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Two More Straws onto a Struggling Camel's Back?
http://seekingalpha.com/article/148411-two-more-straws-onto-a-struggling-camel-s-back?source=email ^ | July 13, 2009 | Old Trader

Posted on 07/15/2009 5:13:18 AM PDT by arthurus

The first, which will have the most visible impact on John/Jane Doe, is in relation to California's financial woes and their issuance of IOUs. While certainly rare enough (fortunately), the issuance of IOUs by a state in lieu of payments isn't without prescedence. California did the same thing back in '94. What has changed between then and now, is the response of banks to the issuance. Back in 1994, the banks all accepted the IOUs as legal tender, so once the public got over the initial shock, they quickly found that they could deposit the scrip into their accounts and write checks for their rent/mortgage payments, utility bill, etc. So the only effect, actually, was possibly a step, or two, added to the mechanics of the transaction, from the banks' point of view.


TOPICS: Business/Economy; Government
KEYWORDS: cit; collapse; ious; urlisnotthesource

1 posted on 07/15/2009 5:13:18 AM PDT by arthurus
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To: arthurus
Didn't California cast 55 electoral votes for the "great messiah" who was going to "fix" everything. Well, chickens do come home to roost.

No sympathy here.

2 posted on 07/15/2009 5:21:10 AM PDT by The Sons of Liberty (Restore The Constitution - Remove The Kenyan Usurper! ---- FUBO!)
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To: arthurus

California actually has defaulted by issuing IOUs.


3 posted on 07/15/2009 5:22:51 AM PDT by DB
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