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  • Will Bernanke Monetize Municipal Debt Next? [View article]
    Like the federal government, state, county and local governments are wasted with a cancer the public officials simply refuses to treat: insolvency, swollen services and highly paid unionized employees.

    Rather than treat a solvency problem with the appropriate actions, we will simply kick the can down the road and allow current leaders to pretend the problem has been fixed with liquidity even though its not sustainable.

    As far as the Fed goes, anything is possible with Bernanke at the helm and if the Japanese experience is any guide expect the head of the Fed to become increasingly desperate and consider what the Japanese are doing as we seem to following in their footsteps. From a press release:

    The Bank will examine establishing, as a temporary measure, a program on its balance sheet to purchase various financial assets, such as government securities, commercial paper (CP), corporate bonds, exchange-traded funds (ETFs), and Japan real estate investment trusts (J-REITs) and to conduct the fixed-rate funds-supplying operation against the pooled collateral."
    Nov 21 03:07 PM | 1 Like Like |Link to Comment
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