Beat the Clock
Millennium money. The Federal Reserve Board of
Governors has confirmed rumors that it is socking away an extra $50 billion in cash
reserves for fiscal 1999, just in case unprecedented numbers of uneasy bank customers
withdraw cash from their accounts in December 1999.
But the Federal Reserve governors would hate to send the wrong message in publicizing
this action, spokeswoman Lynn Fox said.
The message is not that were putting aside a bunch of money for bank
runs, she said. The message is well make sure that whatever currency the
public demands, well have available.
The $50 billion will supplement $200 billion in currency already in the boards
inventory, held in reserve until needed.
Measured against the $480 billion in currency now in circulation, the boards
request to the Bureau of Engraving and Printing for an extra $50 billion is not a huge
amount, Fox said.
And if $50 billion extra isnt enough to cover holiday and pre-2000 cash draws,
there will still be time to keep the money supply flowing, she said.
A dry state? Virginia officials are worried about a
different kind of supply problem.
State-owned liquor stores, a major source of revenue for Virginia, could have
computer-induced inventory problems because many overseas suppliers are not far enough
along in their date code fixes, said Betty Dillehay, director of the Century Date Change
Initiative Project Office for the Commonwealth of Virginia.
Dillehay said she first suggested to state officials that the liquor stores should
stockpile a three-month supply of alcoholic beverages, but then she remembered that the
state is required to pay its bills within 30 days of purchase.
She realized there might not be sufficient cash flow to pay for three months
worth of liquor all at once.
A quart low. Dillehay called the state controller to
ask whether anyone had considered the financial impact on the state if all departments
began warehousing extra supplies in anticipation of potential shortages around Jan. 1,
You can see how this 2000 thing just begins to snowball on you, and if
youre not careful it will overwhelm you, Dillehay said.
Virginia is not alone in thinking ahead about laying in supplies. Michael Alan
Aisenberg, a partner in the law firm of Galland, Kharasch, Morse and Garfinkle in
Washington and a former Digital Equipment Corp. lobbyist, said supply chain operations
everywhere in the nation have grown thin because of the current popularity of just-in-time
After several years of replacing life-support systems with information
systems, Aisenberg said, the United States economy is more vulnerable than in years
past to computer-related disruptions in the flow of goods and services.