Say it aint so Feds, you mean fractional reserve Banking that all the Gloom & Doomers have been talking about for years is a realitygreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Sorry, but I just love to hear the feds tell us what we should think or how we should act. Did they just let something out of the bag?
"Under normal circumstances, the Federal Reserve holds approximately $150 billion in reserve"
[Geez, when you toss in another $ 50 billion you'll have $200 billion, lets divide that by 100 million families - WOW a staggering $2000/per family]
"Domestically, consumers may decide to hold extra cash to make routine household purchases such as food and gas, but it is unlikely that people will hold a significantly higher proportion of their wealth in cash than they normally do because such a move would be costly. Most people prefer to keep their savings in insured bank deposits and interest-bearing accounts rather than at home."
[At 2 % interest on there savings can you blame people - Hell, you could make a couple of bucks a year at that rate]
"About two thirds of U.S. currency is held outside the United States."
[Say it aint so Feds, you mean fractional reserve Banking that all the Gloom & Doomers have been talking about for years is a reality]
Federal Reserve Will Boost Currency Supply in Preparation for Year 2000
The Federal Reserve has devoted significant resources to ensuring that financial systems, including payment systems, will operate without disruption over the century date change. We are confident that our nation's financial system and its key infrastructures will be prepared for the century rollover.
Although we do not anticipate that there will be major or prolonged difficulties accessing cash, the public may do its own contingency planning by holding extra cash during the century rollover period. In order to be prepared for such an occurrence, the Federal Reserve will be ready to issue more currency into circulation, when and if demanded by the public. This will be accomplished by asking the U.S. Treasury to print additional currency - just over $50 billion for domestic contingency and $20 billion for international contingency purposes. Under normal circumstances, the Federal Reserve holds approximately $150 billion in reserve, and we estimate that the substantially higher amount of currency available for the century date change will more than adequately meet demand.
Domestically, consumers may decide to hold extra cash to make routine household purchases such as food and gas, but it is unlikely that people will hold a significantly higher proportion of their wealth in cash than they normally do because such a move would be costly. Most people prefer to keep their savings in insured bank deposits and interest-bearing accounts rather than at home.
About two thirds of U.S. currency is held outside the United States. The Federal Reserve is planning to have enough currency available to at least equal the past highest monthly U.S. currency inflow to each country. This reflects the amount of U.S. currency that each country can absorb in a given period and should more than adequately meet foreign demand.
The Federal Reserve will take steps to ensure that financial institutions will be able to obtain currency from us in a timely manner to meet the needs of customers during this time period. If necessary, we will be prepared to extend the hours of our Cash departments or take other operational steps to fill currency orders. More information will be available in 1999. If you have questions about the adequacy of the currency supply, please contact the Cash Officer at your local Federal Reserve office.
Financial Institutions Should Launch Own Cash Contingency Plans
Although the Federal Reserve Banks plan to have extra currency in their vaults and are willing to implement extended work hours to accommodate unforeseen cash needs during the Y2K transition, each financial institution must launch its own contingency planning effort to be adequately positioned to meet the demand that may be placed by its customer base. At a minimum, the depository institution's plan should address the following issues:
the nature of its customer base, including retail and/or individual accounts, and an estimate of additional cash needed to meet the potential spikes in demand for cash;
periods when increased demand for cash may be expected and the need to order a greater than usual amount of cash from the Federal Reserve during these periods;
a review of vault capacity, insurance limits, etc.;
a review of ATM locations and the need to replenish ATMs with currency more frequently during the Y2K transition; and
a review of contingency plans of related vendors such as armored carriers and correspondent banks to ensure that adequate support will be received from them during the Y2K transition.
Promoting the Safety of the Currency Supply
As we count down to the year 2000, one of the issues being reported in the media is whether the U.S. currency supply is adequate for the century rollover. Media speculation that cash reserves might be depleted can lead to reactions we would like to avoid - public concern and hoarding of cash.
As part of the industry's proactive stance on year 2000 issues, financial institutions can play an important role in reassuring customers that the nation's money supply is not in jeopardy. All financial institutions may want to consider a communications campaign that focuses on the safety and soundness of money deposited in banks, credit unions, and savings and loans. An important component of that message is that customer deposits are insured to the legal limit by the FDIC and NCUA and will be fully accessible during the transition.
-- Matt (Butenam1@aol.com), January 22, 1999
Don't know about you rich folks, but for the 95% of us below that line, any extra should have been turned into prep by now. You will get a lot better return.
-- Mitchell Barnes (firstname.lastname@example.org), January 22, 1999.
As the masterful PNG recently related on Japanese banking,
you owe us? Well, you don't have to pay it back and we'll probably give you more cash on top of that because the government will give us the money to cover it."
My question is why are they asking the bank executives? Banks don't have any money. Towa Real Estate borrowed the depositors' money and promised to repay it with interest.
The government doesn't have any money to give to the banks to offset these bad loans. The taxpayers' money is being given to the banks to offset the depositors' money mishandled by the banks and Towa Real Estate.
-- a (email@example.com), January 22, 1999.
"As part of the industry's proactive stance on year 2000 issues, financial institutions can play an important role in reassuring customers that the nation's money supply is not in jeopardy."
Can you say, PR? can you say, disinformation?
I knew you could. That's a good sheeple.
-- Chris (firstname.lastname@example.org), January 22, 1999.
Has anybody calculated in the operating money all the small businesses across America have to keep on hand just to do business, and the fact that many will probably refuse to accept checks in the later months of the year?
-- Nikoli Krushev (email@example.com), January 22, 1999.
Or, what would be the effect of this situation on businesses that receive most of their income in the form of cash, like movie theaters?
-- Kevin (firstname.lastname@example.org), January 23, 1999.