The first indication of how financial professionals expect Y2K (The Year 2000 Problem) to affect the economy has appeared in the form of a financial futures trade that reveals their private thinking on this matter. This trade, which consists of a combination of long (purchase) and short (sale for later repurchase at a lower price) positions in financial futures instruments, shows that they expect a spike in interest rates to occur late in 1999. By March of 2000, they expect interest rates to return to normal.
What this says is that they do not expect the economy to be destroyed, but they do expect that so many people are going to temporarily withdraw cash, or have cash become inaccessible because of computer glitches, toward the end of 1999 that there will be a temporary lack of money in the system, and it will become more expensive to borrow.
If we have a Y2K problem in the United States, it is not a real, physical issue. Our problem is fear. The United States may well suffer some dislocations and power outages over the turn of the millennium, due to computer malfunctions. But the reality will be much less severe than expected, as is attested by the actions of these financial professionals, who expect the problem to be a very short-term one, and not to result in the collapse of the whole system.
What should we do? Keep five days worth of canned goods from the grocery story and a comfortable amount of cash at home. Get a battery powered or crank-up radio, preferably one with emergency band on it. Be at home in the U.S. for the millennium, preferably with all family members together. Be sure that you can stay warm if there is a power outage in your area.
If that happens, and you temporarily lose power and/or phone service, stay at home with your family.
Above all, celebrate the coming of this new era. Because mankind is NOT on the brink of disaster. We have experiences five thousand years of slow improvement. History has been a triumph of the human spirit. We are healthier, better educated and more civilized than ever before.
There are plenty of environmental problems out there^×and I am about to issue a warning about a very serious one that nobody expects-- but we keep figuring out how to solve them. Unless our efforts are stymied by the onset of extremist government in our country, we are going to win big in the next millennium.
How big? I am partly in the business of making predictions, so I will make one for the year 2050:
Unless we are visited with an environmental catastrophe in the next twenty or thirty years, the population of earth will be about what it is now. We will be expressed, to a lesser or greater degree, into space. There will be more than one space platform, and man will have been to Mars. Our lives will be well- educated and generally prosperous, with the exception that people in the grip of dictators or religious extremists will still be suffering needless privation. If the United States goes through a period of religious government, then a united Europe will be the world's superpower. In any case, the U.S. will be sharing superpower status with Europe, and the euro and the dollar will be competing for domination as the world currency. This will not be a hostile competition, any more than the competition between Coke and Pepsi is hostile-- just very, very intense. Science will have exploded in a thousand different directions. There will be cures for every ailment presently known. The biological clock will be under control. Ages of 125+ will not be uncommon. For many people death will be a matter of intentional choice, if at all.
NOTE: This Journal entry, previously published on our old site, will have any links removed.