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.
If idiotObama poises China, then he’s their puppet. Why you think he’s teleprompted and needs others to write journalist answers (asking for questions days in advance!)
Obviously he is consulting.
The Machurian candidate is admired by Congress for cosharing a guiltlessness in his local models lobbying them. What they forget is that he is a slave of the illiterate Imams and Chinese and other socialist lawyer clique out there. He will betray them.
I don’t know about y’all, but if California owed me money, I wouldn’t accept anything but US currency. Realistically, I should demand my payment in gold or silver or oil. Something of value.
Yep. Californica has become a loose canon for foreign picking and dependency... and the weak overspent feds which promised to support compliant states is getting no return.
It’s not stupidity - quite the contrary - it is greedy and power hungry people who care not for their country nor their fellow man (nor even their long term future which will be naught due to the law of unintended consequences)who have destroyed us from within.
Sadly, we will reap what they have sown for we have failed to stop them in our inertia, our compassion, our short sightenedness....whatever the combination may be.
True
The actual clause is: No State ... shall make any Thing but gold and Silver Coin a Tender in Payment of Debts" There is NOTHING there about "United States money." In fact in Thayer vs. Hedges 22 Ind. 282, 286-87 (1864) the court said: "States, though they cannot coin money, can declare gold or silver coin or both whether coined by the Federal, or the Mexican, or the Spanish Government shall be legal tender." Thayer also said, "The words delegating to Congress the power 'to coin money,' regulate the value thereof and 'of foreign coin' do not include the right (sic.) to coin money out of paper."
We've come a long way, baby.
ML/NJ
Nope. Plain old Grocery
Is that a green shoot I’m seeing?
If California is printing Money—they should put the mad Emperor Norton on the bills. He was the San Francisco mad man who said he was the Emperor of America. At least his face might make them valuable as collectors items.
More like a crap shoot
You're in the wrong aisle, Morris!
I’m with you.
I just found some yesterday for 69c a can.
Its a store brand, but what the hey? It’s for the dawg.
Hey don't forget to offer 10 or 15% interest, payable upon "redemption", wink wink. And when redemption time comes and goes and you're still broke, just issue new ones, like CA is going to do.
Have you noticed how the keep reducing the size of the tuna can and charging the same amount? Used to be a small can was 8 oz., not it’s 6 - same price.
Same with coffee and ice cream. Same price, about 25% less in the container.
Yes. I have noticed.
People look at me goofy when I say chef boyardee ravioli is up 100%
“Its only a buck”
Buy them at discount from recipients and cash them in in October. Why can’t we make money off of California’s stupidity?
Without getting into the whole Federal Reserve thing .....
Starkist 10 cans at Sams $7.88
You really should just lurk and not post comments about stuff you don't know much about. FRN's used to carry this notice (until the mid 1960's):
THIS NOTE IS LEGAL TENDER FOR ALL DEBTS(FRNs before 1933, weren't legal tender, but were redeemable in gold or "lawful money.") So obviously FRNs were not "lawful money" and they still aren't.
PUBLIC AND PRIVATE AND IS REDEEMABLE IN
LAWFUL MONEY AT THE UNITED STATES TREASURY
OR AT ANY FEDERAL RESERVE BANK.
ML/NJ
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