Gary North, a 1972 UC Riverside Ph.D. and libertarian economist, warns Y2K’s global codebase—500M+ lines at AT&T, Sprint, MCI—is riddled with flaws, including non-compliant nuclear plants (e.g., Texas’s $300K fix for 85% of its power) and military systems (8,000 mission-critical failures). Banks, airlines (FAA’s IBM reliance), and prisons face collapse due to legacy COBOL/Assembler bugs and embedded chip defects, with North predicting bank runs by April 1999, triggered by Japan. Even paper money risks devaluation as electronic systems fail, urging cash, gold, and food stockpiles—like his two-year supply—while dismissing corporate compliance claims. Legacy mainframes, unlike microcomputers, can’t be patched, threatening supply chains, pensions, and societal order, with China potentially rising post-crisis due to its pre-digital military. A 60-day power grid failure could unravel Western civilization, making self-sufficiency critical. [Automatically generated summary]
Well, I suppose it depends on exactly which Styx you're into.
My goal here was to get as far away as I could from any major metropolitan area without going completely into, say, northern Minnesota, which my wife really was not too enthusiastic about.
And then I've also, at the same time, got access to the University of Arkansas Library, which is very important to me because I still do my writing.
And so I want it to be close to a good library, but yet pretty much away from a large city.
Well, in all honesty, all I need is available on the Internet, but I do write some material, historical material, where that has not been put onto the web yet.
But yes, you're correct.
As far as my business is concerned, yes, I can do it and do most of it off of the Internet.
That's going to depend very heavily on how well and if the telecommunication industry gets itself compliant.
And at the present time, it does not look good.
You can't have the Net if you do not have functional phone lines.
And AT ⁇ T has about 500 million lines of code to correct.
Sprint has about 100 million.
MCI is not saying, but since it's about halfway between the two, it's probably 250 to 300 million lines of code to correct.
This is an enormous undertaking for these companies.
So if they get it compliant, yes, there is at least a possibility that the web will stay up, but we do not have any large telecommunications firm claiming compliance at this time, which means the news is probably not good.
Yes, I did decide, and one of the strong reasons I decided, in fact, come to the region where I came, is that it is still possible for a private citizen to buy property that does have natural gas on it.
There are several regions where you can do this in the United States.
Eastern Kentucky, eastern West Virginia, you can find properties like this.
And so I decided that was a way of preserving electrical power should there be blackouts.
About two weeks ago, the Nuclear Regulatory Commission sent out a letter to every power plant in the U.S. that is under their jurisdiction, about 108 of them, and said, gentlemen, you have 90 days to get to us a complete report on how you plan to be completely compliant by July 1st of next year.
I don't think it is, but if it is, we don't have a working model.
And that's your problem.
Let me give you an example.
This is a real horror story, although there are lots of them that we could talk about, but this one really stunned me.
Governor Bush of Texas found out about Y2K probably sometime last fall, and in November sent a letter out to the state agency saying we want to know if you're compliant, fine, but if you're not, then let us know when you intend to be compliant.
And this went out to the Public Utilities Commission to all of the power generating plants in the state of Texas.
Now, seven of those plants generate about 85% of all of the electrical power in the state of Texas.
Those plants, one of the representatives of those plants testified about three weeks ago to Congresswoman Morello's committee in Washington.
At that time, this public utility representative said, on average, these seven gigantic firms have allocated $300,000 to fix the problem.
Now, at that same testimony, PEPCO, which is the company that supplies the power for the capital of the United States and the regional area of Maryland, said, we have allocated $10 million, and we do not expect it possible to be able to keep that allocation that low much longer.
Now, the disparity is enormous.
The difference between $300,000 allocated this late in the game and $10 million indicates that the plants in Texas are simply not going to make it.
It also says you believe Western civilization could actually collapse in the year 2000 if the power grid goes down for over 60 days.
I was on a Lynn Samuel show on WABC earlier tonight doing a sort of a thing, a one-hour thing with her.
And I told her, Lynn, if you doubt what will happen, just go to the fuse box in your home and throw the mains off and start walking around your house or apartment and see what a dead place you're living in.
Now, there was a movie called The Trigger Effect, Gary, in which the power went off.
I don't know if you happened to saw the movie.
And do you think that's a good example of what would happen if the grids went down?
The problem of the trigger effect, some of the script was quite good.
I don't think the movie as a whole was.
But there were some sections of that movie which people really should watch very carefully.
One was the section of what happens in the supermarket, and the other was the section of what happens in the local gun store.
Those two sections are worth watching the movie.
The problem with that movie, which presumably it's Los Angeles they're talking about, is that when the power goes down, it goes down for three days or four days before people really sense that it may not come back on.
Then they head for the open highway.
The fact of the matter, Art, is that at that point in Los Angeles County and the L.A. Basin, you would not get onto that highway.
It would be wall-to-wall, bumper-to-bumper stalled cars.
It would be like a gigantic candle that the lights had gone out and the wick had gone out.
A good example of that, Gary, is this last winter in Chicago.
They had some terrible snows.
And what happened is, and I'm sure it's exactly the same thing, that a bunch of cars got up on the freeway and they ran out of gas and they stopped everybody else.
And before you know it, you had 13 miles of cars with people in danger of freezing to death.
Now, that's exactly what would occur because people trying to get out of town would get up there and run out of gas and they would stop everybody else.
The best example of this I ever saw was forecasted in a book which I downplayed and dismissed and I think did so erroneously over 25 years ago.
A book written by Roberto Vaca called The Coming Dark Age.
And in that book he has a description of the freeway blockage when a power system goes down and stays down.
The United States government is aware of this and over the last six weeks has begun making plans to, I believe, I think there's no other way of explaining it, of implementing a martial law situation in 2000.
They're doing it under the guise of the phrase cyber terrorism, which is okay because that really is in effect what we're dealing with, except we did it to ourselves.
The St. Patrick's Day speech by Secretary of Defense Cohen to the National Press Club was very clear.
They are setting up right now a fusion of the National Guard units and the Army Reserves.
And they are specifically doing this because they have said we're going to be hit by cyber terrorism in an unstated period of time, but they say it is inevitable.
And the next day, General Schultz released a press release saying, yes, the war is going to come to America.
We are going to be hit by these terrorist attacks.
And we have to have an emergency, essentially a SWAT team or rapid deployment force to keep peace in the cities.
And by the way, let me say this tonight, and I want the listeners to understand, what I say about the web or the documentation is on my site.
You can click to the documents.
Now, I will interpret, and I'll tell you when I'm doing that.
But if you're talking about did Cohen give the speech, did Schultz release the press release, not only did they do it, you can get it on my site and read the original document.
Okay, an obvious question, and when we come back, we're about to break here at Bobadale, but when we come back, a lot of people are going to want to know, well, how come we can't just fix it?
I mean, how come we just can't go in and make two more spaces and modify the software very simply?
Why is this a big problem?
And why are we saying it's too late to fix it?
So hold on, Gary, we'll be right back.
My guest is Gary North.
And as I told you earlier, he is the thousand-pound gorilla of the Y2K thing.
Along with about one or two others, the predictions really are extremely dire.
And tonight, you're going to find out just how serious it's going to be.
No cash.
If we have a cash economy, that means people are going to start making a run on banks as we enter the second half of 1999.
Visa MasterCard is the largest of the success stories that we have.
There's nothing other, no other that I know of comparable.
The basic problem, Art, is that it's not just the program itself, it's 30 years of data.
30 years of information that in the old days was key-punched in and that is filled up, which constitutes now something in the range of three-quarters of all the information that we have in the Western world today, is in a mainframe computer somewhere.
And I've called it the Alzheimer's economy, because when you cannot access the data, and you can't access it because it's in the wrong format, that it thinks that 00 is 1900 instead of 2000, and all of the numerical programs to access that data are accessing the wrong century, that data, or those data, technically, plural, those data simply disappear from view.
If the bank runs begin when I think they will, which is the second half of next year, and I may be overly optimistic they could begin as early as next April, what you're going to see then is the classic problem of every fractional reserve banking system, and that is the money isn't in the bank.
It's been loaned out.
It's in the company's coffers.
They've gone in, they've borrowed money, they've got their plans operating, they're paying their people, they're supporting inventory or whatever has to be done with the money.
The money's not in the vault.
The money has been loaned out.
The difficulty then is that all over the world, people have been told you may get your money in cash on demand.
When the Japanese housewife figures this out, which I think will happen probably, begin to figure it out next April, because they're on a fiscal year on April 1st, which rolls into 2000.
And when the Japanese housewives begin to understand that the Americans have sold them computers that do not work, I think the run will begin in Japan.
The same day, by the way, Canada rolls over into 2000, and New York State rolls over.
I expect that computer systems will begin to break down in both those countries, that they will begin to act haywire.
Bad data will be spewed out of them.
People will begin to realize there is a fundamental problem.
Some will shut down.
And the word will get out that something fundamentally is wrong with the system.
But the public will finally realize it can't be deferred anymore.
And all the background noise, which Y2K is right now, its music is all it is.
Because people do not understand that it's real.
When they finally begin to perceive that it's real, they're going to say things like, well, maybe I ought to get a little cash out of the bank just for safety's sake.
And the difficulty is, is that when enough people do this, and as the lines get longer, people will say, maybe I ought to get even a little extra out of the bank more than I planned.
And by the time they're at the front of the line, it's give me it all.
And of course, they can't do this.
So there will be a shutdown of the banking system.
They will simply say you cannot get your money out.
That cannot be done.
It will not be done.
And they will impose emergency banking orders.
At that point, you have the rationing of money.
They've never done it before, but they're going to have to do it then.
It means that you will be limited on what you can spend and what you can take out in the form of cash.
You will not be able to get access to cash, which will create probably an enormous havoc problem for coin-operated vending machines or anybody connected with that industry.
That industry will be in really big trouble a year from now.
And then, as people realize that they can't get their cash out, that their money has been locked up on a permanent basis, then they're going to look to say, what can I do with my money?
Where should I put my money?
What kinds of things do I need now with my credit card or with my checks?
Because if it's this bad now, what should I do with my money?
And that is when I think you will begin to see selling, perhaps even earlier, but selling out of the stock market around the world of people saying, I'm going to buy things.
I'm going to buy consumer durables.
I'm going to get my hands on stuff instead of electronic promises to pay.
Does this mean that people go out and run their credit cards up to the limit?
Yes.
Let me tell you an interesting story, Gary.
We once were talking about the possibility of a comet, like we'd get about three or four months' notice that a comet was going to crash into the Earth.
And we were talking just humorously about running our credit cards right up to the limit, because who cares, right?
And so some lady in my audience called, it was either Visa or Mascard, one of the big ones, and actually asked them, and they put a management person on the phone and gave her an honest answer.
They said, you know, we've actually considered that, and our answer would be, we would allow everybody to run their cards right up to the limit, because what do we have to lose?
On the one hand, if the comet hits, we're all gone anyway.
But on the other hand, if it misses, look how much money we've made.
Now, and let's assume I really think it's going to come.
Do I want to loan, for example, my money at 7% for a 30-year mortgage for somebody else to buy a house if I really think there is a suspicion that the electronic records of the transaction and the bank's solvency is in question?
Am I going to loan 30-year money at 7% if I really think I can't get it back because of failure of electronic impulses?
So my assumption will be the one thing you can be absolutely sure of is that when the banks say you cannot get your cash out, the response of the public is going to be that I'm not putting any more in.
And at the same time, you will get exactly the credit card effect that you're describing.
So your classic squeeze takes place.
You have very high demand for loans running the interest rates up, and you have very low desire on the part of lenders to give the institutions any extra money to make those loans.
And so the difficulty you have is everybody is saying, oh, well, you go first.
It's the you-go economy.
Everybody else says, you spend the $300 million or the $400 million.
Let's see you get it done first, then we'll think about getting it done.
If the power grid acts like it did in New York back in 65, where it's an unpredictable event, and it is unpredictable because we don't know how these systems will respond because of the programming, and we don't know how they will interact.
If the grid overloads, then you have a crisis of monumental proportions.
I can't tell you there's an official out there saying this is true, but let me tell you, Art, what they do say, the Electric Power Research Institute, which is the $500 million a year think tank of the electrical industry, was approached by a Businessweek reporter in February.
And he reported in March that when he asked them, can this system go down, will it be able to be maintained, the answer is, we don't know.
I mean, the point is, if you can't fix it when interest rates are 7%, if you can't fix it when everybody's content to live in the city and you've got whatever programmers you have out there working on it at exceedingly high wages and rising, if you can't fix it now, how do you fix it if there's no bank?
If you can't pay your programmers, why are they going to sit in New York and Chicago in the middle of winter of the year 2000 to sit in a freezing building to work on computer code?
Well, railroads and, well, listen, I live out here in the desert and I can assure you Las Vegas is almost entirely dependent for its food and everything else on trucking.
However, and of course both are completely vulnerable, but let's talk about the trains because Las Vegas is presumably bringing in its stuff from larger cities, grain processing plants, and so forth.
They have been working on getting compliant since 1995, and I checked their website today.
They are still not compliant and not putting any date on when for sure they're going to get compliant.
They all hope they're going to get compliant next year, but nobody is sure.
The difficulty is if there are problems with the train switching systems, all computerized and mostly run out of Florida, if those train switching systems begin acting haywire, then the engineers have got to stop those trains until the situation is fixed.
Now the difficulty is it takes something like three train loads of coal per day to run a large city's power generation plant per plant.
If there's any interruption of the coal shipments, then what you're talking about is a breakdown.
Again, the running out of power to generate the power stations in the cities in the middle of winter.
Now, I'm willing to say, okay, someone out there may have this great solution, but I have been spending 20 to 30 hours a week of donated time that I'm just doing because I want to do it.
I've been spending this amount of time since January of 1997, and I have yet to see any public document in which this is even discussed.
They generally do not discuss year 2000 as the basis of it, though there is one document in which it is marginally mentioned.
And that is on the President's Commission, what's called the PCCIP, the President's Commission on Critical Infrastructure Protection.
This was created by executive order in July of 96.
And they have a fact list, a frequently asked questions list.
And if you go to that fact list, and I've got it on my site, they do say that the effects of the year 2000 problem are comparable to a terrorist attack.
That's all they say.
They don't go into it.
They don't talk about dealing with it, but they do admit it.
Gary Nort received his PhD from the University of California at Riverside in 1972, was a congressional research assistant to Congressman Ron Paul, a Republican slash libertarian, has authored 43 books published in the Wall Street Journal, National Review, American Spectator, The Freeman, newsletter editor of Revenant Review in 1974.
Year 2000 project began for him in November of 1996.
He lives on 60 acres, has two natural gas wells, three power generators, and believes Western civilization could collapse in 2000 if the power grid goes down for over 60 days, and sees no reason why it won't.
The predictions are as follows, and we'll talk about some of them.
Banks will begin to have runs on them in about the second half of 1999 worldwide.
No bank to survive to 2001.
An all-cash economy in 2000.
The Dow Jones average, January 3 of 2000, zero, because it'll be shut down.
Demise of the IRS, April 15th, 2000.
No more government checks.
No more checks.
No more credit cards.
No more pension plans.
Shutdown of Medicare, Medicaid, Social Security, family payments.
No more airline service.
The FAA is not going to meet the deadline.
We'll talk about that.
No more Las Vegas, Reno, and Orlando tourism.
Trains will cease operating in 2000.
No more automobile production.
That would be from the Domino Effect.
No elections in 2000 because there won't be any computers.
Speaking of World Wide Web Addresses, if you will go to my website, I talked to Keith Rowland, who was my webmaster during the break, and I asked him about Gary's website.
He said, of course, yes, the link is there now.
And he said, you know, you better go read it because he's got an awful lot of information to back up exactly what he's saying on his website.
So those of you who have me bookmarked, just go to my website at www.artbell.com.
Scroll down to the guest areas down at the bottom and click on Gary North's name and you'll be right there.
And there is information to back up what he's saying.
And what he's saying is pretty serious.
Here he is, once again, Gary North.
And Gary, here's somebody who takes me on and says, Art, Gary North is fear-mongering.
All financial transactions are backed up on paper.
Okay, let's give an analysis which actually was not originally mine.
It's a friend of mine by the name of Anthony Easton, who is a professor out in California.
And he began playing around with this project for his class about six weeks ago, and he ran it by me, and I said, yep, can't argue with that one.
It's the FAA, the Federal Aviation Administration.
IBM earlier this year went to the FAA and said, gentlemen, the computer that you are using, the 40 of them, to route your 20 major routes, is not only non-compliant, gentlemen, there is no one left in this company who understands it.
Now, that would mean the bankruptcy of every airline because they have bought these multiple billion-dollar devices called planes to fill them, to fly them, to take them off every 60 seconds.
Howard Rubin says of Hunter College, he says it's between 500,000 and 700,000.
Now, you don't go out and recruit 700,000 COBOL and assembler programmers overnight.
These guys are all 60 and 70 years old.
Nobody speaks these languages anymore.
There's something like 400 of them.
You can't just throw money at this problem.
You can raise the wages of those who are in the business, but you don't get 300,000 skilled COBOL and assembler programmers in the next three months, which is what you'd have to do, just because you throw money at it.
If the federal government cannot collect taxes because the banks are down, if the federal government cannot distribute money because Medicare and Medicaid are down, because the Social Security system didn't make it, because it's not compliant, if you can't distribute the money and you can't collect the money, what's the point?
If you can't collect the taxes and you can't pay the Army, you don't have a government.
The U.S. military has not even completed its inventory of systems.
As of April 28th, General Accounting Office one month ago said the U.S. military, the Department of Defense, has not completed its inventory of systems, which is the first 1% of the job.
They don't know how many computers they've got, except it's a, well, they know the number of computers.
Yeah, a million and a half computers, 28,000 systems.
They are not at this point compliant with at least 8,000 mission-critical systems.
Probably, yeah, it's because it's going to take the ones down to the 2 and the 5,000 category 2.
As of Wall Street Journal, April 28th, made a report that said, Howard Rubin's study already has said of the largest companies, the Fortune 100, two-thirds of them have yet to devise a plan.
Not begin working on it, Art.
Two-thirds of the Fortune 100 companies have not devised a plan to begin working on it.
They will come back, assuming the banks are still open, and that's a huge, huge assumption.
They will come back on a Monday morning, and they will find, in many cases, probably most cases, either the computers literally are shut down and not functioning, other will not boot up, or that the data that they're throwing out at you simply don't add up because they've moved into 1,900.
They don't think it's 2,000 anymore.
So the problem with the data then becomes how can you trust any of the information coming out of these systems?
And the answer is you can't unless you hand-check it.
But you can't hand check it because you don't have paper and ink systems to hand-check it.
These companies will not be able to interchange data with non-compliant companies.
Now, let's consider the banks.
Let's go to the big one.
13,000 banks in the United States.
Not one is compliant.
No major money center.
Bank is compliant.
Now these banks exchange trillions of dollars a day, one with another.
The wire systems that do the exchanging are not compliant.
Now, how does a bank that gets compliant keep itself compliant if it has to interact with 12,999 other banks not knowing whether any of those other banks are compliant?
unidentified
Because if you take their bad data into your system, you've messed your system up.
Well, I think it was Britain's major who said that one day it's all going to come tumbling down, that overnight trillions of dollars are exchanged by computers and satellite, and one day there is going to be a problem, and it's all going to come tumbling down.
All right, here's what a lot of people are going to say.
I'll save them the trouble and I'll say it myself.
If what you're saying is true, or even partially true, Gary, my God, the networks, for example, ought to be all over this.
If it's almost to the inevitable point, there ought to be major stories on every network about this, getting people ready, telling them the truth about what's just around the corner.
And if Dan Rather doesn't say it, it can't be true.
For example, in my case, if a satellite goes down, Gary, we communicate to the uplink Point by telephone using what are called Comrex lines or other types of phone lines, and those will be gone too, huh?
The following is from the Associated Press, Dateline Washington Associated Press.
Listen to this.
I'll just read you part of it.
Scattered bug bites are already being felt.
For one, government is throwing out old but durable computer systems that work all right except for the Y2K problem.
For another, several major Y2K tests have failed.
In one case, a system, get this, that manages the military's vast inventory wrongly marked 90,000 items for deletion.
The public faces a high risk that critical services could be severely disrupted.
This is from the GAO in a report on federal agencies, quote, financial transactions could be delayed, flights grounded, power lost, and national defense affected, end quote.
That's the Associated Press, folks, not Gary North.
I think anyone who has watched this very carefully is now getting to the stage of, if not panic, to extreme concern because so little has been done despite the warnings that have been going out for the last three or four years.
You can go to it in the personal computer section.
Go to that page.
Download any of them.
No computer is fully compliant, except a Macintosh that uses only Macintosh software designed only for the Macintosh.
Those are probably compliant.
But one of the great problems is that you've got 300 million computers out there all interacting, mostly, for example, with spreadsheets in business, and the spreadsheets have been two-digit entries.
Those spreadsheets will not be reliable after 2000.
So all the data coming out of your highly developed spreadsheet program that's being fed into your mainframe or from your mainframe into your spreadsheet, all of those must be rechecked by hand.
You can't trust any of them.
And that's your problem.
And that's a huge problem.
They can be fixed, but the cost of fixing them and to make certain that every one of those spreadsheets is accurate is simply astronomical.
I've heard that we are probably as far behind as we are and as doomed as we are in this problem, we are way ahead of a lot of the rest of the world.
And so my question would be, if we generally get compliant, which you say we can't, but let's say we did, and the rest of the world didn't, what would happen?
You've got probably 100,000 banks internationally that you're exchanging data with, and those banks go down.
80% of the code, or at least 78% estimate, Caprice-Jones estimate, that 78% of the code in the world is outside the U.S. And they're not spending any money.
What do you think Asia is spending?
You think Indonesia is rolling up its sleeves to get this problem at this point or Japan?
And yet it's an international economy, international banking system.
That's why I, you know, when I tried to get, I've done a little report on this thing that people can get for nothing.
I can only do it because it's web-based.
And so when I said, what am I going to call this thing?
I said, I'm going to call it collapse.
So it's collapse at trapped.com.
If you want my, you know, 10-page analysis of why I think it's collapsing, you just write an email to it and get it, and you get it back in 30 seconds.
But the point is, I don't see, with the interdependence of all of us on all the rest of us, all hinged to money, all hinged to telephones, and all hinged to electrical powers.
And yet the computers have threatened the banks, the computer has truly threatened the telecommunication system, and it's threatened the generation and distribution of power.
We had a very simple little case the other day when Galaxy 4 satellite began to spin out of control, and I guess it's gone for good and they're replacing it.
But when it went, in my little town, I'll tell you something.
The ATMs all stopped working.
When you went to the supermarket and tried to put your card in to pay for the groceries, that wasn't working.
When you tried to pay for something with a credit card, they couldn't use their little machines to validate that your card was okay.
All of that went down when Galaxy 4 went down.
And that's just a little nothing compared to what we're talking about in 2000.
There was that great scene, and it was a great scene, in the trigger effect where the guy was in the supermarket, and you hear this voice, and it was kind of fake because there wouldn't be any announcement system.
But you heard the voice, and the voice said, our computers are down.
So potentially there could be no phone service, potentially, or even probably there could be no power for periods of time, or at least brownouts and blackouts.
During the ice storms last January and early February in Montreal, the water treatment facility could not get power from Quebec Power because Quebec Power had shut down.
They had power generation and enough fuel to run for another six hours to keep the water treatment facility open.
So they went to the mayor and they told the mayor, we've got to tell the public that six hours from now, if we don't get Quebec Power to restore power to us, we're going to start spewing untreated water into the system.
The fire marshal said to the mayor, don't you tell them that?
Because if they do that, they'll fill their bathtubs with water.
And if there's a fire, I will not be able to guarantee being able to put that fire out.
And the poor mayor had to make a decision between the two bureaucrats.
He sided with the fire marshal.
Now, they were very fortunate because within that six-hour period, Quebec Power did restore power operation, but they came within six hours of poisoning the public.
People will begin to try to get extra water or whatever it is they think that they need.
Stuff.
There'll be a run on stuff.
They're going to charge it if they can to their credit cards.
You're going to see the supply of stuff disappear.
The reason why we have such an incredibly productive economy, why there's been this extraordinary output of goods and services for the past 25 years is because there are no more inventories.
When Sam Walton made real-time computer transactions the basis of Walmart, he cut probably 20% out of the marketing expenses, and everybody had to imitate him.
Nobody's got any inventories anymore.
And when you don't have inventories, it means that when there is a rush to get whatever it is, you can't get it.
Now let me give you an example.
The Mormons have pretty much dominated the field of stored food.
I began recommending to my clients about a year ago that they begin to buy up a year's supply of food for the families.
And I said, because I've gone to the largest of the wholesalers in the Mormon stored food business, and I asked him, I said, Steve, let me ask you straight.
If 10% of the members of the Mormon church decided that Y2K was a reason to do what the church says it ought to do, could you meet the demand?
All right, so I've also got to cover this before you do it, and that is not everybody obviously has a computer, strange as that may seem to you and I. What about an address or something?
The next thing you do, I tell people, go out and get that year's supply of food.
But when you call the company, you tell them, gentlemen, I want a deadline date.
I'm not paying for this unless I can get in writing that I can get this food by a deadline date.
So what's the date?
They've got to be told.
You've got to have that.
Now, the next thing you need, in my opinion, it's a strong feeling of mine.
I think you need to build with your church or your other community service organization some sense of what's going to happen because neighborhood is crucial and the groups around you who cooperate with you can make you or break you in a crisis.
I'm completely convinced of that.
So you need neighbors, you need friends, you need other people to share this with because this is a real tough burden.
I'd like to believe the churches were taking a strong hand in this, but they're not.
I wish they were.
The next thing I think you need is some amount of cash.
I think you need, like they said in that wonderful scene, cash only small bills, please.
You know, I'm sure you have stopped several times before you would deliver this kind of a message to a national audience, and you've said to yourself, am I really sure of what I'm saying?
All of the positioning software was designed to collapse on August 22nd of 99.
So how do you know where you are and how do you know what time it is?
The systems that depend on the global positioning satellite system of the 24 U.S. satellites, all of those systems must be completely reprogrammed in order to compensate for the loss of 1,024 weeks that will take place on August 22nd of 99.
And I don't, people claim, well, they think they've got it fixed, but the Navy has posted and has posted over a year and a half ago a warning saying, we are not responsible if you get lost because they've said we will lose the thousand 24 weeks.
Now that happens even before 2,000.
So again, you've got your problem of redesigning all of this software so fast and then deploying it and testing it that we have simply run out of time.
When all of this, when do you think our government, our government, forget all the rest of them, but our government will be forced to begin making public statements about what's coming?
When the bank runs begin, they're going to have to take action.
They will have to begin to confront the reality that the computer systems that the government has will not be compliant.
So what you're going to get is a tax revolt that will begin next year.
As soon as the general public figures out that the IRS is not going to be able to find them, or as the head of the IRS said a month ago, if we don't get it fixed, the public won't get its refunds.
Second question is, if the power isn't down, now you get back to that wonderful scene in the trigger effect at the gas station.
If you can't get your credit card cleared, then it has to be cash.
And that will be a real debate and problematical situation.
Let's give an obvious example, Art.
If you were hiring a guy to take your quarter of a million dollar tank truck out, and you knew that guy was going to pick up the cash at those gas stations, which you and I had paid the gas station attendant to pump the gas, how would you know your money or your truck would ever come back?
Our whole security system is based on electronic payment.
If electronic payments go down, then you've got your problem of how do you actually collect from your trucker whatever he was paid in cash and get your truck back.
My opinion is there will be a drastic decrease of the amount of gasoline and the amount of trucking on the road.
Assuming there's going to be complete societal chaos, military collapse, complete infrastructure collapse, I mean, I'm just scared to death, and I'm thinking it might just be best to get the hell out of here.
My question is, I've read, and I'm sorry I can't cite the exact source today.
I don't remember, but under the rules or auspices of FEMA, I've read that the government will have the authority to confiscate food supply no matter where the source is from.
Well, first of all, I want to say you definitely have my attention.
It's the first time I've been frightened over anything in my life.
Okay.
I own my own home, and I've been one of these people that was very diligent to make sure I've paid all my bills, and I don't owe anyone anything.
And I would like to ask what Mr. North's advice would be for a person who I'm 50, and I own my own home, I don't owe anyone anything, and I have a very limited cash flow.
I know this is a very sensitive question, but as you recall, in that movie that we've talked about tonight, The Trigger Effect, which, by the way, I've been recommending to people before we even talk, things quickly got out of hand.
Now, if you have a lot and somebody else has a little, they're going to want to take what you've got away.
And it brings up a sensitive question of protecting what you've got.
And that theme, it was subtle but powerful in the movie.
It was the story of the breakdown of community trust.
And that's why I want to stress, and I really believe this, if you're in a situation where you have to have a gun to protect yourself, do whatever you can to get in a situation that's better, where you can trust your neighbors.
But remember, Art, yes, it can be done, but the brilliance of the free market modern economy is that you do it by money because barter is not very efficient.
unidentified
I mean, if you don't have what I've got, I'm out of luck.
Because people defer until next quarter and the next quarterly budget report making any decision involving the expenditure of large quantities of money.
And you can see that if the hundred largest companies of America, if two-thirds of them, have not yet even developed a plan to deal with Y2K, which is what Rubin says and I believe him, then we've got a situation where deferral and denial are dominant in the thinking of the decision makers because nobody wants to be blamed for spending $200, $300, $500 million.
That's what has been budgeted by Citicorp, $600 million.
$300 million, Bank of America, actually $350.
$300 million with Case Manhattan Bank.
Now they haven't spent it.
They've spent maybe a quarter of it, but that's the kind of numbers we're talking about, and nobody wants to do it.
unidentified
Yeah, but you're not going to have any money.
Yes, that's nothing when you have no money flowing in.
What they have to hope for, and I think you're going to see it beginning early next year, is that they can cash out their position and go into quiet retirement with their whatever they get for their retirement obligations, and they're going to sell on their stock options and off they're going to go.
That's one of the things you want to look for for those of you who are stock watchers is insider trading early next year.
The legal liability that these people will face is so gigantic that the general estimate is in the United States of $1 trillion of litigation in the year 2000 and beyond if the system holds.
It will be the ultimate feast day of the lawyers if the system holds.
Look, if, for example, I went off the air, Rush Limbaugh went off the air, the company that airs us, that sponsors us, is going to sue the providers who were not ready, and that's the reason we went off the air.
And one good thing I have going for me is that I don't have a lot of money somewhere.
Unfortunately, I also rely on SSI.
I'm a young mother with four children.
Very poor.
And I've been listening to you for about a year now.
And the thing about your radio station that fascinated me was mostly the comment things and all the different things about the stuff that I try to talk to my family about because it's exciting.
Well, I hate to say this, but I bet that it's true.
We'll ask Gary.
Usually when this kind of thing happens, the people with means make out the best.
And the poor people, particularly those dependent on our government for checks, I'm sorry, but are going to be the ones that are going to get hurt the most.
So I would go to the library if you really want to study this thing, and you can go to my site, www.garynorth.com, and what I've done, and I did this deliberately, on my site, you can click through to the original document that I'm quoting from, and you can read it for yourself or print it out.
I wanted verification that people say, yeah, he's not faking it.
There really is documentation on this.
So I would go to the public library and spend a couple of hours, if you can, in a week or maybe, you know, go on a Saturday and just look at it for yourself.
Belief has to do with people's conditions and what they think they can do in response and what they've been raised to believe.
Belief is not just looking at documents.
But I will say this, I have really devoted a lot of time, probably close to 1,500 hours that I could have been using on my own personal preparation to create this site to say at least if I'm going to make these wild conclusions, I at least have provided the best evidence that I can to justify the conclusions, and then people get to make up their own minds.
Yeah, by the way, Art, let me say with respect to that, if I get cut off, it's because we're starting to get one of these Arkansas lightning storms, so it's not because I'm angry, it's because we got hit, just a warning.
Now, the question of the telecommunications is really crucial for both of our businesses for obvious reasons.
I would like to believe that the companies have it ready to go, that there's not going to be a problem.
They are really silent on it.
There is almost nothing published.
What little that is published is the standard form letter stuff that says, well, we'll be ready to test this in late 98, and we'll probably get it done sometime next year.
And I wish them the best.
But the complexity of 500 million lines of code is very great complexity, which is what AT ⁇ T is facing.
The Telecom Managers Association, the president of it, of Great Britain, has said that he thinks there's a very real possibility that nobody will be able to phone out of Britain in the year 2000.
That, of course, would shut down the banking system because the computers couldn't communicate with each other.
So again, on this one, I don't want to overstate it.
I'll simply say this.
There is no evidence that any telecommunications company is at present compliant, and there's no evidence that I have ever seen published on the web that says the interconnections between the various companies, that that problem has been solved.
I am assuming, however, that the banks are totally vulnerable, even if the telcos aren't, so they can call my 800 number, but I don't think they're going to be able to buy because I think you're going to have a banking crisis.
And now we get back to that original question you raised, Art, which was, well, if I think it's going to happen, do I go out and run up the charge card?
The answer is, of course people are going to do that because they'll figure out there'll be almost no way to get repossessions.
The court system will be so jammed up, if it exists at all, it will be so jammed up with who owes me what in the billion-dollar range that the little nickel and dime stuff of $1,000 here and $1,000 there is not going to be relevant.
Those issues will never get settled.
The difficulty is the companies that relied upon those payments will be out of business.
That's why I think you're going to have a horrendous bankruptcy rate for what you have Just described.
They'll stay because they have no choice but to stay where they are.
So, my opinion is you are going to see a collapse.
I mean, absolutely no questions asked, collapse of those large mortgage lending organizations, federally insured lending organizations, because they will be stiffed by literally tens of millions of mortgage holders who will simply stop paying.
And there's no way to come repossess the house.
You couldn't get it through the courts.
And even if you did, who are you going to sell it to?
I'm one of the programming dinosaurs Gary's talking about.
Speaks COBOL, Assembler, Fortran, and all those dead languages.
And believe me, he's understating the degree of the problem and what has happened over the last, in my case, 26 years.
Some of us had the good sense to see what was coming, but in every case, we would get overruled, gone behind our backs, have the code ripped out, have the space ripped out, and it's just, I don't even know what the word I'm looking for is, malicious negligence.
Shouldn't they have seen what would, I mean, even if you take it from after the punch card days and when we finally got into real computers, at that point, shouldn't the alarm bells have been going off?
I mean, and, I mean, I at one point was ripped a new one from both sides for wanting to include a mechanism to take care of this problem in some systems because, you know, the argument that I was given was, who cares?
We won't be working here by then.
And Art, this was in a criminal justice system.
Great.
Imagine what it'll be like when it rolls over and suddenly hundreds of millions of criminal records disappear.
Art, I do prison evangelism, or at least did until I moved to Arkansas, with a maximum security prison in Texas.
And I was friends with one of the guys who's sort of your jailhouse lawyer type.
And I warned him over a year ago, I said, don't make a lot of noise, but be certain that the guys you work with have got paper records of when they are to be released and that those records must be in their possession.
Because I said they're going to lose your records.
And you've got to be able to prove that if you're legitimately allowed to get out, that you will get out.
I warned them.
Yes, what he's telling is guaranteed.
unidentified
And the worst part about it, of even wanting to do anything about it now, is I'd say in the last 12 to 15 years, the mindset of management and the programming of the data processing industry changed so much that programming ceased to be an art.
It became a job that any bozo off the street could be taught with all the new programming techniques where you didn't have to know diddly about anything.
And now you've got offices full of 20 and 30 year olds that wouldn't know a PAC's date if it jumped up and did them.
And these older programming languages, Gary, in order to fix this in a lot of cases, as you point out, they're not going to be able to do it in the older programming languages.
For a period they will be popular and the best of them are getting huge amounts of money, the really most skilled ones.
But remember, Art, these guys are not dummies.
They can look and they can say pretty confidently that one of two things will happen.
Either the company I work for is going to go belly up sometime in the second half of 99 or early 2000, or I'm going to fix it and then they're going to fire me again.
They're not real interested in going back to New York City if they're sitting on the beach in Boker Ratone.
I work on Y2K projects, and he is right about the fact that there's an awful lot of source code out there that's obsolete.
But the one thing about it I do know, because I work on IBM mainframe, that IBM has done an awful lot with the new upgrades to their operating system over the last 10 years to force these companies into Y2K compliance.
In fact, this is what we're doing right now for the company that I'm under contract to is we're in the process of converting all their software into full compliance with Y2K, and we'll be ready to go by the end of this year as far as the thing being productional.
Well, that's really good, but even if you are compliant, if all the people you deal with, your suppliers, the people who buy from you, if they have no electricity and no phones and no internet.
unidentified
Well, I'll make you a bet that they'll have the internet, they'll have the supplies, everything else.
Because one of the things you're running into, you know, he talks about putting the century on the date.
In most cases, if you go out and start looking at the new date routines, they don't carry century.
They're basing it off of a base date that's, say, well, an example with the IBM, of the new IBM software, they use a date that they call Lillian date, which is the number of days that have elapsed, say, for the current date from the year of, well, it's December 31st, 1600.
Our problem, Art, is that he can't repair all the systems.
IBM, sir, is not compliant, is it?
Neither is EDS.
The companies themselves are not compliant.
They're hiring outsiders to get compliant.
IBM is not compliant as a company.
If this is so easy to fix, how come the guys selling the services like EDS and IBM have not got their own companies compliant?
This is the blind leading the blind.
Those companies aren't compliant.
What do you think is going to happen to IBM if you're right?
Do you, I mean, the magnitude of the lawsuits, will there be a trace of IBM in 2001 when the lawyers get through with that company?
Not a chance.
They'll be blamed for it all.
Every company dependent upon an IBM product or someone like you working for IBM, those companies, those individuals will have a big neon sign that says, lawyers, come and get me.
Okay, the Arkansas, well, the Texas is probably pretty much in the same shape because they've been forced into compliance.
They were forced into compliance about four years ago as far as Y2K was concerned by the federal government.
Once again, because I'm a contractor, I was in Arkansas when they were in the process of rewriting those systems.
And the same way with the new child support enforcement systems, if I were somebody who was making child support payments, don't plan on getting by with not making those payments as of year 2000 because, once again, those systems are in compliance.
I define as compliant any bank that will let its lawyers write to the customer to say, this bank is 2,000 compliant and we have let go all of our 2,000 Y2K repair staff because we don't need them.
Citicorp can't do it.
Chase Manhattan can't do it.
Bank of America can't do it.
No Japanese bank can do it.
Come on, let's get real.
unidentified
Okay, we're not formally.
We're right now not in compliance because we are in the process of getting it done.
Lots of luck, Jack.
I'll tell you what, I'll make you a bet.
Since you're in Arkansas and I'm in Arkansas, your 2000, when it comes to pass, I'll meet you at the steak and ale.
The chips that are built into the microprocessors and into all kinds of telecommunications equipment and electrical equipment, the chips themselves have been programmed with the Millennium Bug in them.
The latest I have seen was David Hall.
By the way, it's not the David Hall of the coin selling, but David Hall, the programmer.
He hit me with a new one just in the last week.
He estimates 40 billion chips have been produced, and he's estimating now above one, possibly as high as 5%, are defective.
Now that means not only must you find those chips, you've got to find a way of locating them in the system.
Then testing them, then you've got to replace them by hand.
Now the difficulty is if they're over three years old, they're probably out of production and they won't fit in the motherboards.
If I were to call JCOR and have somebody high in management, which I could do, call our suppliers, mainly General Electric, Hughes, the satellite people, MCI, the people we depend on for our communication links to get this program on the air, and demand to know if these companies are Y2K compliant, so I'll know whether I'll be on the air or not.
I'll tell you what the answer you're going to get.
You'll get a form letter.
And by the way, you should do this.
Absolutely, you should do this.
You're going to get a form letter back.
If you get anything back, it will say, we are very diligent.
We've known about this problem for, and it boils down to months.
They'll say maybe 1995, the real conservative ones, we've already heard from one caller that it's been in there for 20 years or more.
They'll tell you we are really diligently working on this, and we've hired this team to work on it, and we expect to have the coding done on December 31st, 1998, leaving one full year for testing.
Now, the answer to that is, by the way, fellas, where are you going to get the excess computer capacity to run the parallel testing?
Because to do a thorough test, you've got to run the data in your existing computer and the fixed one, and you've got to make certain that the fixed, repaired one doesn't shut down at some point, which means you've got to double your computer capacity in order to run the tests.
You've got to double the size of the number of programmers on your staff to run the parallel.
Now, again, let me go back to when our government will begin dealing with it in the sense of beginning to make announcements, beginning to mandate, that's what the government does, and beginning to address the people with regard to what's going to occur.
How do you imagine the government is going to approach this to the masses?
I don't think the government is going to be able to approach it to the masses until such time as the freeze on the bank accounts takes place.
They cannot possibly go public with this while the public still has access to the bank accounts.
So, what I think is being done and is being done rapidly over the last 45 days, especially Friday, last Friday, President Clinton signed a document which has not been released, but he referred to it Friday in his speech to the Naval Academy at Annapolis.
An emergency cyber terrorism series of orders.
We have not yet seen it.
I've been searching the web.
There are trickles of information out, but he did talk about it.
I've got his speech posted on my site.
It was to the Naval Academy.
He has signed a series of documents beginning February 4th of this year, which are leading to emergency reactions against the unnamed and unidentified cyber terrorist organizations.
Now, see, here's the advantage that that has.
Nobody is going to be in favor of letting cyber terrorists get away with anything.
So what did they do?
Last week, they had those masked guys in the suits who would not give their last names testify before Senator Thompson's committee.
All of them saying, we shut down the Internet or we disrupted the Internet.
But the point is, we are getting an orchestrated series of warnings against an amorphous, vague group or multiple groups that can do this.
But remember the advantage from a political standpoint.
This is not datable, and you can't identify which group is going to do it.
So the public does not have the fear that says on a particular date, all over the world, the same effect is going to take place.
Now, the government has admitted in that fact list on the PCCIP side, they've admitted that the effect of Y2K is the same as cyberterrorism.
So the point is, when this happens, they can blame it either on cyberterrorists or getting ready for cyberterrorists, and the same rapid deployment forces can be used.
The same strategy of defense is going to be employed.
But they can now talk about it without scaring everybody to death to say there is a specific date on which it's going to happen.
One big problem the government has and a lot of other companies do are the original programmers, once they write a module, especially if it's not really documented well, the minute that guy leaves or is fired or whatever, that becomes a black box.
They know what they put in and they know what they get out, but they have no idea what's in it.
So you've got to sit there and go through the whole thing to be able to do anything to it.
Now, as of today, as of May 26th, are you thinking now that it's going to be mild or where between mild and worst case do you think now, as of today, it's going to fall?
Again, I tell people, if you want to know how it is, just go turn off the mains to your house and spend about an hour sitting there.
It'll all be apparent to you.
West of the Rockies, you're on the air with Gary North.
Hi.
unidentified
Hi, this is Patrick, currently of Tucson.
Thankfully, soon to be Patrick once again of San Diego.
Thank you, God.
I have a couple of quick comments and then two quick questions.
It seems to me that we could be headed for a Wild West scenario where, forget the militias and their survivalists, the people in the catbird seat are going to be military, National Guard, and law enforcement personnel.
It would be interesting to see what kind of morals these people have.
I'm thinking of the Marjo Gortner character in earthquake.
It also seems that family members who are separated geographically now in different states are going to be completely isolated because of no travel, no communications.
I think up until late 99, that's a safe place to put some of your money.
Afterwards, you have the whole question, will you be allowed in, or in fact, will vaults work?
But in any case, you're going to have a great amount of fear, and they may even, conceivably, they may even lock the boxes.
That is the threat.
Remember, in 29, the largest banks did survive, at least in the United States.
It was the smaller country banks that went down.
This time, it is the whole system that is at risk.
And so anybody who is not in a position of saying, look, the old rule, and I call it Max's law, a friend of mine's father, Max Blummert, had it, and it's a good law.
Write it down, buy the best, pay cash, take delivery.
That is a really good law.
And I think it's a rule that we all should use as much as possible.
Now the second question on military attack or military disruption.
My personal opinion is the great winner of all of this is likely to be Red China.
Now I don't think they're going to launch an attack on us, but I think they will become the dominant force in the Asian area because they have a gigantic army and a gigantic navy, and most of their technology is pre-computer because they didn't have the money to computerize the systems.
Now, with respect to us, I really do not think that any nation in this hemisphere is going to be in a position to launch a tax or any of the rest of it simply because the fundamental fact of every government is this.
There is only one law of government, and that is you've got to pay your army.
All other laws are secondary.
When you cannot pay your army, you cease to have a government.
So my assumption is that domestic control, domestic violence, domestic terrorism, the gang culture, that is what the military forces in this country are going to have to be dealing with.
And the gangs are very well organized, exceedingly well organized In the larger cities.
And so, in a way, a gang is a government looking for territory.
And when the conventional government organizations begin to break down because their telecommunication system is not compliant and 911 is not compliant, and all the other factors that are involved in paying Gary Holt, of course.
I'm beginning to think this is so serious that I should get a monthly update of some kind and get it on the air at the very least.
Could I come to you, even if it's pre-recorded and we do it during the daytime when you generally live, could we do sort of a monthly update or something?
And then the second part of the question is, there's going to be a lot of other media after I run something like this that I think ought to be addressing this, and they're going to probably want to get hold of you.
So not for the average person, but for media, New York Times, LA Times, Chicago Sun, whatever, if they want to get hold of you, is there any way for them to do it?
Gathering everything that you just said about Red China and on the total chaos that we are definitely facing in the near future, I feel like I just read the book of Revelation just listening to him talk.
And on with my question, I know you have other callers.
Concerning Bill Gates, if he is the richest man in the world and owns Microsoft, with his company and the computer technology that they do have, why in the world is he not footing at least some of the bill for this?
Because definitely he would come out and only gain from this opportunity.
You know, it's really interesting because I remember a 60-minute piece a year or two ago about how our government has nothing but these old dinosaur mainframe computers in just about every agency, including the IRS.
And they were talking about how far behind government agencies in general are computer-wise.
I own a piece of property in Michigan where I plan to retire in a small town of about 150.
And I have, it has its own well and septic system and everything.
They don't have the public one.
I don't know about wells, but my first question is, don't they need electricity to start them?
And are we going to have that?
Or will we need compressors or build our own the kind of electricity that people had when they I'm not sure exactly what it is, but I know some people that used to have their own produce their own electricity, if I'm making any sense.
I know a lot of people are going to think I'm crazy for saying this, but I also know a lot of people out there are going to agree with me.
I do not own a computer, Art.
I will never own a computer.
I despise the damn things.
And I've got to tell you, in all honesty, I am almost glad that this crisis is happening because the number one function of computers has been to throw people out of work.
And I can tell you as an absolute fact that for many, many years, these computer salesmen went to all of these different corporations and companies trying to sell them their computer system.
And the number one selling point has always been, look at all the people you'll be able to get rid of.
For your guest, with concern of the YTK problem, every time I've heard that, I've just said to myself, bull, I just can't believe that it's such a big problem.
And the reason I say that is I don't see why they couldn't just go out and buy new systems, new Pentium II servers, and like with the electrical companies, simply run the grid on the new systems and then take the old ones offline.
They haven't written the software because the software is written in arcane languages, and all of the information embedded in the software will be lost unless they can port it, and they can't port it over to new systems.
There's not time.
It's the information that's the key.
It's the loss of information.
unidentified
Well, that may be true with some of the military codes or whatever, but like with the power system, I don't see why they couldn't just run it with a new system.
The simplest answer is there are 7,800 companies in the United States who make money doing it.
Not one has done it.
Not one.
The answer is they can't do it.
But even if you don't like that answer, they sure haven't done it, and they've known the problem exists.
Companies are paying right now to the Electric Power Research Institute $75,000 per year just to exchange information on how to fix it.
If it were easy to fix, they wouldn't pay it.
unidentified
Well, one thing I was thinking is, you know, you were saying earlier that you couldn't get access to the old data.
I was thinking, worst case, you could print it out on paper and then scan it into the new systems, and they have software that will take text off of a scanned page and put it into computer format.
You must be on a backbone part of the internet somewhere.
We'll hope so.
Okay.
You can find, by the way, everybody, if you have a computer, you can find Gary North's website either by going to my website and simply scrolling down to Gary North's name and clicking on it or going to his website directly, which will save my site a little bit.
And I've gotten many letters and many emails about this particular issue.
And one thing that really crosses my mind is if the average home user can have a normal solution to this particular problem, why can't the government come up with something as easily, you know, if you're really a Y2K expert, then you ought to know the answer to that.
It's simple.
It's simple, Art.
You've got either a BIOS upgrade or a motherboard upgrade.
It's very, very simple.
Even though they use POSEX, which is an operating system that's derivative of Unix, you can still go with hardware upgrades, and it's not that hard.