Here's another reason Bernanke is printing. He needs to get cheap money into the economy so that it finds its way into the hands of states like California, who will otherwise be suffocated in debt.
California's Legislative Analyst's Office, California's nonpartisan fiscal and policy advisor, is out with their latest financial projections.
For the fiscal year 2010-11 (ended June 30), the office projects a deficit of $6.1 billion followed by a $19.3 billion deficit for the 2011-12 fiscal year.
The Office assumes that the state will be unable to secure around $3.5 billion of budgeted federal funding in 2010–11. The Office also projects higher–than–budgeted costs in prisons and several other programs. In addition, the forecast assumes that passage of Proposition 22 (a ban on state borrowing from local governments)will prevent the state from achieving about $800 million of budgeted revenue in 2010–11.
The Office projects annual budget problems of about $20 billion each year through 2015–16.
It won't take long to learn how bothered the markets are by this news. California is attempting to raise almost $14 billion in new debt over the next two weeks.
Treasurer Bill Lockyer has announced that he expects to sell $10 billion of RANs (Revenue Anticipation Notes) early next week in two series. One would mature in May 2011, the other in June 2011.
In addition to the RAN sales, Lockyer plans two long-term general-obligation bond offerings.
The state will sell $2 billion of taxable Build America Bonds on Nov. 18 followed by the sale of $1.75 billion of conventional tax-free bonds on Nov. 23.
Great - we pay to bail out the public unions, the eco-nimbys, the unfunded pensions, and the general entitlement class of the once-promised land of the golden state; now just a place to get handouts, over taxation, and basically legal weed.
ReplyDeleteThanks a lot, jerks; I liked your state a lot better when it was home to innovation and prosperity.
Seems like a really stupid plan if the printing of money pushes up "risk-free" interest rates and therefore results in a rise in "risky" interest rates on, say, CA muni debt. Maybe he'll create the cash they need, but not in time for them to utilize it before bankruptcy. I'm still wary of this plot.
ReplyDeleteRevolution is the Solution!
ReplyDeleteI quit paying taxes; they can throw me in jail if they want to, but I bet they can't afford that either!
ReplyDeleteIt looks just like Detroit, -civilized, fair and sustainable.
ReplyDeleteBut the level at which it is civilized, fair and sustainable is best-likened to a police state in a depression where life is so unpredictable, all anyone can do is just hang on -hoping no one beats the life out of us today, knowing all-the-while our turn is coming...
God bless the modern world. If this is what the Enlightenment thinkers had in mind, they had a deep-rooted hatred of all humanity.
For- they gave us Hell, -by most our most common epithet for it.
They sold it to us with visions of space travel and flying cars. And now, our day is ruined at the prospect of just having to take the bus downtown to see some vile -if ubiquitous- bureaucrat.
Face-tattoos are catching on.
They're seen as a means to tell the bureaucrats who keep us all shuffling along in this prison, -just what we think of them, -without unacceptably increasing the risk of again getting the crap kicked out of us, or again pissing and shitting our clothing as we are being TASERed by the lesser -but still very elite- sadists in government employ.
Economics has nothing to do with it. Economics is just one of the many ways we are lied to. There is no such thing today as "the economy".
We are all just fed kibble in a bowl.
And all the growling dogs are envious of all their neighbors' bowls.
We are told, America is the land of opportunity.
Just look at that dog's bowl -over there.
Yes, Detroit used to make cars.
And yes, California used to make computers.
Now we just import kibble from around the world while everyone is supposed to eek out a living buying and selling CDOs based on everyones municipal bonds, mortgages, pensions and life insurance policies.
It just doesn't seem possible -that THIS was worth giving up the state of nature for, but if you say so, sir... You're the boss, and I really hate being TASERed.
This is all by design and the offshore bankster owners will further break you Americans and bankrupt you so they can pick up companies, infrastructure and properties for pennies on the dollar. Read about what JP Morgan did called panic of 1907
ReplyDelete