So you’ve kept your eyes open and you realize Y2K has the potential to be a lot worse than most people around you realize. You were probably one of the more alert students back in your school years, and even today, you’re far more observant than other people realize.

Because of all this, you’re far more aware of the Y2K issue than nearly everybody around you. And every time you try to explain what’s going on, they completely tune out and don’t understand anything you’re trying to say. They might even call you a radical or a whacko.

Welcome to the club.

That’s because most people react with strong emotion when you suggest their lives may be severely disrupted. Life’s hard enough for them right now, see, and they sure don’t want to hear any more bad news. Even if it’s probably correct.

Face it. A lot of people would rather drive without headlights because that way, they won’t see the edge of the cliff. When you "light up the road ahead," it scares them. Not because they don’t think it’s real; it’s because they just didn’t want to think about it, period.

Unfortunately, this mode of thinking is more than just dangerous to them. It’s also dangerous to you! The less prepared the people around you, the more danger you’re in. Therefore, it’s always in your best interest to educate the people around you about the reality of the Y2K threat.

This special report tells you exactly how to do it.

1.Realize isolated failures of critical infrastructure components are likely 2.Acknowledge and understand the interdependence of (global) infrastructure components 3.Realize the significance of every infrastructure component being struck at the same time by the millennium bug (simultaneity) 4.Acknowledge your own dependence on infrastructure components 5.Become aware of the thin-ness of the supply lines 6.Understand why public cannot be told the truth

By this, we mean that some power plants are going to be shut down. Some water treatment facilities will fail. Some banks will experience bank runs and some telecommunications centers will be out cold. Don’t forget transportation, hospitals, and food deliver, either.

In fact, here are the components we mean when talking about "infrastructure components:"

•Water treatment facilities •Food and farming •Defense •Transportation •Hospitals & emergency services •Power •Banking •Law enforcement •Communications •Fuel •Government

Put them all together, and you have a nice acronym: "We FeeD THe PuBLiC FiGs" (ignore the vowels)

Once you get people to acknowledge that some of these elements are going to fail, you’ve done the hardest part. But if people don’t get this part, they’ll never understand the rest. That’s why you have to back this up with the best evidence available.

* http://www.y2ksupply.com/index.asp?PageID=Statistics

* http://www.y2ksupply.com/index.asp?PageID=embedded

* http://www.y2ksupply.com/index.asp?PageID=Alerts

The best way to get people to realize isolated failures are likely is to show them the reports. For example, quote from the "Hearing to Discuss Chances The Millennium Bug Will Cause the Nation’s Power Grid to Fail," chaired by Senator Bob Bennett of the Special Committee on the Year 2000 Technology Problem (June 12th, 1998 statement in Washington D.C.). You can find the link at:

"I have some disturbing news to report this morning. In order to prepare for today's hearing, I directed Committee staff to conduct a formal survey. The survey was of modest proportions including only ten of the largest electric, oil, and gas utility firms in the U.S. I wanted to know the status of their Y2K preparedness. While the survey is not statistically representative of the entire industry, it does include geographically dispersed firms engaged in all aspects of power generation, and gas and electricity transmission and distribution.

I had anticipated that I would be able to provide a positive report on the Y2K status of these public utilities. Instead, based on the results of this survey, I am genuinely concerned about the prospects of power shortages as a consequence of the millennial date change.

Let me share a few of the survey findings: Only 20 percent of the firms surveyed had completed an assessment of their automated systems. One firm did not even know how many lines of computer code it had. Experts have testified before my banking subcommittee that any major firm that has not already completed its assessment, can not hope to become Y2K compliant by January 1, 2000.

None of the utilities surveyed were assured after making inquiries that their suppliers, venders, and servicers would be Y2K compliant. Utilities are highly dependent on servicers, suppliers, and other upstream activities to transmit, and distribute gas and electricity. In fact, many power distribution companies are ultimately dependent on foreign oil imports.

None of the firms surveyed had completed contingency plans for Y2K related eventualities. Even though all of these firms are required by their regulators to maintain emergency response plans, none had completed a Y2K contingency plan. My concern is that they probably don't know what contingencies to prepare for."

"The year 2000 issue is potentially the biggest challenge ever faced by the financial industry." Central bankers of the G-10 top ten industrialized countries

"The public faces a high risk that critical services provided by the government and the private sector could be severely disrupted by the Year 2000 computing crisis." General Accounting Office of the U.S. Congress

"More than one-third of the most important [government] systems won't be fixed in time." House Panel Y2K report issued September 1998

"We're concerned about the potential disruption of power grids, telecommunications and banking services." Sherry Burns, CIA

These are words from people who often have the least motivation to scare people. If anything, they are often holding back on their words. Yet you still hear dire warnings from people like Joel Willemssen, Director of the Civil Agencies Information Systems (DCAIS), Accounting and Information Management Division (AIMD) of the U.S. General Accounting Office (GAO). His statement before the Subcommittee on Government Management, Information and Technology (SGMIT) of the Committee on Government Reform and Oversight (GRO) of the U.S. House of Representatives teaches us a lot. For one thing, just announcing his statement reveals a bloated hierarchy of committees and subcommittees that, by their very nature, are virtually paralyzed in their ability to get anything done. If you’ve ever heard the joke, "What is a camel? It’s a horse built by a committee." … then you know exactly how much gets done in these things.

"According to the report of the President's Commission on Critical Infrastructure Protection, the United States--with close to half of all computer capacity and 60 percent of Internet assets--is the world's most advanced and most dependent user of information technology. Should these systems--which perform functions and services critical to our nation--suffer disruption, it could create a widespread crisis. Accordingly, the upcoming change of century is a sweeping and urgent challenge for public- and private-sector organizations alike.

Because of its urgent nature and the potentially devastating impact it could have on critical government operations, in February 1997 we designated the Year 2000 problem as a high-risk area for the federal government.

The public faces a high risk that critical services provided by the government and the private sector could be severely disrupted by the Year 2000 computing crisis. Financial transactions could be delayed, flights grounded, power lost, and national defense affected."

By using the statements given here and gathering your own from the Y2KSUPPLY.COM web site (and elsewhere), you should be able to pull together a large amount of convincing evidence from credible sources. The most complete web site, containing thousands of articles, statements and various Y2K facts, is www.garynorth.com

Citicorp $600,000,000 - $34,697 - 93,700

General Motors $565,000,000 - $166,445 - 608,000

BankAmerica $380,000,000 - $23,585 - 90,500

Merrill Lynch $375,000,000 - $31,731 -56,600

GTE $350,000,000 - $23,260 -114,000

AT&T $350,000,000 - $51,319 - 128,000

Chase Manhattan $300,000,000 - $30,381 - 69,033

J.P. Morgan $250,000,000 - $17,701 - 16,943

Bell Atlantic $250,000,000 - $30,193 - 141,000

Sprint $200,000,000 - $14,873 - 51,000

Bankers Trust $200,000,000 - $12,176 - 18,286

Owens Corning $179,000,000 - $4,373 - 24,000

NationsBank $155,000,000 - $21,734 - 80,360

3M Corporation $70,000,000 - $15,070 - 75,639

Charles Schwab $45,000,000 -$2,298 - 12,700

Textron $45,000,000 - $10,544 - 64,000

Totals

$4,314,000,000

$490,380

1,643,761

Averages

$269,625,000

$30,649

102,735

 "Doesn’t it make sense that these profit-minded companies and budget-restricted government offices would only spend this money on a real problem? If the problem didn’t exist, wouldn’t they keep the money as profits instead?"

In fact, it goes beyond that. The problem is more than real: it’s a matter of life and death for these companies… and this government. If Citibank can’t get compliant, it will go bankrupt. If the federal government can’t get both the IRS and the payment services compliant (Social Insecurity, Medicare, etc.), it will be replaced by one that can. These kind of expenditures are not just for fun, they’re for survival.

Once you can get your family and friends to understand this point, you’re past the hardest part.

"America's infrastructures are a complex array of public and private enterprises with many interdependencies at all levels. These many interdependencies among governments and within key economic sectors could cause a single failure to have adverse repercussions. Key economic sectors that could be seriously affected if their systems are not Year 2000 compliant include information and telecommunications; banking and finance; health, safety, and emergency services; transportation; power and water; and manufacturing and small business.

The information and telecommunications sector is especially important. In testimony in June, we reported that the Year 2000 readiness of the telecommunications sector is one of the most crucial concerns to our nation because telecommunications are critical to the operations of nearly every public- and private-sector organization. For example, the information and telecommunications sector (1) enables the electronic transfer of funds, the distribution of electrical power, and the control of gas and oil pipeline systems; (2) is essential to the service economy, manufacturing, and efficient delivery of raw materials and finished goods; and (3) is basic to responsive emergency services. Reliable telecommunications services are made possible by a complex web of highly interconnected networks supported by national and local carriers and service providers, equipment manufacturers and suppliers, and customers.

In addition to the risks associated with the nation's key economic sectors, one of the largest, and largely unknown, risks relates to the global nature of the problem. With the advent of electronic communication and international commerce, the United States and the rest of the world have become critically dependent on computers. However, there are indications of Year 2000 readiness problems in the international arena. For example, a June 1998 informal World Bank survey of foreign readiness found that only 18 of 127 countries (14 percent) had a national Year 2000 program; 28 countries (22 percent) reported working on the problem; and 16 countries (13 percent) reported only awareness of the problem. No conclusive data were received from the remaining 65 countries surveyed (51 percent). In addition, a survey of 15,000 companies in 87 countries by the Gartner Group found that the United States, Canada, the Netherlands, Belgium, Australia, and Sweden were the Year 2000 leaders, while nations including Germany, India, Japan, and Russia were 12 months or more behind the United States.

The Gartner Group's survey also found that 23 percent of all companies (80 percent of which were small companies) had not started a Year 2000 effort. Moreover, according to the Gartner Group, the "insurance, investment services and banking are industries furthest ahead. Healthcare, education, semiconductor, chemical processing, agriculture, food processing, medical and law practices, construction and government agencies are furthest behind. Telecom[munications], power, gas and water, software, shipbuilding and transportation are laggards barely ahead of furthest-behind efforts."

When you get down to the core of the issue, interdependence is precisely the Y2K problem. One of the best examples currently being tossed around is the auto-manufacturing industry. Ford uses 20,000+ suppliers to acquire parts for building its cars. The question to ask your family and friends is:

"Let’s assume that 5% of all business fail during Y2K. You might think that’s not too bad. But let me ask you this. Since Ford depends on 20,000 suppliers to build cars, do you think they can complete their cars if only 19,000 of those suppliers can provide parts?"

The answer, of course, is no. You can’t complete a car without all the parts – just like you can’t complete a banking transaction without all the parties being compliant. In fact, the list of such examples is huge:

•You can’t generate a single Watt of power unless the banking, transportation, power, law enforcement and fuel infrastructure components are operating at near-perfect compliance •You can’t product clean water unless the water treatment facilities have power •You can’t pay employees of any business unless the banks are open and working at near-perfect compliance •You can’t protect your country from foreign threats (terrorism or otherwise) unless you can pay your military, and you can’t pay your military if the banks aren’t open. Furthermore, you can’t feed your military unless the food & farming component is operating at near-perfect compliance. •You can’t deliver food to the cities unless transportation is operating, and you can’t buy or sell food unless banks are open •You can’t fuel the farm equipment that produces the food unless the fuel infrastructure component is operating, and many farmers can’t plan efficient crops unless satellites are operating •You can’t provide mass medical care unless the government can reimburse doctors for Medicare payments, and you can’t do anything in the hospitals unless the power is on •You can’t operate a stock market without good communications, and you can’t have communications without power. In an interesting chicken-and-egg twist, you also can’t have power without communications because many power plants and hydro dams are controlled remotely

The interdependencies are too numerous to list here, obviously, and they create an enormous web of interconnected parts. While this fact is often hidden from view in modern daily life, it’s always there.

Here are five examples you can point to that demonstrate the interdependencies (and consequential vulnerabilities) of modern society:

•In 1998, the Galaxy IV satellite spun off course, causing the instant failure of most pagers (and some cell phones) in the United States •In 1998, AT&T’s frame relay backbone collapsed for a few hours, putting tens of thousands of business "out of business" while they attempted to fix the problem. Businesses lost computer connections, credit card processing capabilities, and other telecommunications services. •In 1997, a tree fell on a power line in Idaho, causing the immediate loss of electricity to over 300,000 homes in California and Nevada •In 1996, a single line of code that was programmed incorrectly caused a cascading failure of AT&T’s switching networks, resulting in a massive failure of long distance services covering the Eastern United States until the problem was finally tracked down and reprogrammed •Coming in August of 1999, the Global Navigation System (GPS) will incur a pre-programmed error that will cause many GPS systems to calculate the wrong date. More specifically, the GPS system will lose 1024 weeks. This has already been announced by the U.S. Navy and is due to a known programming error that can’t be fixed because the satellites are already in orbit.

In the examples given above, each outage, though severe, was isolated. The rest of society could function until the problems were fixed. Although we’ve all seen the impact of isolated events like the ones listed above, or even voluntary events like the UPS strike of 1997, nobody alive has seen the impact of simultaneous failures in every infrastructure component.

Whereas in normal times you have other areas that can take up the slack, during Y2K, you have none. The banks will be struggling with computer failures at the exact same time the telecommunications industry will have their own problems. Transportation will be in a state of chaos at the exact same time fuel may be difficult or impossible to acquire. Emergency services will be down while law enforcement is simultaneously threatened. The simultaneity of these events magnifies the threat on a logarithmic scale, where each new failure compounds the seriousness of each previous failure.

•Unless the Federal Aviation Administration (FAA) takes much more decisive action, there could be grounded or delayed flights, degraded safety, customer inconvenience, and increased airline costs. •Aircraft and other military equipment could be grounded because the computer systems used to schedule maintenance and track supplies may not work. Further, the Department of Defense could incur shortages of vital items needed to sustain military operations and readiness. •Medical devices and scientific laboratory equipment may experience problems beginning January 1, 2000, if the computer systems, software applications, or embedded chips used in these devices contain two-digit fields for year representation. •According to the Basle Committee on Banking Supervision--an international committee of banking supervisory authorities--failure to address the Year 2000 issue would cause banking institutions to experience operational problems or even bankruptcy.

The federal government also depends on the telecommunications infrastructure to deliver a wide range of services. For example, the route of an electronic Medicare payment may traverse several networks--those operated by the Department of Health and Human Services, the Department of the Treasury's computer systems and networks, and the Federal Reserve's Fedwire electronic funds transfer system. In addition, the year 2000 could cause problems for the many facilities used by the federal government that were built or renovated within the last 20 years and contain embedded computer systems to control, monitor, or assist in operations. For example, building security systems, elevators, and air conditioning and heating equipment could malfunction or cease to operate.

Agencies cannot afford to neglect any of these issues. If they do, the impact of Year 2000 failures could be widespread, costly, and potentially disruptive to vital government operations worldwide. Nevertheless, overall, the government's 24 major departments and agencies are making slow progress in fixing their systems. In May 1997, the Office of Management and Budget (OMB) reported that about 21 percent of the mission-critical systems (1,598 of 7,649) for these departments and agencies were Year 2000 compliant. A year later, in May 1998, these departments and agencies reported that 2,914 of the 7,336 mission-critical systems in their current inventories, or about 40 percent, were compliant. However, unless agency progress improved dramatically, a substantial number of mission-critical systems will not be compliant in time."

This realization falls squarely under the "we take it for granted" category. And we do! In a time when we watch our parents or grandparents in utter amazement as they pick up a single grain of rice and put it back in the bowl (because they lived through the Great Depression, see?), we are generally wasteful, resource-insensitive people. We throw away almost as much as we actually consume because we know we can "get more" by just going down to the grocery store. If that’s closed, Taco Bell is open, right?

Step 4 is usually fairly easy to realize once you ponder the reality of the situation. We do depend on these infrastructure components, and almost none of us are truly aware how much we do.

Electricity alone is something we take entirely for granted. To demonstrate this to yourself, try this:

•Go to the main circuit breaker box of your home or business and shut off the main power •Stay in the house for 24 hours and see if you can actually live there

If you survive that, try shutting off the gas and the water, too. See how long you make it before you return to "the infrastructure."

As another experiment, try to spend an entire month eating only the food you have in your house or your garden. Most people wouldn’t last a week, much less a month. Yet if food supplies experience a shortage, we may all need to live on our supplies for months!

Another good way to get people to realize their dependence on the infrastructure is to have them agree to write down everything they use during any single day that costs money. If it costs money to use it or consume it, they should write it down. For most people, you’ll end up with a list that’s hundreds of items long, covering everything from gasoline to lunch. If you pay money for it, it probably depends on the infrastructure. Furthermore, money itself depends on the infrastructure.

This is another point that isn’t so obvious. After all, the shelves always look stocked full when we go to the grocery store, don’t they? Don’t these companies have warehouses full of food in the back?

Not really. The invention of "just in time" delivery systems means that food arrives just in time to avoid leaving a shelf empty. Walmart, for one, has revolutionized this concept and dramatically cut costs in the mean time. One reason their goods are so affordable is that Walmart isn’t paying for storage facilities and locking up capital in inventory. Their computers track inventory and automatically administer the next day’s orders, which are shipped in just in time to keep the shelves full. Even a single missed delivery day has an impact at Walmart, and if they miss a week, you’ll really notice it on the shelves.

The same is true at grocery stores. More importantly, it’s also true with banks. Banks stock "just enough" reserves to handle requests for cash by depositors. They don’t actually keep your money in the back room, waiting for you to ask for it. This is called "fractional reserve banking," and it’s the backbone of our money supply and loan system. It’s healthy in boom times, but it also creates potential problems when the supply of reserves is very small and the demand for withdrawals is very large.

According to the Federal Reserve, only $150 billion in reserves actually exist to cover current deposits of around $3.6 trillion (although they are increasing that number by printing an additional $50 in currency) Link is at:

 That’s a 4% overall level of reserves, which means for every $100 you have deposited in your bank, they have around $4 actually sitting there. If you go in and ask for your $100, they can easily give it to you, but if just 4% of the depositors ask for their money, the bank goes broke. If half the people ask for their money, only the first 4% actually get it. This is called a "bank run" and it’s a legitimate likelihood during Y2K which is why the Federal Reserve is right now getting prepared by printing an additional $50 billion in currency.

Here are some action items you can follow if you’d like to check out just how thin the supply lines really are:

•Tour the Walmart facility in Arkansas and learn how they schedule just in time deliveries •Contact your local grocery store and ask how many days of extra food they keep on hand •Contact your bank and ask for a financial disclosure statement – they have to give you one by law. Then look for what percentage of reserves they actually keep (as a % of deposit obligations) •Contact a food supplier in the long-term storage industry or the survival industry. Ask how many months it will take them to ship your order

The more you investigate all this, the more you’ll find the supply lines are very thin in many areas of society: money, food, goods, fuel, and so on.

Simple. To inform the public of the real threats would actually cause many of those threats to unfold. It’s classic panic-psychology. If you tell people "corn supplies are critically low," they will run out and buy corn to avoid the shortage. This behavior will cause the corn shortage to worsen, creating a self-fulfilling prophecy.

This especially holds true in the banking industry. If you warn people that their deposits might be threatened, they’ll take their money out. Doing that will cause the bank runs, worsening the threat to deposits.

For this reason, the public cannot be – and won’t be – told the truth. No public official can possibly acknowledge the validity of this statement without simultaneously violating it.

This author believes various departments of the federal government are now engaged in a policy of disinformation regarding the real Y2K threat. Although some isolated, brave individuals like Willemssen will continue to speak out about the dangers lurking ahead, most government officials are taking the well-trampled path of, "Hey, everything is fine!" You hear this from the FAA, Social Security, the IRS, Medicare, and even the Dept. of Defense. Yet we continue to see admissions that those statements really aren’t true. As stated in the DCAIS-AIMD-GAO-SGMIT-GRO report:

"OMB's assessment of the current status of federal Year 2000 progress is predominantly based on agency reports that have not been consistently reviewed or verified. Without independent reviews, OMB and the President's Council on Year 2000 Conversion have little assurance that they are receiving accurate information. In fact, we have found cases in which agencies' systems compliance status as reported to OMB has been inaccurate. For example, the DOD Inspector General estimated that almost three quarters of DOD's mission-critical systems reported as compliant in November 1997 had not been certified as compliant by DOD components. In May 1998, the Department of Agriculture reported 15 systems as compliant, even though these were replacement systems that were still under development or were planned for development. (The department removed these systems from compliant status in its August 1998 quarterly report.)"

The state of California also recently admitted announcing misleading status information regarding their Y2K progress. In response to the realization that many California State computer systems could not possibly be fixed in time, one prominent state legislature Congresswoman is on the record saying, "Cross your fingers."

 Again, if she had told the public what they really needed to know, she would have said, "Get your money out." Or, "Stock up on food." Instead, she says, "Cross your fingers," which is not only devoid of any really helpful advice, it’s also quite revealing of the roll-of-the-dice attitude now seen by many people in government who feel helpless to solve the issue.

Yet they realize they still can’t tell the public, because the "madness of crowds" is a well known phenomenon. The L.A. Riots are just one example of what people will do when they share a common, amplified emotion. If anger can cause people to burn down their own neighborhoods, pull innocent victims from their vehicles and beat them to death, and unleash lethal firearms attacks on firemen trying to save their homes, what will unbridled fear cause if the people are told the truth?

While some people will never "get it," the six steps covered in this report can help you get through to the people who still have some critical thinking ability remaining. In a world of emotion and reaction, it’s sometimes difficult to use step-by-step logic and reason to explain Y2K to people, but this recipe is the best I’ve found.

It works. Use it, and you’ll find that you can get the people around you to understand where you’re coming from. Naturally, the more they understand Y2K, the less of a threat they’ll be to your survival should the worst happen.

To learn more about Y2K survival, preparedness, and events, visit www.y2ksupply.com and sign up for the free e-mail alert.

Nobody knows! Intelligent, educated people can certainly disagree on the predictions of what will happen during Y2K, and virtually nobody will be exactly right. Chaos is simply too unpredictable! This author believes there is a small but legitimate chance that nothing of consequence will occur, but there is a much larger chance that a "bad case" scenario will appear. Even the "worst case" scenario seemingly has a larger chance than the "no case" scenario, given all the evidence mentioned in this report.

As we get closer to the actual deadline, we’ll learn more. If progress is made throughout 1999, we may reduce the chance of a worst-case scenario, but if the same misleading information continues to be dished out to the public, and the government committees continue to "look into it" instead of actually fixing it, we’re in for some very tough times ahead.

And because we don’t know what will really happen, it is prudent to prepare for the worst. That means taking basic precautions on food, heating fuels, and medical supplies. It means creating an alternate, hand-powered water source and thinking long and hard about what will happen in the cities if Y2K strikes and "social order" melts into social disorder. These are topics worthy of serious consideration given that no society has ever faced this particular problem.

If you’d like more information on getting prepared for Y2K, the Y2KSUPPLY.COM web site offers a complete "Y2K Sourcebook" that gives you detailed shopping lists covering exactly what you need to buy to get prepared for Y2K, item by item. It also lists 17 key survival-industry suppliers that typically sell preparedness products at 50% or even 25% of the price you’d pay retail. Items covered include food, water, tools, shelter, heating & light, medical supplies, self-defense, money, cooking utensils, and more.