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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: roguedolphin who wrote (34607)	1/21/2011 3:22:56 PM
From: roguedolphin	Read Replies (1) \| Respond to of 71479

U.S. states must be allowed to declare bankruptcy to reduce pension bills, say Republicans By Daily Mail Reporter Republican politicians are fighting to win U.S. states the right to declare bankruptcy in a bid to free them crippling pension bills and other punishing debts. Currently states such as Illinois and California, which are struggling to pay back loans, are forbidden from claiming federal protection from insolvency. But advocates, including Senator John Cornyn and former House Speaker Newt Gingrich, say states are so burdened by debt that bankruptcy may be the only feasible way out. Senator John Cornyn Former Speaker of the House Newt Gingrich For example, bankruptcy would allow allow governors to reduce contractual pension payments, which are often protected by state constitutions. It could also provide an alternative to bailouts, which Republicans have shown themselves determined to oppose since Barack Obama’s election as president. But there are also fears in Congress that states’ bonds could be reduced to junk and it would put investors off buying U.S. debt. Paul Maco, a former head of the Office of Municipal Securities at America’s financial regulator, the Securities and Exchange Commission, told the New York Times that fear of the words “state bankruptcy” has proponents in Congress going about their work on tiptoe. So policy makers have been forced to work behind the scenes to change the rules, which could require a difficult constitutional amendment as states are considered sovereign by Washington. No draft bill is in circulation yet, and no member of Congress has come forward as a sponsor, although Senator Cornyn, of Texas, asked Ben Bernanke, the chairman of the central bank, the Federal Reserve, about the possibility in a hearing this month. Discussion of a new bankruptcy option appears to have begun in November following a speech by Mr Gingrich about soaring debts. “We just have to be honest and clear about this, and I also hope the House Republicans are going to move a bill in the first month or so of their tenure to create a venue for state bankruptcy,” he said. Although, nothing formal has been outlines, unions are worrying about the prospects of their members losing retirement income. Still, discussions about something as far-reaching as bankruptcy could give governors and others more leverage in bargaining with unionized public workers. Charles M. Loveless, legislative director of the American Federation of State, County and Municipal Employees told the New York Times: “They are readying a massive assault on us. We’re taking this very seriously.” He added that public employees and their benefits were not the cause of the states’ financial problems so should not be treated as a scapegoat. No state is known to want to declare bankruptcy, and some question the wisdom of offering them the ability to do so now, given the jitters in the normally staid municipal bond market. Other experts have warned that bankruptcy is unnecessary as states’ immediate problems are not their long-term structural deficits but their current budgets. “States have adequate tools and means to meet their obligations,” a report by the Centre on Budget and Policy Priorities stated yesterday. James E. Spiotto, head of the bankruptcy practice at law firm Chapman & Cutler in Chicago, said the possibility of some states declaring bankruptcy could also raise the cost of borrowing for others.

To: roguedolphin who wrote (34607)	1/21/2011 3:34:39 PM
From: John	Read Replies (1) \| Respond to of 71479

Yep. It is going to end very badly. -ng-

To: roguedolphin who wrote (34607)	1/23/2011 2:29:58 PM
From: the navigator	1 Recommendation Read Replies (1) \| Respond to of 71479

The Federal Reserve is bankrupt too....NO?? well, according to the change that was made uptown...the fed is now the us treasury...sort of... Accounting Tweak Could Save Fed From Losses cnbc.com But the new rules have slowly begun to catch the attention of market analysts. Many are at once surprised that the Fed can set its own guidelines, and also relieved that the remote but dangerous possibility that the world's most powerful central bank might need to ask the U.S. Treasury or its member banks for money is now more likely to be averted.