November, 1997
Dear ICE Subscriber:
Sometime in late 1999 or early 2000, I will begin to receive letters. I know what they will say. They will be written by ICE subscribers and Remnant Review subscribers and visitors to my y2k Web site. They will be in one of two kinds. They will begin, "Dear Dr. North." Most of them will say approximately as follows:
For over three years, I read your monthly warnings about the Year 2000 Problem. I visited your Web site and read your analysis and the documentation. I thought you were interesting, but I never really did anything to protect myself. I never took your warnings that seriously.
Here is my situation. I have lost my job. My employer went bankrupt. The government has frozen my bank accounts. The stock market, as you know, is closed. So is the bond market. I can't borrow any money; interest rates are astronomical. I have put my home up for sake, but half of the houses in my city are up for sale. There is no mortgage market, as you know. Nobody will lend money long-term. Gold is over $1,000 an ounce. My local public utilities are still not 2000-compliant, although they promised me in writing in 1998 that they would be. I can't get through on the phone. It's always busy. Most numbers are busy. Half the time, I can't even get a dial tone. We can't get deliveries of bulk food from Walton Feed or any of the Mormon survivalist food stores. They aren't taking new orders.
I know that I should have believed you, but I didn't. But I'm ready to believe you now. Please tell me what I should do. I'm desperate.
This assumes that the mails will be up. The U.S.P.S. is not year 2000 compliant today. If I receive this letter, possibly by e-mail, I will not answer it. There will be nothing comforting that I will honestly be able to say. What this person will need is help from his church. I wish that all local churches had the kind of food reserve program that local Mormon stakes have. Every congregation should have stored food for emergencies: 40% wheat, 40% corn, and 20% soybeans. A church needs a home-style grain mill, too.
Then there is the other letter. It may go something like this:
I took your warnings seriously. We got top price for our home in the city. My wife and I moved to a small town. We live on a 5-acre farm. We generate our own power with 2,500 gallons of diesel (number 2 heating oil). We're completely debt-free. We sold all of our stocks, bonds, and mutual funds. We missed the top of the market, but not by much. I closed out my pension fund, paid the penalty and taxes, and put it into quarter-ounce American gold coins (no reporting requirements) and pre-1964 U.S. dimes.
I liked my job. I do miss it. The money was good. My employer is still in business, and he might have kept me on the payroll, but I can't be sure. The recession has forced him to fire a lot of people. He got rid of a lot of the old timers. He can hire kids fresh out of college a lot cheaper: no pension, no union, no fringe benefits.
My bank is still open. So far, your prediction that the banks will close hasn't come true. But I have had to go in three times to straighten out my account. The computer is acting up, they always tell me.
The economy is in a mess, but it looks as though it will pull through. I do minimum wage work here, plus odd jobs, plus trading on the side. So does my wife. We suffered a big drop in our income. But we've tightened up our budget. We're getting by. It's not easy, but our life style is a lot better than it was in the city. The grandkids visit us. They like to play with the goats. Did I tell you? We raise goats.
On the whole, things aren't as bad as you said they could get, but they are a lot worse than our old friends said things would be. Some of them are in bad financial shape.
What do you think we should do now? Stay put? Move back to the city? I can get back in pretty cheaply. A lot of people want to buy our place out here. It's safe. You can live off of what it produces. Of course, nobody has any extra money to throw around. But I can use this property to buy a big, fancy home in the city if I'll take over the other person's mortgage. I may even be able to get a big house debt-free. People still want out of the city. I might get three or four smaller houses in the city, if I can find a really motivated seller. Is it time to move back? It's not as bad in a lot of urban neighborhoods as you thought it would be.
I'll reply, approximately, as follows:
When I began publishing warnings on y2k in late 1996, I knew that I was taking a big risk. It was basically a no-win deal. Here's why. First and foremost, I knew that very few people would believe me. They would refuse to believe anything that calls into question their present lifestyle and income. I would be like Churchill in 1936: a voice crying in the wilderness. I would be subject to ridicule, tongue-clicking, and the usual flack from the Establishment's ever-present cheerleaders. So, why bother? What could I get if I turned out to be correct? I was right, too. My critics were numerous.
If my worst-case scenario turned out to be correct, nobody could send Remnant Review or ICE any money. So, I knew that I would not be able to capitalize on my advance warning. There would be no Remnant Review promotional letters announcing: "From the only person on earth who told you that a collapse was coming, a special report on 10 ways you can get rich in the next 12 months!!!!" There would be no one left with money to spend on newsletters if my worst-case scenario came true. There would be no civilization: no electricity, no central government, no post office. I thought this scenario was possible, but I prayed that God would be merciful, and (1) AT&T would get its 500 million lines of code fixed; (2) the world's phone system would not collapse; (3) the power lines would still deliver electricity; (4) the Internet would stay up. Why, I was not sure. It was just hope.
If my Great Depression scenario came true — a world without banks — I knew it will be almost as bad for my newsletter income: a decade or more of penny-pinching, using up everything, mending, buying things used, and scrounging for money. This is the scenario that I thought was most likely to happen. In any case, this scenario we could prepare for a little.
Well, what has happened is more like a traditional recession: bad, but not a disaster; painful, but not the end of the banking system. Still, those of us who headed for the country are better off today than those who sat tight in the city, hoping against hope that what had been programmed into the world's computers and microchips would somehow not take place. Most people never bothered to think through the implications of what the experts said would be a painful, expensive problem to solve. With a handful of crank predictions — the best-case scenario prophets — the programmers said that y2k would create a very big mess. It did just that. It's not the huge mess that I thought it could be and predicted it would be, but it surely is a mess.
If you're comfortable, stay put. If you're over 55, stay put. If you can make money on the Internet, stay put. But if you want to build an inheritance for your children, and your skills are still urban, move back. Become an entrepreneur. I would recommend buying depressed real estate. Highly motivated sellers are always a source of great opportunity for anyone with repair skills, renter-management skills, patience, and a willingness to wait for an even better deal. Get in for no money down.
An All-or-Nothing Bet
We now face an all-or-nothing bet. Computer programmers of the 1960's quietly forced the world into a terrible situation. We are now dependent on systems, some of which will surely fail: microsystems (machines) and macrosystems (organizations). We must now guess how devastating the effects of the programmers' social blindness will be. If we guess wrong, we lose. How much we lose depends on which way we bet and how bad things get. If they get as bad as I fear, and you bet wrong, you could die. Warning: I am the only person saying this in public. Judge accordingly. But the technical problem is there.
Here's what I want you to do. Write down these questions, and then write down your answers. Writing things down is a good exercise. It forces you to think about them.
What evidence is there that nothing bad will happen in 2000?
What evidence is there that something serious will happen?
How serious is serious? (How much income loss can I stand?)
What sources of income can I count on if most computers fail?
What happens to me if North's Depression scenario is correct?
What happens to me if it's just a major recession?
Where will I want to be in 2000 if things get really bad?
Where will I want to be in 2000 if things get moderately bad?
What will I lose if I move, and things get not too bad?
Do I have until 1999 to move to a safer place?
Is my local church actively promoting y2k preparation?
(The preceding is a rhetorical question. Answer: "No.")
If I prepare and others don't, will they come to me for help?
How much can I afford to buy now to help them then?
If I have limited resources now, will I want urban neighbors then?
How much time will I need to sell my house and move?
How much time will I need to learn a whole set of new skills?
How long until my neighbors figure out what y2k can do to them?
How long will cheap mortgage money be available?
Do I ever want to sell my house by taking back a mortgage?
Do I think the welfare State will outlive me?
If the welfare State collapses, how safe will my city be?
If the welfare State collapses, will it take me with it?
How dependent am I on the welfare State?
If the welfare State collapses, how safe will my city be?
I recommend that you tell your pastor about ICE's Web site, http://www.remnant.org and that you both start participating in one or more of the discussion forums. Access them under "discussion forums" at the bottom of the Main Categories Page.
Sincerely,