if you thought the unfair bailouts were finally over with, then you’re going to hate this blog entry.
There’s a new trend emerging all over the USA that you need to know about. A trend that confirms what we know about the fate of the dollar, the US economy and the coming economic collapse. While analysts on mainstream television struggle and stretch to find good news about a “recovery,” the truth is the worst is still to come.
Analyst Meredith Whitney, who famously warned of problems with American banks in the months leading up to the 2008 crash, says this could lead to the next round of bailouts.
What is this alarming trend?
Cities Across the U.S. Are Going Bankrupt
American cities are usually funded by property taxes based on a percentage of the properties value. And since property values ballooned and crashed along with the housing bubble, revenues have fallen drastically from the peak. This means the cities who overspent and over-promised are in full out crisis-mode.
Three Californian cities filed for bankruptcy in just the last few weeks: San Bernardino, Stockton and Mammoth Lakes. That brings the total to seven this year, and many more are considering it.
Warren Buffet suggested these 3 bankruptcies might open the floodgates to many more. That’s because traditionally cities don’t consider bankruptcy an option, but that stigma will fade as more do it.
And since cities are struggling to pay the bills, the pressure to do something drastic is building.
For example…
● A frustrated Scranton, PA mayor put all city employees on minimum wage… including the police and firefighters who risk their lives for a living.
● In Detroit, more than 40% of streetlights are broken, and the city can’t afford to fix them.
● And Colorado Springs, Santa Rosa (CA), Rockford (IL) and Highland Park (MI) are among the many cities turning off streetlights to save on costs.
And States Aren’t Doing Any Better
In fact, most states are struggling to stay afloat.
It’s been reported that some gas station owners in Illinois are refusing to fill the tanks of State Troopers. Why? Because they pay with state credit cards, which the state neglects to pay off.
Arizona state recently sold off 20 properties to raise a quick $735 million, including the state capitol building and both legislative chambers!
And 32 states have borrowed money from the federal government in order to payout their unemployment benefits… to the tune of nearly $38 billion!
The Only Viable Option May Be the Most Dangerous
Even if cities could find a way to borrow enough money to keep afloat, that would mean higher taxes for citizens. And citizens are already strapped for cash. So higher taxes just aren’t politically viable. The most likely option, then, is to fall in line with other cities and declare bankruptcy.
But as more cities pull the trigger and file for Chapter 9 protection, the pressure for the federal government to step in and bailout struggling cities and states will be enormous. And after the November election, politicians who don’t have to face voters for another 2 years will be free to help their friends in city government.
This means you should…
Beware of More Bailouts to Come
The Congress can dish out money for cities and states the same way they did for the banks and auto companies. All it takes is one bill.
And even if the protests are large enough to squash the bailout before it happens in Congress, there’s still the Federal Reserve. The Federal Reserve is not accountable to the people and can bailout cities by purchasing municipal bonds with money created out of thin air.
Either way – if the Congress adds on more debt or the Federal Reserve dilutes the currency with more money-printing…
The Dollar Will Ultimately Suffer The Consequences… Well, Actually YOU Will.
Prepare for the worst. Buy gold and silver coins
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