I haven’t studied economic history enough to know (or at least to remember) what the causes of the Great Depression were. It might be a good idea for me to Wiki it because I believe with all my heart that we are currently living in a time of impending worldwide economic collapse. I don’t harbor any illusions that my coming to an understanding of the roots and causes of the Great Depression will prevent the onset of the next one, but I know that when we don’t learn from it, history has a way of repeating itself. So it might help me to more clearly see the signs of times if I were to revisit the Great Depression. I’ll put that on my list of Things To Do.
My parents were young adults during the Great Depression. It made a big impact on their lives long after the depression was over. Just as my parents were molded by the Great Depression, a lot of my prepper ideas have their roots from the Y2K scare. (Y2K is the abbreviation for “Year 2000.”) That’s when I first became aware of the need to be prepared for world-changing calamities.
For those of you too young to remember, or if you just weren’t paying attention at the time, Y2K was a scare that was born out of the growing pains of worldwide computerization. Computers run on data. One of the most common pieces of data used in computer databases is a date — month, day, and year — stored as numeric values for purposes of calculating… well, lots of things. Most early computer software was written to allow only two digit abbreviations to define each portion of a date, including the year (for example, June 28, 1907 would be 06/28/07). So instead of storing a year as “1907” it would just be “07”. It was assumed that you were talking about the 20th century.
As we approached the dawning of the 21th century, some forward-thinking programmer was dealing with future events that crossed over into the 21 century and ran into the problem of dating. Anything that was going to happen in the year 2000 or beyond was understood by the software as being in the 1900s.
Every calculation that was based on a date either gave the wrong answer (best case) or crashed the system altogether (worst case). Virtually every significant computer system in the world would be affected by this error — banking systems, public utilities, military applications, manufacturing, government, healthcare, everything! If steps weren’t taken to replace old hardware and software to accommodate date codes that used four digits to define a year rather than two digit year abbreviations, and do date math correctly, there was a real risk of computers malfunctioning on a global scale and the world suddenly reverting to the level of technology of the late 1800s overnight.
Governments and businesses spent train loads of money to update their software and hardware to avert the problem. The result was that Y2K was rung in with traditional fireworks and celebrations, instead of the world going dark as power grids failed.
There were many skeptics in the run-up to Y2K. But let me repeat the first sentence of the previous paragraph: Governments and businesses spent train loads of money to update their software and hardware to avert the problem. People who understood the problem and its implications weren’t skeptics — they were preppers!
I was working at the global headquarters of a Fortune 500 company at the time leading up to Y2K. It was reported around the water cooler that the CEO of the company installed a 15,000-watt generator to keep the power running at his large home in the event of a Y2K blackout.
So there were many skeptics and nay-sayers during Y2K, but the fact remains that businesses, industries, and governments fixed their computer systems (at great expense) so that they wouldn’t become part of the problem. The experts were believers, and they convinced their bosses who held onto the purse strings to become believers, too. They took the necessary actions to avert the disaster.
I see three impacts from the Y2K scare.
First, the emergency expenditures made to update computer systems worked, making all the personal preparations that Y2K preppers did unnecessary. Many uninformed or unaware people thought that Y2K preppers were a bunch of nuts. The success of the business and governmental preps solidified this opinion among skeptics. “There’s no need to prepare for disaster! Even if the threat was real (and many believed it was not), the government will take care of everything. You don’t need to get your panties in a bunch.”
Second, I believe that the massive amount of expenditures made all at the same time to update computer hardware and software has created (or enhanced) a new economic cycle of boom and bust. Let me point out here that I’m not an economist. I don’t pretend to be one. I’ve never read an article that discussed what I’m about to say. I’m just a guy who has lived through some events and put some pieces together.
Here’s what happened in the run-up to Y2K. IT departments were staffed to the rafters, and computer hardware and software companies had an unprecedented boom because of expenditures made to avert the Y2K problem. Everything had to be in place by January 1, 2000. When it was over, it was over. Business and government now all had new computers and software, forcing a very artificial arrhythmia in the normal upgrade cycle for hardware and software. No one was going to be in the market to buy new stuff for another three or four years.
Three months after the world stopped spending money to upgrade computer systems, in March 2000, the “dot-com” bubble burst. Over the next two and a half years, the stock market lost five trillion dollars ($5,000,000,000,000.00) in value. Telecommunications company World.com was one of the most notable to fail, filing the third largest bankruptcy in U.S. history. Coincidence, or cause and effect? The dot-com bubble was followed by the housing bubble in 2007, which is the cause of the Great Recession that started in 2008 which bankrupted our federal government and has never ended. I predict more bubbles to burst in the days to come. The next one may be the personal debt bubble, perhaps led by the school loan bubble. People can’t find jobs, so they take out huge loans and go back to school. When the jobs still aren’t there, they’ll default on the school loans, bursting that bubble. China’s booming economy may be all smoke and mirrors, too. We’ll be posting a shocking video of a story that ran on the TV show 60 Minutes that will make your financial toes curl. (No, not in a good way.) But to sum this second point up, I believe that the expenditures made to prevent the Y2K disaster from happening set up (or at least exacerbated) a series of boom and bust bubbles that will eventually bring down the global economy.
The third result of Y2K is the Cassandra Effect. Cassandra was a figure from Greek mythology. She was human, but Apollo, the god of the sun, fell in love with her and gave her the gift of prophecy. But when Cassandra rejected Apollo’s romantic advances, he put a curse on her so that her prophecies would never be believed by anyone. There were so many skeptics speaking out against the efforts and warnings of Y2K preppers that a book and organization called The Cassandra Project were launched. I don’t know if they still exist, but we need them. The general public has their head more deeply in the sand now than during Y2K. Our culture is dominated by ease, comfort, convenience, instant gratification, entertainment, and a hostile sense of entitlement. Take away any or all of the first things in that list and see how long it takes for the hostility to raise its ugly head. Preppers are regarded as kooks and extremists. Most people still think that our bankrupt government will come to the rescue of the entire country if hard times come. There’s no need to change our personal habits. “Just as in the days of Noah…”
So Y2K didn’t pan out to be the global disaster that it was warned could happen. I believe that’s because it was caught and fixed in time, but with repairs that have caused these three long-lasting repercussions. I saw the potential for hardship that Y2K posed, so I was among those who sounded the alarm within my circle of influence, and I took some baby steps toward personal preparation. They really wouldn’t have served me well or for very long if I had needed them. We all need to do much better now.
But 13 years later my take on Y2K hasn’t changed. I believed then, and I maintain now, that Y2K was a wake-up call, a “dress rehearsal,” for what is to come. Golfers take a practice swing before they step up to hit the ball for real. I got a practice swing during Y2K. Now it’s time to get ready for the Real Deal.