Posted on 12/23/2010 3:45:02 PM PST by SeekAndFind
>>Municipal Bond Market Crash 2011: Will Dozens Of State And Local Governments Default On Their Debts?<<
Hence my comments, when people say the economy is on a slow improvement cycle, I say that we are in the eye of the storm.
This is an excellent time to get that plywood up over your windows and get that car protected. The storm’s a’comin’ back with a vengence.
But it is a perception thing, really. It never left. The economy is like a truck driver that has been awake for days solely because of speed, and he just took the last pill.
Secession before Treasury subsidization of failed states and municipalities.
Any subsidization program will become permanent, and the highly taxed coastal states will reverse the redistribution to Red states and cause all the socioeconomic and political/financial fissures covered with Fed largesse will rupture.
Earmarks were averting disunion. Earmarks will return with a vengeance as the ponzi reaches the peaks of the death throes.
http://www.stansberryresearch.com/pro/1011PSIENDVD/PPSILCAE/PR
For the record, I hope this video is wrong and the entire doom and gloom crowd is wrong. It all make my stomach turn.
They should default. I don’t like typing that but it is the truth. Number’s games and printing money bailouts amplify the problems.
As of last Friday, Chase was still advising me to invest in bonds. Admittedly, they were advising "Get out of an 80% bond/20% stock fund into a 20/80 fund." In my view, that is the worst possible advice because it will depress bonds by selling but you stay invested (20%) in bonds as their value sinks. All the time that Chase and their ilk say "invest in bonds", state and local governments will stay 'afloat.'
Many gloom & doom writers seem to overlook the obvious, which is what we are experiencing is an organized take down.
I mean, if this really was a representative republic, where our elected 'leaders' acted in the best interests of the People, then would we really be having these conversations in the first place?
Would tens of millions of illegals be taking over the country? Would the Fed Reserve exist? Would the IRS exist? Would multi $trillions have been conjured and given to connected parties?
Seriously, does any of this makes sense? It does if you step back and review events from an appropriate perspective. The PTB know our goose is cooked, and are setting up the populace for new & improved lower living standards.
And don't you dare say poop, otherwise you might be added to certain DHS "lists".
Don’t worry. According to Paul Krugman, debt is irrelevant.
“Will Dozens Of State And Local Governments Default On Their Debts?”
Yes. Be prepared.
Well, a blog named “Economic Collapse” probably won’t be a place for cheery news!
It’s a race to the bottom with regards to currency devaluation. It can’t end well, and BTW I didn’t say “poop”.:)
“incoming governor Jerry Brown is scrambling to find billions more to cut from the California state budget”
The only way this will work is if he keeps paying the Union members, but they don’t provide any services.
Bernanke would likely just start buying state and local debt, just as he is doing at the federal level with US Treasuries/MBS from Fannie and Fraudie.
I believe buying state and municipal bonds would be a violation of the Federal Reserve act, but since when did the law apply to Bernanke?
RE: I believe buying state and municipal bonds would be a violation of the Federal Reserve act, but since when did the law apply to Bernanke?
State and municipal governments are so broke, and so desperate, that they are taking unprecedented steps to at least temporarily avoid bankruptcy. Nearly every state in the union is talking about legalizing some form of gambling, to boost tax revenue. California still wants to legalize marijuana, even though it was defeated in the recent election.
Of course, none of these ridiculous steps will work in the long run.
And the truly amazing thing is that the U.S. Federal government is in EVEN WORSE shape than the local governments! The only reason we haven’t seen the full brunt of this crisis yet on the federal level is because we’ve just continued to pile on more and more debt.
The states can’t print money... but the Federal government can (at least for now). And for the moment, this is all that is preventing a currency collapse of unprecedented proportions.
And this is the important point: What most people don’t realize is that the U.S. government can only continue printing dollars... as long as the U.S. dollar remains the world’s reserve currency.
Most Americans don’t believe the U.S. dollar could ever lose its spot as the world’s reserve currency. The question is this -— IS THIS STILL A VALID ASSUMPTION ?
Cheng Siwei, a former vice-chairman of China’s Standing Committee, said that China is going to stop putting so much money into U.S. dollars, and will instead look to the Japanese Yen and the Euro.
China holds more U.S. dollars than anyone else on the planet. But China is getting out of the U.S. dollar as fast as they can without crashing their own economy.
The New York Times reports that: “now, many shops in China no longer accept dollar-based credit cards issued by foreign banks... and foreigners cannot convert American dollars into renminbi beyond a given quota.”
Given all these factors, I cannot help but think that it’s not a matter of “if” the U.S. dollar will lose its status as the world’s reserve currency... it’s simply a matter of “when.”
“The only reason we haven’t seen the full brunt of this crisis yet on the federal level is because we’ve just continued to pile on more and more debt.”
This is true, but your debt/GDP ratio is actually pretty solid. Especially when compared with Europe and Japan.
If the Chinese want to piss away money then that’s their decision to make. I’m long on the US Dollar, provided it remains where it’s at I’m making money.
Then there’s the EURO which has completely fallen apart and continues to collapse. Why on earth would I want to be buying Euros in the middle of their sovereign debt crisis?
How about requiring that retired public workers do some kind of “community service” to receive their pension checks? Say up to 35 years after they began work.
As soon as the dollar is no longer the world’s reserve currency, we will long for the days when we were just screwed. By that time, we’ll be far gone(VERY screwed).
I’d suspect we would push for a ‘world currency’ before we reached that point.
RE: Why on earth would I want to be buying Euros in the middle of their sovereign debt crisis?
You wouldn’t. You would want to look at the currencies of countries that have better finances though. The Aussie and the Swiss Franc come to mind.
Both I think are too high right now. Same with the CDN.
But in terms of looking for a safe haven, I can’t disagree with either.
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