Defaulting banks - where will it stop?

[Jan Klimkowski]

BOHICA time.

So California is now issuing "registered warrants" - a fancy name for IOUs.

This is occurring as a consequence of the cash flow finally catching up with them, and it serves as a warning to not only other states but also to The Federal Government - you can only lie about how much money you really have for so long; eventually you will start bouncing checks!

Major banks have said they will "accept" them through Friday. How much of this "deadline" is a pressure tactic to try to force the legislature to solve the budget problem is unknown, but this much is known about their "acceptance" - if you deposit one of these things it is a recourse deposit - that is, not only is it subject to holds but in addition if the state defaults on it the bank will come back at you for the full face value.

.....


In truth there is no hamburger; the cow was slaughtered and eaten six months ago. It has long since been "recycled" into fertilizer, yet the charade continues onward for another day, with the sheeple believing that somehow these pieces of worthless paper make it "all ok."

The banks, assuming they stick to their Friday deadline, understand this. They're saying "uh, you know, come October those things might not actually BE good!" That's a problem, you see, as someone's going to be stuck with the bill if that happens.

A "trading environment" has almost instantly sprung up for these things, including on eBAY and Craigslist, which has led to rumblings that the government may have petitioned the SEC to deem these things "securities." Huh? Securities? Like hell; these are nothing more or less than a post-dated check, and a potentially-rubber one at that. But this hasn't stopped the government from trying to make sure that you, the person owed, are the one stuck with the worthless toilet paper, has it?

http://market-ticker.org/archives/1189-C...-Come.html

if the state defaults on it the bank will come back at you for the full face value.

:bootyshake: