MARKET REPORT(6/3/99):
...Speaking of Y2K, talking with many of the people interested in purchasing gold as the price drops, we find that investors are not as concerned at this time about massive disruptions in the United States resulting from "the bug." Instead most are concerned about breakdowns in raw material supply lines, particularly oil, as the embedded chip problem manifests itself in a slowdown, or even shutdown, of delivery systems in oil producing areas. In turn many investors think that those breakdowns, or slowdowns, could manifest themselves in higher prices and an inflationary tone next year. They are buying gold in case those breakdowns or slowdowns translate to acute shortages, rationing, etc.
There are also concerns about the banking and settlement problems in international trade due to the large number of unresolved computer problems all over the world. R.E. McMaster, editor of the The Reaper newsletter points to a acute problem in Japan -- the world's second largest economy. He says that of the 19 big Japanese banks, only two are 75% Y2K ready, over 50% are 25% prepared. He goes on to point out that eight of these banks rank among the world's top twenty. "Japan," he says, "is a mammoth Y2K domino that could topple the whole financial system globally."...
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