Re: Y2K-Plan of action..

Michael S. Lorrey (
Mon, 15 Feb 1999 08:19:13 -0500 wrote:

> Brent Allsop [] wrote:
> >Could this really cause such a collapse?
> Yes. I don't know what the average salary is these days, but as I said
> before, *after* they've printed all that extra cash, assuming none of it
> goes offshore as most dollars have in the past, there will be about $800
> per person available. That's it. Either they can start printing even
> larger amounts of money and risk hyperinflation, or they have to stop
> people taking out large amounts of money.
> The biggest problem is that a lot of people who have a lot more than $800
> in their bank accounts are discovering this.

Yes, my bank, Citizen's Bank, is starting to tighten up its policies. They used to cash any check brought in by a long time account holder, no matter what you account balance is. Now they are getting strict about there being at least as much money in your account as the check is for before they will cash it. Otherwise, you have to deposit it and they are taking the full 24 hours to activate the funds in your account, and they want to violate the covenant they had with First NH Bank when the bought it and stretch it out to two days like they have with the rest of their customers. Not only that, but when you deposit an amount larger than your current balance, they freeze your entire account till the check clears, which can cause your own checks and account linked credit card charges to bounce.

> This leaves us with a choice:
> 1. Take out the money, have it all at home where it may be useful.
> 2. Don't take it out, potentially lose access to it for a long time,
> potentially have the banks collapse and lose it all, if other people
> take theirs out.
> As I said, this is a prisoners' dilemna situation, and the rational solution
> is to take the money out. And since we've recently seen similar situations
> in Russia where those who took their money out did well and those who
> didn't lost out, we have even more encouragement to be rational.

I'm just going to deposit every other paycheck now, and cash the others. My own living expenses are actually less than half my income now anyways, so I can make my monthly payments on the deposited sums. If the bank goes under, I most likely won't have more than a week or two's pay in the bank....

The biggest cause of economic turmoil at y2k will be caused by people panicking. Fear is the most palpable economic force.

Mike Lorrey