and I have seen credible estimates of losses up to 70% of production. For the US, the problem is even more acute because it's largest single foreign supplier is Venezuela. Not only is this country still at the Y2K starting gate, but it has recently experienced a major natural disaster with which it will still be struggling at the start of the year. To make matters worse, Venezuela has also just adopted a new constitution which is almost certain to lead to a Marxist dictatorship unfriendly to the west. I think it should be obvious that the US will lose at least 50% of it's foreign oil.

For how long? The problem with the oil industry is its heavy dependence on embedded systems, not just in well head production and transportation, but even more so in the refineries. This last is the main reason for the higher estimates of 70% production loss. Although the failure rate may be lower, and I'm not even completely convinced of that, these systems are much more difficult to fix than conventional business systems and the effects of their failure are frequently disastrous. The main reason for this is that embedded systems are, by definition, always an integrated part of a larger and more complex system -- the equipment plant they are controlling or measuring.

This makes them harder to replace with modern, compliant equivalents because they must all be individually interfaced to their hardware and then individually tested. This alone is a mammoth task which just hasn't been done on anywhere near a large enough scale to avoid a major problem. Witness the Van Nuys sewage system failure which, months later, still hasn't been fixed with anything more than a manual workaround. So far, it has proved impossible to replace or repair the subsystem which actually failed.

Far more important than this, however, is the distinct possibility of a single embedded system failure bringing down the entire outer system, the entire production plant, and not just for a few hours. In fact, most recent industrial disasters have been ultimately caused by the failure of a single subsystem. We saw this on New Year's Eve, 1996, when a simple leap year date problem essentially destroyed two aluminum smelters in New Zealand and Australia. Oil refineries are even more complex and, according to engineers more knowledgeable than I, after similar subsystem failures it would often be less expensive, and less time consuming, to build a new refinery rather than repair the old one. With less crude oil available, and in times of economic distress, that just isn't going to happen. Much of the production loss will therefore be essentially permanent.

Unfortunately, oil has an even bigger, long term problem to face than just the Y2K date rollover. At this moment in history, we have used up and burned approximately half of all the cheap oil God ever created on this planet, and we only took 100 years to do it. In the 1950's, a geologist by the name of Dr. M. King Hubbert defined the basic laws which describe the production and consumption of finite resources, like oil. He found a bell shaped curve of production which typically peaked at the point when half of the resource had already been used. Using this, he successfully predicted the peak of US oil production in 1969. Passing this production peak is the main reason the US will always and increasingly be dependent on foreign oil (at least until it all runs out).

According to recent, credible research, the peak for global production as whole will be reached around the year 2000. It might even have been passed in 1999. Venezuela has already passed it's peak, and the North Sea is also peaking about now. The Middle East will be last and may not pass their peak until 2010. This is politically highly significant, because prices tend to decline before the peak (in response to increasing supply) but they rise steeply afterwards, because of increasingly shorter supply. From now on, the Middle East will have increasing control over more and more of the production and price of this vital commodity. Unlike the earlier oil embargo, this sea change will be permanent and oil prices will continue to increase, forever.

Which brings us to gold. According to our beloved bankers, who strangely still want lots of it for themselves, gold is just a "barbarous relic" whose only viable modern use is strictly as an industrial commodity. In reality gold is still, also, money. To those of us who own it, gold is the only true money there is, created directly by our most high and living God, in a fixed amount which can never be inflated by pollyticians or economystics, and which grows in circulation only slowly in response to human endeavor. It is the only money worth having when the other moneys begin to return to their intrinsic, commodity value. Government paper money, unless backed by an irrevocable promise to repay in gold, is intrinsically worthless. When it fails, as all fiat moneys eventually do, about the only thing you can do with it is burn it for heat or flush it down the toilet (after appropriate terminal usage, of course).

The founding fathers knew this truth when they constitutionally limited the individual states to money consisting solely of gold and silver coins (a restriction which is legally still in effect and which was certainly also intended to apply to the Federal Grabit). Franklin Roosevelt knew this truth in 1933 when he defaulted on the Grabit's solemn promise to repay US citizens in gold for the hard earned sweat they had deposited into the bankrupt Federal Reserve system. Richard Nixon knew this in 1971 when he, too, defaulted on the Grabit's promise and stole from trusting foreigners the gold that they were entitled to from the same bankrupt Federal Reserve. The Arabs who control the world's oil have known this for thousands of years and it was only a gentle reminder when they were among those whose gold was stolen by the Nixon default.

The Nixon default was the real cause of the Arab oil embargo and the global recession which followed it. Contrary to conventional American prejudices, Arabs and other Middle Eastern peoples are not a bunch of stupid sand diggers. In many cases they are far more intelligent and much better educated than the average American. This should not surprise us since they spring from the same well of civilization, between the Tigris and Euphrates, from which ancient and modern Babylon are also watered. Historically, gold has been the only trustworthy means of exchange, the only reliable store of wealth, in this turbulent region of constantly changing borders, countries, princes, dictators and even religions. These intelligent Arabs have always known the true and finite value of their only major resource, even when they were being exploited and cheated by the Anglo-American companies who first possessed the technology to retrieve their oil.

In fact, it was their understanding of their lack of other resources, their lack of a modern industrial infrastructure, and their desire to acquire both, which induced them to trade their oil in the first place. But only for something of equal value, something which could in turn be traded, even after many years, for something else of equal value. In short, they always wanted historically reliable gold for their oil and, in this respect, they are certainly more intelligent than the average American or European.

Prior to the Nixon default, the Middle Eastern countries happily accepted dollars for oil because, effectively, they were "as good as gold". Each and every dollar they received really could be physically exchanged for a fixed and promised weight of gold -- real, true money. Americans lost this right in the 1933 Roosevelt default, and were too stupid even to complain about it. Not so our Arab friends. They knew the value of their gold and when Nixon stole it they were pissed. The oil embargo was their way of recouping their losses through higher prices and it didn't end until an agreement was reached through which they could once more reliably receive physical gold for their oil, as we shall see.

I doubt that Nixon ever really understood what was happening back then, just as I doubt that most of the Americans reading this today even understand what I am saying. But try very hard, because I'm talking about the cause of World War Three and the kind of misunderstandings which can lead to it. In 1971, Richard Nixon was faced with a problem. Because of inflation and the rapidly escalating trade deficit (sound familiar?), foreigners were losing confidence in the dollar. When they received dollars for their goods, it made a lot more sense to invoke their legal right to redeem them in gold, rather than hold the paper dollars and watch them daily depreciate in value. As a result, the US Treasury was being rapidly drained of it's gold reserves and would soon be unable to keep it's promise to repay it's dollar debt in gold. Nixon could not possibly understand why these crazy foreign persons would prefer gold to the almighty dollar. After all, he received his own salary in paper dollars, which seemed to work quite well, and he didn't feel any need for any gold of his own (in fact, after the Roosevelt default, it would have been a felony for him to own any). From his parochial, bigoted American viewpoint the solution was really very simple. If the promise would have to be broken eventually anyway, why not just break it now and keep the gold reserves the bankers said was necessary to keep the bankrupt Federal Reserve from completely collapsing? After all, when Roosevelt did that in 1933 it worked and everyone had to keep on using paper dollars, even if they did lose their value over time. Why couldn't foreigners, especially Arabs, understand and accept this as the American sheeple had?

Which brings us to the dollar. Believe it or not, the software which runs area navigation systems like INS and GPS determines the predicted position of an aircraft by first deciding where it isn't! Likewise, we can best understand the paper dollar by first describing what it isn't. In the first place, it isn't money and it isn't legal tender. The US constitution clearly limits the member states to gold and silver coins as the only form of legal tender they may use for private and public debts. It also reserves to the United States (the Grabit) the duty to mint such coins and specifically forbids the individual states or private individuals from doing so themselves. It does allow the United States to emit "bills upon the credit of the United States" but has no provision, and indeed prohibits, the use of such "bills" as legal tender. In fact, there is no place in the US Constitution, or in federal law, or in the constitutions or laws of the individual states, which actually defines what a dollar really is or where it comes from.

This has interesting intellectual and legal implications which I personally find fascinating, but in the context of this particular discussion they are largely irrelevant. The question for us is where do practical, every day dollars come from and what are they really worth? As I write this, I have before me a single dollar "bill", taken from my wallet, with the serial number "H04383516F" (which obviously must make it very important and very valuable). But let's take a look at what is actually printed on this "bill" and what it legally means.

First, the largest typeface is used to say "The United States of America" at the top, and "One Dollar" at the bottom. Both phrases are criminally, fraudulently deceptive. This bill may be printed by an agency of the Federal Grabit, but only on the orders of a privately owned banking monopoly called the Federal Reserve, which is solely responsible for actually issuing it. This is why it is called a "Federal Reserve Note" in smaller text at the very top of the bill. The even smaller print in the top left says "this note is legal tender for all debts, public and private" which is completely and utterly false. Even the US Congress has no power to make anything legal tender other than gold or silver coin, and it certainly has no power to delegate such authority to the privately owned corporations which make up the Federal Reserve. It is in no way, shape or form a bill emitted by congress against the credit of the United States, and there is absolutely no obligation for anyone to pay anyone else a "dollar", even if there really were such a thing as a real dollar. This bill is not money and it is not legal tender. It is a counterfeit.

The only reason Americans accept this fraud as money is because this country has been under the thumb of an illegal, unelected dictatorship since 1913, when the Federal Reserve was first created. At this time, a cartel of criminal bankers traded the unpayable debts of the bankrupt United States for the greatest power of all -- the power to print the people's money. This gave them the power to steal all of the real money, the gold, of the United States but, being the sly scum they have always been, they didn't want to do this directly or openly in case the sheeple woke up, put on their wolf's clothing, and tore them into tiny pieces! In any case, they didn't have to. Given the lack of interest and study by average people of the important, but boring subject of money, it was easier for them to steal the gold slowly and quietly through the greater fraud of fractional reserve banking.

When banks are allowed to keep only a tiny fraction of their customers' deposits in the form of "reserves" (currently about 2%), they are free to create billions upon billions of new paper notes out of thin air, just by issuing loans to other customers from the remaining deposits. This is because the loans themselves first become new deposits, and are recycled through the banks to create even more loans and more deposits of imaginary money. It works like this (greatly simplified, of course). Mr. A deposits $1,000 and the bank must place 2% or $20 with the Federal Reserve. But there is still $1000 in the system, the number in A's account. Mr. B wants to build a house and borrows $500, which would build a pretty good house back in 1913. He doesn't need all the money right away, so he leaves it in his account. The bank has to place 2% or $10 with the Federal Reserve but there is now $1500 in the system, $1000 in A's account and $500 in B's account, created out of thin air. Now Mr. C wants to outdo Mr. B and build an even bigger house for which he borrows $1000. The bank is allowed by law to lend him this money because there is enough to do so with current deposits, less the reserve. Likewise, C doesn't need the money straight away, and leaves it in his account. Again 2% or $20 goes to the Federal Reserve and the banking system now has $2500, mostly created out of thin air from the original $1000. To repay the banker for his generosity, the law also lets him charge 10% interest on the $1500 in loans, while paying only 2% interest on the original $1000 which got this whole thing started.

Would you like to be a banker? Sorry, ordinary people are not considered to be "honest" enough! If you didn't understand this before, you stand in good company. From the parable of the ten talents it is clear that, in His human form, even Jesus Christ didn't fully understand the insidious evil of bankers (although they weren't quite as bad back then). In His heavenly form, though, I'm certain He fully understands their behavior, and I really would not want to be a banker when He returns. I also have no regrets about charging banks large fees to fix Y2K problems I helped to create in the 1970's.

But back to the dollar problem. The fabrication of imaginary paper dollars could continue indefinitely, were it not for inflation. As the money supply becomes inflated, there are more and more dollars chasing the same goods, services and commodities. Prices begin and continue to rise, especially the price or value of the ultimate commodity -- gold. At some point, the general public always loses confidence in this inflated funny money and converts it into something of real value, like gold and silver. In 1913, the Federal Reserve wanted to forestall this inevitable loss of confidence so they lied, and pretended that their paper notes could always be exchanged for the gold which supposedly backed them. But the bankers knew that very few of the sheeple would actually do this, since paper money is so much lighter and more convenient, especially as their numbers are inflated and more of them are needed to buy everyday items. Their scam worked for twenty years and would have gone on much longer if it weren't for something that happened in 1929.

In October 1929, what was until then the biggest equity bubble in history, burst. The huge economic contraction which followed put an end to the myth of gold for dollars. The smartest money saw the same signs we are seeing today and got out of the markets before the bubble even burst. Taking the Federal Reserve at their word, they converted Reserve Notes to gold, and stored it in their bank safety deposit boxes. After the crash, the other money took what they had left and tried to convert that into gold. They were too late. As everybody and their uncle tried to convert paper dollars into gold the paper was quickly becoming worthless. So in 1933, just twenty years after its founding, the Federal Reserve defaulted on their notes and Franklin Roosevelt not only made private ownership of gold illegal he even went so far as to steal it from safety deposit boxes. This is why I keep most of mine away from the US and its UK puppet. I keep only enough to get me out of the country and to my stores of wealth.

Thus, by 1933, the United States was completely under the illegal dictatorship of the Federal Reserve and their White House shill. The sheeple were forced, by fiat and dictate of a Dammcorrupt pollytician, to accept meaningless and valueless reserve notes as their money. But even a Dammcorrupt couldn't dictate to the rest of the world, because nuclear weapons had not yet been invented. If Americans still wanted to buy goods and services from the rest of the world, and they did, they would have to buy them with dollars which were at least perceived to have real value. After 1929, it took the bankers four years to come up with the idea to use the same scam they had started in 1913. Just change the geography and limit the redeemable dollars to the few in foreign hands and we're back in business, just about where we were in 1920 when we started that stupid bubble!

The new scam worked until the end of the Second World War, which was a historical accident. Our benevolent bankers only ever start little wars, and revolutions, and only for strictly financial reasons. World wars only happen when they make a mistake and lose control of the situation. At the end of the war, the global economy was a shambles. Only America still had a workable economy, and that only because a geographical accident had protected American industry from being bombed back into the previous century, allowing American business to reap a windfall at the expense of the rest of the global economy. At this point, however, even the bankers realized the world needed a stable global reserve currency (as long as it wasn't gold and only they could print it, for nothing, out of thin air). The result was the Bretton Woods agreement, which simply devalued the dollar to a lower rate against gold, allowing more, redeemable dollars to be printed in order to finance a restart of the global economy.

Which brings us to the yen (and the mark, and the pound and the franc, etc.). All of these foreign bankers were thoroughly familiar with the pyramid scheme of fractional reserve banking, because they had been using it themselves for years. But they had always felt the need to back their scams with some real gold, to give at least a semblance of honesty (and to give themselves an exit strategy into real money when that became necessary). That's why they would not themselves accept an unbacked foreign dollar. They watched in sheer amazement as this fiat dictatorship continued to work in America. After all, historically, all previous similar scams had always ended in disaster when the sheeple woke up and the fiat currency collapsed in a worthless pile of paper. What they failed to recognize was that the sheer size (and dynamics) of the US economy, compared to their own, was merely slowing the rate at which domestic confidence was being lost in the dollar. In addition, they initially missed the true significance of creating a special class of money which was redeemable in foreign trade but intrinsically worthless at home. They didn't realize that this, too, was just slowing the rate at which the dollar would eventually become worthless.

Each of the major nations created, (or redefined) an intrinsically worthless domestic fiat currency, which they could force their citizens to use by fiat or dictate, and which traded internationally not against gold, but rather against the dollar. But only foreign exchange dollars which the Federal Reserve pretended were still fully redeemable in gold. The intent, and I do mean intent, was to create a huge supply of inflated paper trade dollars, backed by a fractional reserve consisting of all the gold in Fort Knox, gold stolen from American citizens by Roosevelt in 1933. But the pyramid scam was still the same -- these dollars were not worth the amount of gold which the Federal Reserve promised to pay for them. There was never enough gold to pay off even the foreign trade dollars at the official price. The smart money (the Arabs and others) knew this from the start, and they traded their dollars for gold as soon as they received them. By 1971 it was clear that the gold would soon run out. Which led to the Nixon default (by a Republicoward this time, may a pox be upon both their houses). Which led to the Arab oil embargo.

Which brings us to the Euro. After the Arab oil embargo and the following recession, it was clear to the rest of the world that the dollar was no longer viable as a long term global reserve currency. It was not as "good as gold" and the defaults clearly proved it was not backed by the full faith and credit of the United States of America. In addition, the rest of the world was more than a little miffed at the unfair advantage given the US in creating a mountainous balance of trade deficit simply because of the reserve status of the dollar. In effect, the rest of the world was subsidizing the US national debt simply because of the need to accept dollars which could then be used to buy oil. This need in turn only arose because of a private agreement between the US, Britain and the OPEC nations to end the embargo in return for a way by which the Arabs could easily and cheaply convert dollars into the gold they demanded for their oil (more about this later). The world needed a new trade (reserve) currency, but it couldn't be gold. If it were gold, eventually all of the smart money would be converted into gold and all of their fiat currencies would become worthless (actually they already are). The rest of the world was temporarily forced to use those worthless dollars, but eventually there would have to be a reckoning.

With that strange synchronicity which seems so tightly bound to the year 2000, there were two events which occurred in 1999 to start the reckoning. One was the introduction of the Euro (almost twenty years in the making, after the Nixon default). The other was the US running out of gold with which to pay for oil. I admit that I don't have all the details, and probably nobody ever will, but the signs are clear for those who want to see them. There have been rumors for years that the gold is no longer there in Fort Knox, that "somebody" has stolen it. The "proof" is that "they" have not allowed it to be audited since long before the Nixon default.

This view is probably more than a little naive. The gold is probably physically still there (and in other repositories elsewhere) it just doesn't belong to the sheeple any more. Some of it has been fraudulently transferred to the bankers, and more has been secretly paid to the Arabs in return for their oil. For me, the clearest indicator of something rotten in the state of the Fort is the recent gold sales by the Bank of England, initiated by the socialiar Klinton Krony living at Number 10, Downing Street. Why on earth would a G5 nation publicly announce the sale of half it's gold reserves in such a way that it would inevitably force down the price of that gold, thereby greatly reducing the number of worthless dollars the BOE would receive in return for their valuable gold? Why would the European Union respond by forcing Britain to publicly join them in a repudiation of more gold sales and an elimination of the gold lease short sale scams which have depressed the price of gold and pushed the gold mining industry to the brink of destruction? Why would they make sure that a European announcement was made in New York? Why would the price of gold, determined largely by insiders, then immediately jump by about $70 per ounce?

The nudge-nudge, wink-wink answer is that the BOE is covering for one or more deeply short members of the LBMA (London Bullion Merchants Association). Bravo Sierra. A G5 nation doesn't put up half of all it's real money just to cover a few banks. It doesn't have to. It just prints more paper and takes the inflation hit, as America has done time and time again. No, a bailout of this magnitude is only done for another nation, and a very close ally at that. The only nation close enough to Britain to receive this kind of special treatment is the United States. In fact, a bailout of this size isn't even likely for a close ally, just on it's own merits. Even if Bully Blair does owe his temporary Downing Street address to the Klinton Machine and to campaign funds provided by Goldman Sachs (the villain of the Ashanti gold mine disaster). Such a bailout could only occur if Britain itself is also in deep monetary trouble. All of this will come out in the bubblegate trials but, in the meantime, the most logical conclusion is that the US Treasury and/or the Federal Reserve and Great Britain are heavily short of the mellow yellow metal.

But the Arabs still want gold for their oil. Which is why the Euro will fail. It took twenty years to craft this first attempt at a European monetary hegemony. It has much to offer. A simple, interchangeable currency for the whole of Europe would be a godsend to business efficiency and it is even backed 15% to 30% by gold (depending on the price of gold and how you look at it). As is, it is far more dependable than the dollar. But it isn't gold and it can't be simply and legally exchanged for gold. If it isn't a complete, 100% genuine certificate, permanently redeemable for physical gold, the Euro is worthless. It's just another piece of counterfeit paper. Which is why the Euro will fail. But the Arabs still want gold for their oil.

The EEC is making the same fundamental mistake as Nixon in the 1971 gold default. These stupid bankers really, truly, believe their pathetic paper is actually worth something to intelligent people and that there are enough sheeple to believe in it and keep the ponzi scheme going. But the Arabs still want gold for their oil. Which is why the Euro will fail. If the Euro doesn't pay out in gold, if the dollar can no longer be easily exchanged for gold, there will be no more cheap oil from the Middle East.

This, then, is the crux of the gold-oil, or GO crisis. Like it or not, the Middle East has control of both the remaining oil and the gold to pay for it (past and future). The world needs oil and gold to keep the wheels of the economy turning. Without them, the world we know won't GO, it will STOP. If either stops flowing, there is no human alternative but to switch to the other precious metal, lead, at an average velocity of 2750 feet per second. Or its precursor, uranium, which after certain transitions also becomes a form of high temperature lead. I have no doubt that, militarily, we would win such a World War Three. But do we have the right? What is the cost to our souls?

These, then, are the first three horses of my apokalypsos (a simple Greek word meaning "revelation", not necessarily the immediate end of the world). They are Y2K, bubble.com and the GO crisis. But, like my namesake John, I have a fourth, pale horse whose rider is named Death, and Hades follows close behind him. So far, I have placed all of these problems synchronously in the 1999/2000 time frame, and I feel confident enough of my technical ability, analysis and knowledge to do so. The fourth is a public health problem but, even though I started out to be a medical student, I don't really feel qualified to place it absolutely in any particular time frame. Nevertheless, I feel it's spiritual presence within me at this time. Many great historical changes have been accompanied by sickness and death. The departure of Israel from Egypt. The Black Death of the middle ages. The influenza epidemic of 1918 (which basically ended World War One).

We are overdue for another flu epidemic like this. And there are other diseases appearing with greater frequency all over the world, in spite or perhaps because of modern medical marvels -- AIDS, the resurgence of antibiotic resistant TB, the deadly Hanta virus right here in Arizona and Ebola and similar viruses which jump from the jungle and leap with certain death from victim to victim in a matter of days or even hours. I am certain about the first three horses and I am certain they will produce conditions in which fresh water and reliable sewage treatment are at great risk. Do not be surprised to see my fourth horseman riding through your neighborhood at the same time as all these other disasters are happening. I pray that the Lord will be with you, with your children, and with mine.

And now, for something completely different, let's close with two simple lines from the world wide children's game -- Hide and Seek:

. . . one thousand nine hundred and ninety nine, two thousand!

. . . ready or not, I'm c.o.m.i.n.g ! ! !

Where is Disinfomagic now?

Andy Ray

-- Andy Ray (andyman633@hotmail.com), September 17, 2000


YES! YES!! The classics of Y2K!!! Even now, one can only gaze and feel humbled by the splendor of such writings.

Andy Ray, your setting them in italics truly renders them in a beauty not appreciated by the original format of the CS forum wherein this appeared. You sir, are truly an artist!!

-- King of Spain (madrid@aol.cum), September 17, 2000.

It really was great stuff. You have to wonder if Infomagic was just kidding about the whole thing.

-- (hmm@hmm.hmm), September 17, 2000.

I didn't read it then. I sure as hell won't read it now.

Infomagic currently works at a carwash in Flagstaff, AZ.

-- (nemesis@awol.com), September 17, 2000.

Well, at least Mingham's found a job that (with good training) he can do well.

-- Bob Brock (bbrock@i-america.net), September 18, 2000.

I sheepishly admit to quick scanning here, couldn't take in the whole thing again right now. BUT - I did notice the mention of a flu epidemic. On friday night our local TV news station was beating the drum about this year's flu worries. "Pandemic Planning" was the topic of the report.

-- flora (***@__._), September 18, 2000.

from Charlie Reuben Dallas(Home of the Meyerson Symphony Hall,the US' BEST)

RE: All XBASE Problems in the PC and the Cost to fix.(25-50 Billion???)

Part I Intoduction to the PC X BASE Problem:

No one on these Year 2000 study groups is looking at the real problem for the PCs. As they say every 4 years here, "Its the APPLICATIONS,dummies!!! Not the programs. It was what was done to those programs that have built up a mess that is a scaled down version of the MAIN FRAME Business Application Problems. And...its worse because there is some agreement on what you can do to isolate and identify and fix the Big Boys. There has been little said or done that even indicates that ANYONE is even looking at the most wide spread mess of all, the X BASE problem.

The question of the PC/MAC/Small User Problems vis a vis The Year 2000 Problem has not been quantitated properly because the problems have not been evaluated in depth. Given the magnitude of the Global 2000 woes, this is understandable. There has been much press on the Gartner Study claiming 300-600 Billion for the larger Enterprise fixes. Little has been said of the micro-bombs in the Micro Computers (the PCs/Mac etc). Using conservative extrapolations from several data sets, I arrive at a minimum cost to Small Business of a range of 25 to 50 BILLION Dollars (with a mean of 37.5) to get these houses in order. I "believe" it will be double that range if properly measured maybe more. Much will be passed off as "upgrading" because for small businesses there are tax advantages that large Corporations can not utilize if they "upgrade" just for Year 2000. (See Yo' Countant).

I define Small Business as businesses with less than 100 employees. The US Census says there are 38 Milllion of these. The Dallas Chamber of Commerce says there are 76,000 in Dallas County Alone(2 million souls ((mostly all perfect Angels)) ). If ten per cent of those companies spend only $10,000 "fixin" (Texas Tech Speak) that be...76 million. Lets look at the 38 million. Same thin,Lucy.... $10,000 X 3.8 Million. Let me help you...3.8 Mill X 10 =38 mill X 10 = 380 Mill X 10 = 3.8 BILLION X 10= 38 BILLION.

Look at it from the MOST elemental way. Dallas County (Chamber again) 1-4 employees: 41,947 firms. Is it reasonable to assume that a 'business person" might be willing to spend $10,000 on Computers? If she knew she had to file electronically and the computers made her money??? Forget all the people who "cant afford it" and think only of the 10% who WILL PAY.. I think it quite reasonable that a small 1-4 person company would lay out $10,000 to get working in 2000 but I will hedge my bet knowing that 1/2 of those will be history by 2000 and so I'm really betting that 1/5 will pay that kind of money. (Two desktop machines a laptop, software and some 'var" help). If they already have the machines and software and choose to "modify" the apps. who gwine do it??? The VAR who wrote the Air Conditioning Service Software and only charges $5,000 a copy?? Or FTD who charges every Florist X dollars to use their Software etc.

Its a true "pay me now or pay me later " deal. So considering ONLY 10% of the very smallest Companies in Dallas County we have: 4,195 X the $10K we still have almost 42 million. Plus TAX. (Dallas County pays for its Year 2000 problem from that alone,I hope).I will calculate this another way later.

At the heart of the cost will be the modification of or migration from any Customized Software Applications. Not the BIOS problem and NOT technically defective Software. Recently, some efforts to catalog the Generic Software have been made. They MISS the Central ISSUE. For, it is in the modification of the Generic Software (whether it be a Language or a "type" of software such as XBASE or SpreadSheet) that small and mid Range and even Enterprise level that Year 2000 problem willl arise. I do not think that the cost of the X Base problem has been included in most of the Year 2000 studies, yet the applications infest many large companies and must be fixed. Given the nature of Corporate Non Disclosure policies in most Companies, such proprietary information is not "given out". I can only think that if there are 8 million "seats" for Lotus "NOTES" there must be 5 times as many customized "things" sitting in the Big Companies.

In small companies, they don't even have a clue yet. NONE. Zippo.

In X BASE...there is NO Global FIX..NONE..

I repeat: there is no GLOBAL FIX and...there are zillions of problems. Zillions is a technical term of a Matrix of millions of application programs multiplied by a matrix of millions of users (Note: its really a TENSOR but lets not get that technical). The Ultimate Night Mare of the I.T./I.S. Pros came true....'The USERS GOT LOOSE".

Unlike the "Big Guys" the Little players don''t know yet. AND.. worse, their problem will be more costly and possibly not fixable. WHY?? Simple. The Big Guys Problems are really analogous to that of a Boeing or Lockheed Jet craft user problem. The Airlines have internal experts, external consultants, Manufacturer's consultants and expertise. More Brains and Bodies can be hired. At the other end of the spectrum, there are the car owners of the PCs with many Makes and Models all "customized" for the users, with many different kinds of driving styles and paint jobs. The Computer is the 'Universal Machine'. Give it a problem and a way to do something and it will work on it. It is "silly putty" for brains. Soon it will "replicate" and truly make us humble as it does winning at Chess. But...in the PC world you have all these machines and all these programs but NO FACTORY TRAINED MECHANICS Certified for Year 2000. There are NO University Courses in Year 2000 and prior experience is not on the job discription. It never happened before. What's a toy maker or a chain of dry cleaners to do??? There are only "hints" in the Heloise like columns of the PC mags. NO real 'sink your teeth into the code" solutions. To know the X BASE problem, you have to be able to read the code and that is not your Mother's bedtime story. AND..you really have to know whether it "can" be fixed. And..you have to know whether or not you can get the "data out" in a meaningful way. It goes without saying that you must back up everything. All financial stuff is needed for the you know who anyway. IN its original form. (maybe or maybe not,see your Accountant).

In the very worst case scene comes the compiled software for a nice little company whose VAR retired. The Source code is gone to the Dumpster in error. The applications all have 2 YY date displays and ALL manipulations in the machine see only 2 YY. These are the Cinderella Class : "DEAD DUCKS". Gonzo. They will fail or lock and the data will not be retrievable. Think it can't happen. Ask any computer person what "losing the pointers means". If the program looses its "reference points, It either stops and locks up or loops forever or simply "gives up" (crashes). You boot it up again with your back up and same thin... Lucy. but worse because now the backup is gone. Can't happen??? Take it from me the proud owner of $20,000 worth of zeros and ones when a "proprietary accounting package" lost its pointers. On a less stressful note, the BIOS problem of the Micro Machines themselves is well known. A new retrofit chip or machine may solve that problem. IMHO,a better safer fix for many will be the Software Patch written by Tom Becker (formerly of Dallas) while he was here in Dallas. Becker's program is available at www.RightTime.com or by link from my home page sites. Chip upgrades across large applications should be done by professionals. Because no machines were really "Y2K" enabled much before 1996 (save for the claim of Gateway) and there is an installed base of 100 Milllion or so machines the choice for businesses is simple. Install a new Bios, use Becker's solution or enter the date in January of 2000 and pray. Lets say that only 1/3 the installed base choose to use the former two. At a cost of $50 per fix plus labor at $50 (you clearly can't let Steve Salesman do it because he spills coffee) thats only some 3.3 Billlion. Where do the rest of my mean 37.5 Billion get spent?


Consider the X Base Problem. There are 8 million in the dBASE installed base per Borland's numbers. dBASE's Data base "engine". Lets triple that to arrive at a modest amount of copies of data base software in the field including "compiled applications and double that again to reflect the multiple number of applications per desk.

MOST if not all of the 'custom" software applications use date field information in some manner just as COBOL applications do. Since dBASE,Foxbase, SuperBase,Paradox and Clipper amoung others were "easy to work with" readily 'adaptable" and had the data base at their core, these were often the center of development for VARS and "business partners" (B.P.s).aka: "Solution Providers". There was also a great deal of Basic at first and then C and now of course, C++. (JAVA is next).

In the "off the rack" application department there were programs like ACT and Quicken that were built one way or the other that were not Year 2000 Compliant (both are now according to reliable reports and migration is easy). Technical flaws in other well known programs have been corrected to implement Leap Year and Year 2000 4 YYYY changes. For all practical purposes, these were probably not mission critical applications (except that a lot of business could be lost if data in a Contact Manager were lost to a sales or Marketing person.). Again, migration and labor might cost $100 (though if I had a site license for something that was defective I personally would want it for free hint hint to Gates and MS). So doubling the 3.3 Billion again is probably in order. Where's the other 30 Billion???

X BASE... and all those wonderful '"integrated" customized programs that are literally everywhere.Some even wrap all the business applications of one industry for a company. and the "VAR" was clever. He made his "solution" scaleable so the company with 1,000 employees is using the same mess that the ones with 50 or 100 use. The big bird paid for all the others and the rest was sheer gravy. Many,many of these were written in dBASE III,IV OR FOXBASE. In many cases, the programs were implemented in the mid or late 80s and are still working their hearts out. ALL in mm/dd/yy.

The biggest adventure for these was to move them to Windows 3.1. (such a thrill I had to pass on until 1995).

And..note,,,it is NOT Borland's fault. They built a perfectly wonderful machine (for me anyway) and its been "compliant" since when..1985??? What's the problem??

Consider the following, in ALL the XBase engines there is a choice of settings for the display of the time and date. The US standard (to our regret now) has been MM/DD/YY. Has anyone you know EVER entered the year 1996 in a program except for a letter to your Mother in a Word Processor??? USERS are fools. :Programs need to be FOOL proof. Whence the 2 YYs. Why give the fools a chance to enter 1896 or 1886. Besides, in the Mid 80s those 2 extra YYs added up and since they were all 19 why bother. As long as the "Engine KNEW".what was the harm.

Enter the problem stage left. IF you enter any date to 12/31/99 the machine sees Dec.31,1999. Enter 01/01/00 and the MACHINE SEES Jan. 1, 1900. THAT is critical. Proof of this is simple and proof of what the machine sees is simple.

Enter 02/29/00 and you WILL GET...."invalid date" or some such message..BECAUSE there was no leap year in 1900. Test further and enter leap year 1904 and it goes down smooth. Now go back to the command line function in your data base (if you can) and write {SET CENT ON} and proceed as above. The leap year 2000 will go in and all seems well.

So...to the LAYMAN or even the non PC Computer Guys the next question is "What's your problem? Do a "global fix"." AND that is EXACTLY what people on the Net Mailing lists think is the end of the X BASE problem. It is not.

Part III: A Case Example:


Super Widgets, Inc. makes 1,500 line items of stock widgets and customizes some 5,000 more for special customers with 500 Manufacturer's reps sending in orders by fax,phone and telex. Sometimes one of the more advanced uses Email. The process begins. Somewhere along the way, Sam Super decided to "computerize" so at the Country Club bar he found out from the bartender that I.M.A Schlocker specialized in Small Computers for "important business men like Mr.Super". I.M writes up a full scale integrated package for all of Sam's departments and pretty much does a bang up job using Zippy BASE. (I love Borland so I don't want to say dBASE or the Foxy word). Many of them look a bit like this:

------------------------------------------------------- ---- ** foolish.prg ...prints a list of foolish things business men have to do ona given date;
** written in Zippy Base by I.M.A.Schlocker 4/1/87;
** Property of I.Schlocker and Co.
Call for special programs at my day job at
7-11 (212-555-1212);
** Modified by E.B.Schlocker II 4/1/92 ;
"------------------------------------------------------ ------------" clea all;
set colo to y+/b;
set century off;
use foo inde foo,foo2,foo3;
do evnmofoo ;
@ 20,20 say "Printing a list of today's items for you";
repo form foolist.frm ;
clos all
end;(if evnmofoo was a routine)

NOW...the part I want to stress is that for each and every little one of these here guys, inVARiably there IS a date field and inVARiably , the neighborhood VAR set the Cent off (just in case) to make sure that some two fingered typist didn't have the chance to muck things up much.

Never did anyone exit a program and set Cent ON. So, you have in every possible way shape and form, applications written "to order" for some "entity" or "market" each with its own peculiar way of doing things, names of fields, methods and procedures which internally depend upon those names and data types to produce whatever was supposed to come out the other end of the machine.

appplication TWO: mostly P Code:
order widget
issue ship orders
issue invoice
post A/R
monitor A/R
call for check when late
post A/R paid
post G/L

if we just look at: issue invoice: ship stuff
shipping notice and or bill of lading
terms: 2% ten net 30 days 1.5 if over 60 days retro to 30.
(pretty standard)
integrated with A/R

Here we see the need for the use of 'memory variables mem vars" If those Mem Vars depend on a 2 YY date field and can not read the 4 YYYY field we need to rewrite this application. And..we now open up an entire can of worms,especially the more tightly knit the entire "integrated package" was built. Since every name and field may have some use in other programs and modules, tweaking Super Widgets nose can make his feet hurt or even drop off completely. This is what your Pascal teacher was trying to tell you about "goto"s. Now that we have "objects" and OOP maybe this kind of thing will be gone forever. I don't wager on such things. Nobody every lost money betting on the bad judgement of people.

If we instead choose to "migrate" we need to know that NOW. because for MOST Companies...there is time to "convert/expand the date fields" so it can be "pushed into" the new application,tested and fielded. Soon, that window will not be there and for the PC users there is NO TIME. NO HELP and NO precedents for this kind of thing.. Who you gonna call???"Data Busters"????

Part IV: The Costs

Who has to "do this" fixin or migration to new software ??? Well, just like the Big Birds. YOU do. There are two ways to calculate this.


1. The cost of buying new software, modifying it and migrating data and users to it will probably be the same as "fixin" (Texas tech-speak) the OLD or MORE.

2. The cost of inventorying, analyzing, "fixin" and testing/fielding old increases as the number of users and size of the company increases. This is probably exponential or sigmoidal. Small companies with less than 20 employees and a "modicum" of expertise would do well to consider migration and burying the cost as a "capital improvement" (see your Accountant). This is not an option for large companies who must expense Y 2 K "fixin".



Assume all "iron" stays in place. Cost of Bios,mandatory replacement of obsolete software (old versions of ACT or Quicken or 123), plus modification of code of vertical Xbase Software. $1,500-2000/per machine/user. Stir in 'user downtime" administration costs" the whole bit. I think that's "Cheap" if it represents 1/2 hard costs and 1/2 soft. What's it cost to "train" a user??? I'm cheap because you just give me the stuff and I use it. Joe Stumble in sales needs what??? $500 in training. CompUSA did $350 Million in 'Corporate Training". They charge to teach you how to use what they sell you. If "the boss" teaches, in a very small company what's that time worth???? In actual billing or sales time vs. lost time?

Lets use the widely published "# of PCs used in business". : 100,000,000. world wide. IF...only 1/4 do anything about Year 2000 plug in the numbers. and LO and Behold...some sort of range: 37.5 to 50 Million. (Note: the per centage of people using PCs for business who will do something is greatly elevated from the 10% given at the start of this paper because for any PCs in ANY serious sort of application in a Big or Mid Range Company there is "no question" that they HAVE TO DO IT or risk down time in production. Period. That would imply that 90% or more of any PCs in Corp.hands would be made Year 2000 compliant. So the only difference here is the ownership of the machines.This further implies that the cost estimates given are probably far too low.)


New Iron and Software. New programs. Try... the SUN MICRO numbers. A PC costs 10-12 K per year for a big Company. What is the "incremental" cost if you have to Consider Year 2000 because you are "forced to"?? You have the same costs as above in "soft costs" Plus you have the extra cost of "migrating what has to be migrated" and storing what has to be saved for the IRS and Your Industry Standards. Lawyers may save "forever". Doctors and medical too. So, is the "incremental cost" forced by Year 2000 reasonably the same as above or more??? Given the trick of "depreciating it" by making it an "investment" instead of household monthly cost it probably works out the same but see Yo' Accountant). (SIDEBAR..I'm real good for a Real Estate person. I send people to Lawyers and Accountants two groups known as "deal killers" to the Unwashed members of my BusinessTribe.)

So again, we have the same results more or less (probably more)...a mere 37.5 to 50 BILLION DOLLARS. All to be spent unwillingly for something that we can't even moan about or vote on (like Congress).

Charlie Reuben, Charles P. Reuben BS,MA
Hancock Properties DALLAS
8600 NW Plaza@Hillcrest S:3-C
Dallas,Tx. 75225-4210
214-369-9502, or f:369-9337

E-ME: texasrltr@aol.com
Year 2000 Links http://members.aol.com/texasrltr/buytexas/index.htm
Member: GDAR,TAR,NAR, and
..the Gt.Dallas Ch.of Commerce

-- (xxx@xxx.xxx), September 18, 2000.

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