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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: William who wrote (26284)	11/15/1998 6:04:00 PM
From: Gottfried	Respond to of 70976

William, please see below... November 11, 1998 Are Your Finances Y2K-Compliant? By Terry Savage The countdown is on: There are 415 days left until the Year 2000. Are you prepared for it? Let's face it. No one knows what might happen when the ball drops on January 1, 2000 -- not only in the financial system, but also as a result of all the embedded chips in everything from your coffee maker to the car you drive. My grandmother always said, "Don't build up horrors before they exist." So let's set aside the alarmists who advocate socking away freeze-dried food and plenty of ammunition in your cabin in Montana. (Remember: Some people said the same things during the oil embargoes and inflation of the 1970s.) On the other hand, it would be unwise to ignore the possibilities of some disruptions -- especially when it comes to personal finances. I bank online and figure if my account is messed up, there will be a lot of people in the same boat. Still, next December I plan not only to back up my system, but also to print out my entire 1999 check register. If you're among those who pre-pay their real estate taxes or state income taxes in December to get the deduction in the current year, you'll have to make sure to get your check in earlier next year to prevent delays or mixups. When it comes to brokerage accounts, bank accounts, and mutual funds, I believe that most major institutions are going to keep track of all the assets without any trouble. But if you do decide to register your securities and have them sent to you, be sure to make that request now-- before the transfer agents get too busy. While major financial services firms -- including banks, brokerages and mutual fund companies -- proclaim their Y2K-compliant status, many smaller companies don't have either the money or the talent to investigate the potential problems in their computer systems. It's not just a problem for small business people; some reports have said that the government, especially the IRS, may be among the least prepared to face the new millennium. Somehow I don't have too much sympathy for the IRS; if they can't collect my taxes, maybe we'll get a new and better system! On the other hand, I've been told that Social Security started earlier on its Y2K problems and is therefore closer to solving them. But what good will it do to have updated computers if they run out of money? Speaking of running out of money, there is $450 billion worth of paper U.S. currency, about two-thirds of which circulates outside the country. In Russia and Asia, the $100 billion has come into even greater demand recently as a medium of transaction and store of wealth. Untold other millions of dollars are hidden under mattresses or buried in coffee cans. What will happen when people hit the ATM machines for cash reserves next December? It's reasonable to expect there to be glitches in ATMs and credit card systems during the Y2K transition. Some people I've spoken with are planning to withdraw enough cash to tide them over for a few weeks during that time period. The Fed is taking that issue seriously. It has ordered an extra $50 billion in currency to be printed during 1999. That represents a 33 percent increase in "cash on hand" over the $150 billion that is currently stored in Federal Reserve district banks. In case of a Y2K cash crunch, Fed officials say they could always increase the amount by printing fewer $1 and $5 bills, and more $100 bills. Also, they point out that about 75 percent of the money printed each year is actually used to replace old, worn-out bills. If worse came to worst, they could continue to use that "dirty" money. And they say they don't expect people to withdraw huge amounts of cash from banks -- just enough to cover basic necessities for a few days. Of course, any number of things can go wrong -- especially the things nobody is anticipating. Count me among those who will get their records in order early next year, withdraw a little spending money, and stock up on some basic necessities (such as Campbell's soup but not an electric can opener) along with the champagne. The rest is out of our control.