Pension Funds Can Be Reduced in Bankruptcy
One of the important developments is the Stockton, California bankruptcy. The jurisdiction for bankruptcy is federal court, not state. This is rather significant and the law is really clear, there are no exceptions among creditors under bankruptcy. A federal judge earlier this week gave the green light to Stockton, Calif. to restructure under bankruptcy protection and that applied to the state pension funds.
Perhaps nobody wants to really address this issue openly, but it is the pension funds that are destroying state and local governments who cannot simply print money as can the Feds. As one state employee retires, they are replaced and that means the cost of government goes exponential. We are looking at the cost of state and local governments doubling over the next 10 years and that is simply not sustainable. This is HIGHLY deflationary because they increase taxes and have no means to expand the monetary system. Thus, all the arguments of those selling the hyperinflation scenarios are omitting the impact at the state and local governments that will be deflationary.
This court ruling is CORRECT! This is the way out of pension liabilities for state and local governments. It was the Great Depression when Congress in 1934 passed legislation to allow municipalities to file for bankruptcy. So this is not new. What is new with this round of financially distressed municipalities is the cause – pensions.
The escape valve is here. The Stockton ruling is in accordance with law. The way out from the pension nightmare is to file bankruptcy. This ruling will encourage MORE municipalities to follow this lead.
We are preparing a report on the Pension Crisis. It is far worse than anyone suspects. Pension funds are being devastated because they relied on interest, not equities, to fund future payments. With interest rates so low, the Pension Crisis is expanding and far more insolvencies will emerge.
North Korea & Russia Joining Forces?
The barbarians knew when to invade Rome because it had weakened its own economy. The real risk to Europe and the USA is the Sovereign Debt Crisis. Russia can smell the blood. Europe has slit its own throat with this Euro nonsense and the stress is becoming visible along the borders. If there was ever a time for invasion was ripe, hold on to your seats, it is rapidly approaching.This is a fake British note printed by the Nazi government. Historically, one counterfeited the currency of the opposition to undermined its ability to wage war. The West has done this to themselves.
Putin has moved troops at the same time the North Korean is threatening the U.S. and it began to move its missiles today. After flying in from the BRICS summit in Durban, South Africa, Putin ordered the deployment personally. We have to stop this insane debt spiral. It is threatening everything.
The Moscow Times
Euro Rallies on Technicals
Next two weeks remain the cyclical target for a turning point. After making a new intraday low at 12744, the Euro is a bit over done and should rally back to retest the Monthly resistance at the 12975-13030 followed by 13106. We need to see a daily closing above 12977 to stabilize the Euro for right now.
There is a rising trend to leave the Euro mounting in Greece and Cyprus. At the Berlin Conference, we warned that Greece was likely to leave because the computer was projecting that the market would recover the most out of Europe. To accomplish that, Greece must leave. With the rising concern that could be a revolution in Greece, we may in fact see serious issues emerge ahead.
The rally with the Euro getting above the 200 day moving average is purely a technical perspective electing stops. The primary resistance is generally the top of the channels in the 13100 area.
French President Hiding Money?
In France a financial scandal is now threatening to bring down President Francois Hollande, since it emerged that his former Socialist Party treasurer invested in two Cayman Islands offshore companies. Here is the man who is hunting the rich while his own campaign funds go offshore. Amazing!