The printing presses at 2 p.m. Pacific Time began to roll out the first of nearly 29,000 IOUs totaling more than $53 million, most of the first IOU's are destined for residents around the state still awaiting income-tax returns.
Some banks have agreed to honor the paper, including Bank of America and Wells Fargo, which will do so until July 10.
"We are reluctant to take this step, but are doing so to help our customers who are not at fault and with the expectation that the Legislature and governor will complete the budget within days," Lisa Stevens, a Wells Fargo executive in California, said in a statement.
Some smaller banks have not made a decision on accepting the IOUs, according to LaTi.
Hi Robert, Can you please elaborate for us on the IOUs.
ReplyDeleteSuch as do the banks 'cash' the paper and provide fiat currency in return for it? If the paper is presented to a supporting bank, will it be considered an irregular deposit? What do you think the chances are that the government will actually be able to pay off the IOUs or even have to issue more?
So the California government is issuing IOUs for federal IOUs that really don't owe you anything...humm... swap you for some gold ;)
Dane
Not to worry Californians- the IOUs are being accepted by banks insured by the FDIC. The FDIC is backed by Treasuries, so you have the full faith and credit of the USA government behind you. Otherwise, don't do business with The Man.
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