Posted on 07/03/2009 3:14:41 AM PDT by mylife
Move Over Fed, California's Now Printing Its Own Money
Watch out Ben Bernanke, the Federal Reserve now has competition in the currency game. California is planning to create its own money in the form of IOUs, just like the Fed. What is the California IOU – currency or an interest bearing note?
Officially the IUOs will be called “registered warrants”. State Controller John Chiang planned to issue $3.4 billion, maturing on Oct. 1 to replace state payments. The interest rate is set to be determined on Thursday, but cannot exceed the statutory limit of 5%.
The San Jose Business Journal “California banks ponder their stance on state IOUs” reports that banks are equally perplexed about whether to accept the IOUs and how to process them. But the banks are loath to upset the state with the largest economy in the nation; the state capable of generating the largest investment banking fees.
Bank of America (BAC) issued a statement saying they will honor the IOUs through July 10. Wells Fargo (WFC) and JP Morgan (JPM) have not decided. The smaller banks were mixed.
California’s ingenuity poses an interesting dilemma for the Fed. The IOUs would be structured as short-term tax-free bills, but trade like cash. Banks are being asked to accept the IOUs and advance customers interest. Should the Fed sanction alternate forms of money?
Disclosures: Author is long BAC and WFC.
It’s quite a mess.
< sputter>But, there are so many inflationary strategies we haven't tried! < /sputter>
It would be funny, if it wasn't so serious.
0: "I predict unemployment will rise to 7, maybe 8 percent. No wait, make that 9. Okay, 10 is possible, but 11 will be the highest. After 12, we shouldn't see 13 for a while."
J. Carter is heaving a HUGE sigh of relief, now that he's off the hook as the biggest clown in modern presidencies.
Obama is no Carter. Carter was a misguided rube, This guy is calculating and purposeful in his destruction of America.
No State shall... coin Money; emit Bills of Credit;...
Registered warrants are the root of all evil.
Yeah. Seems like Ahhnald kinda got the cart ahead of the horse here.
I was on the fence for a while on this but with each passing day I'm coming to the same conclusion. What is happening may be due to naivete but it certainly isn't occurring by chance.
Good point -- 0 continues to blatantly lie while he cynically plays to the entitlement mentality of a large section of American populace.
It's sad that he's getting away with it so cleanly, with a compliant press and worshipful interviews.
It's gotten to the point of rediculous. When he's speaking, even during a press conference, it's like he's watching a tennis match -- teleprompter left, teleprompter right, glance down, teleprompter left, teleprompter right, glance down.
It is my personal opinion that Obama’s motivations go back to his Kenyan roots.
He was likely raised on a steady diet of how the “west” oppressed the third world and amassed wealth on the backs of the down trodden.
IMHO his intent is to destroy that wealth in order to “level” the playing field.
Sadly, China is likely to become the dominant power in the world if he continues.
Does anyone really think China will be a more benevolent super power than the US?
His actions to date have been reprehensible.
Morgan and BOA can take those warrants, buy others, bundle them into CDOs and then sell them on the exchanges maybe as Californicated CDO maturing 10/1/09.
Just think of all the MBSs that could be written off the Cali IOUs! It could ignite another round of home building.
Why, we could have infinite fiat between this and the ClownBuck. Whatta job! /s
*Yeah, it’s sarcasm.
Obama doesnt surprise me, he isnt an American anyway. but what about the Democrats in the House and Senate who are going along with this BS.?
/s taken, but I dont think JP Morgan will bite.
They are still standing because they have avoided most of the foolishness.
Here’s an article written by a woman from Nigeria, I believe, who talks all about Hussein, his African roots and the effects thereof.
http://www.americanthinker.com/2009/06/obama_the_african_colonial.html
Yes. I have seen that article.
Thanks
How on Earth is a Republican going to be elected governor next time around after having to follow Arnold. This is so embarassing that Arnold is Republican...I wish he was at least Independent so the poor Republicans who are running for governor does not have to hear from constituents “Arnold was a Republican...look at the mess...And you want ME to elect another Republican?” I really feel sorry for the Republican candidates in the next governor’s election. They are going to have a very difficult time.
BTW, I formulated my opinion prior to seeing that article.
All Ahnald has to do is say he “inherited” the mess from Gray Davis /s
The US Constitution ALSO says that “No State shall make anything but gold and silver coin legal tender”.
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