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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (72311)	2/1/2010 6:52:48 AM
From: KyrosL	Read Replies (4) \| Respond to of 74559

Federal debt and muni debt are not exactly equivalent. In general there are not many hard assets behind Federal debt. But most of muni debt has real assets backing it such as power plants, stadiums, hospitals, etc. Theoretically, privatizing those assets would eliminate a lot of the muni debt. Take a look what a city near bankruptcy is doing. Asset sales are integral to the process, and muni debt will probably emerge from the process not with much loss of principal. Message 26289176

To: Haim R. Branisteanu who wrote (72311)	2/1/2010 2:56:31 PM
From: Maurice Winn	1 Recommendation Read Replies (1) \| Respond to of 74559

Financial relativity theory allows for two ways to do the job of cutting government spiv pay. One is to tell them "Your pay is being halved from today". Another is to halve the size of the bank notes they get by pixelating a whole lot more of the money, so they get paid "the same" pay rate, but what they can buy for the money is half because of inflation. That can be a sneaky process because with house prices down and going down more, the government spivs have had effectively a pay increase = they can go shopping for houses at bargain prices. By halving the size of the bank notes [figuratively by printing twice as many as existed, I don't mean actually making smaller pieces of paper, which is actually plastic] inflation is concealed in that house prices stay the same, which doesn't look like inflation, government spivs get the same pay and the producer of the money gets to spend all that extra loot they have just pixelated. Hey presto, that's just what they have been doing. As Big Ben has said for years - he can load helicopters and bury everyone in money and thereby avoid deflation. Mqurice