IOU One More Piece of Paper Money

California has so degraded itself into a laughably Leftist socialist/commie-

think nightmare that they have, as all socialist/commie-think countries always

do, finally bankrupted itself. As Margaret Thatcher, erstwhile prime minister of

England, once said, “The problem with socialism is that you eventually run out

of other people’s money.” Hahaha! Exactly!

And now California has run out of money! Exactly!

Now, to demonstrate their complete worthlessness as thinking, rational beings,

California has decided that it will not cut expenses overmuch, but will pay

for things not with money, but with IOUs! Hahaha! IOUs! Hahahaha!

There is Something Beyond Surreal (SMS) about all this, and it’s that very

farcical stupidity that explains why hyperventilating conspiracy theorists like

me come up with the weird conspiracy theories that we do; it is just too

damned weird to be real!

I mean, the fiat currency of the USA has been so abused by over-issuance that

it has lost about 96% of its purchasing power since the loathsome Federal

Reserve took over in 1913, and is now about to be reprised by California

issuing another paper money! Hahaha! Paper money everywhere! The state

with two fiat currencies! Hahaha!

This may have something to do with how California has seen a precipitous

drop in tax revenues, which in turn may have something to do with the Labor

Department releasing its Metropolitan Area Employment report which shows

that “In May, 112 metropolitan areas reported jobless rates of at least 10.0

percent,” which I admit does not have much to do with California until we get

to the part where El Centro, Calif., “recorded the highest unemployment rate,

26.8 percent,” and “Among the 15 areas with job-less rates of at least 15.0

percent, 7 were located in California.”

This is, as Margaret Thatcher said, because Californians have run out of money

to support everyone who ever walked up with their hand out looking for a free

lunch, and the wealthy people in California are leaving the state to keep from

having everything they have taxed away. Bummer!

Actually, California is a beautiful place unfortunately populated by Leftist

idiots, and as such is but a pale microcosm of the Whole Freaking Country

(WFC), and as a result, as Bill Bonner here at The Daily Reckoning said,

“America’s position relative to the rest of the world is weak and in decline.

She is not a creditor; she is a debtor. She is not a low-cost competitor; she is a

high-cost competitor. She no longer has a free and flexible economy; she has

one freighted with central planners, regulators and busybodies.”

And California is not the only one hurting, as Byron King of Outstanding

Investments writes that everybody has taken a whack to the wallet, as “There’s

no disputing the extraordinary shock to household wealth in the US. From mid-

2007 to March 2009, according to the Federal Reserve, household net worth

plunged $14 trillion, or 21.5%.”

A fifth! A fifth of everything we thought we had is gone!

In fact, most of the losses were recent, as “Just during the second half of 2008,

household net worth plummeted nearly $8 trillion – with an eye-popping $4.9

trillion dip in the fourth quarter.”

Wow! No wonder people are being laid off! No wonder spending is down! No

wonder we are screwed!

Until next time,

The Mogambo Guru

for The Daily Reckoning