Beginning Friday, July 10, Bank of America, CitiGroup, Wells Fargo, Morgan Chase, and other major banks will no longer accept anymore of the $3 Billion in California IOUs the bankrupt state plans to issue in July alone.
According to the Wall Street Journal report, today, “If California continues to issue the IOUs, creditors will be forced to hold on to them until they mature on Oct. 2, or find other banks to honor them. When the IOUs mature, holders will be paid back directly by the state at an annual 3.75% interest rate. Some banks might also work with creditors to come up with an interim solution, such as extending them a line of credit, said Beth Mills, a California Bankers Association spokeswoman.”
Meanwhile, Fitch Ratings on Monday dropped California’s bond rating to BBB, down from A minus, the latest in a series of ratings downgrades for the state.
{ 2 comments… read them below or add one }
More proof positive that the original jurisdiction governments of both the united States of America and the former California Republic, created by We the People, are long dead, usurped and replaced by corporations known respectively as THE UNITED STATES and the STATE OF CALIFORNIA. The very issuance of the IOUs is blatantly anti-constitutional under the original jurisdiction Constitution for the united States:
From Article I, Section 10. No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility.
IOU = ‘emit bills of credit’
Done openly, right in front of our collective faces, yet there is little outrage and no hue & cry! Wake up—your Republic is GONE!
Yet we forgot that California retains enough real money in ‘deep storage’ sufficient to resolve our problems. Despite the gold rush of the 19th Century, over 90% of the original mineral deposits remain. If only we can wake up to the facts and reverse the giveaway engineered 15 years ago by Diane Feinstein under the guise of ‘desert protection’.
http://en.wikipedia.org/wiki/Chocolate_Mountains
http://www.freerepublic.com/focus/news/955487/posts
Great, now the SEC wants to “securitize” california’s IOUs.
Next will be a derivatives market on the junk paper, and we can have a whole new economic implosion based on speculation and borrowing against even more debt!
WONDERFUL
http://news.yahoo.com/s/ap/20090709/ap_on_bi_ge/us_california_ious_sec_5