California Taxpayers Due Refunds May Get IOUs

[LargoWinch]

Question: Do you think you can change CA's IOUs for gold bullion from the US Mint? What a conundrum.

"My office has projected that, in approximately 60 days, there will be insufficient cash available to meet all expenditures reflected in the 2008-09 Budget Act," stated a Tuesday letter from Controller Chiang to the directors of all state agencies. "To ensure that the State can meet its obligations to schools, debt service, and others entitled to payment under the State Constitution, federal law, or court order. California may begin, as early as February 1, 2009, issuing registered warrants...commonly referred to as IOUs...to individuals and entities in lieu of regular payments."

Article link:
http://www.msnbc.msn.com/id/28448852/

[metalman]

Re: California Taxpayers Due Refunds May Get IOUs

Question: Do you think you can change CA's IOUs for gold bullion from the US Mint? What a conundrum.




Article link:
http://www.msnbc.msn.com/id/28448852/

isn't this what itulip has been saying for years, that during the depression usa states will find a way to run deficits as japan's prefectures did in the 1990s? but how? they can't print money as the fed can.

here's our answer... registered warrants.

[seanm123]

Re: California Taxpayers Due Refunds May Get IOUs

Looks like no IOUs in California. Surprise, surprise the banks won’t take them, one million people will just have to go without their disability checks, and the taxpayers will get the shaft on their refunds.


//QUOTE



Those denied payments will not be receiving IOUs in lieu of checks, despite reports to the contrary. Controller Chiang’s office tells CNBC that IOU’s “are a last resort.”

On his Web site, he explains why:


“There are no assurances at this time that all financial institutions will accept registered warrants (IOUs) and it is unlikely that any registered warrants issued will be redeemed by the state for several months. Additionally, registered warrants likely will complicate the cash flow borrowing which the State will be required to undertake in July. As the Governor and Legislature work to fix our budget, they are expected to need short-term or cash-flow borrowing from the credit markets to make any new budget work.”


//UNQUOTE




http://finance.yahoo.com/news/Califo...-14225310.html

[dbarberic]

Re: California Taxpayers Due Refunds May Get IOUs

Jim Puplava once talked about how CA had to issue IOUs before during another budget crisis to pay vendors (I don't remember the date of the last time this happened). Vendors would sell their IOUs to investors for less than face value, creating a way to monetize the IOUs.

Another funny story he told was that businesses would send the IOUs back to CA to make their state tax payments. Ha!

[Andy]

Re: California Taxpayers Due Refunds May Get IOUs

Jim Puplava once talked about how CA had to issue IOUs before during another budget crisis to pay vendors (I don't remember the date of the last time this happened). Vendors would sell their IOUs to investors for less than face value, creating a way to monetize the IOUs.

Another funny story he told was that businesses would send the IOUs back to CA to make their state tax payments. Ha!

I just got a big fat speeding ticket. I'll admit that the thought crossed my mind to use an IOU to pay it... However, I'm pretty sure that the courts wouldn't find the same humor in it as I would.