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Are California's Ious A Test For The Dollar?

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I was having a think today about California's IOUs. If people and business start treating them like money, could this be the start of a state run fiat currency?

I know the bankers would resist until their last breath was drawn, but people must just want to trade their toil for something else. My other half was telling me that you can buy them on ebay already (by people who needed USD), giving them a fluid exchange rate.

If Californian businesses started to use them more and more and people were happy to trust them, isn't there a real chance they could become a modern day 'green back'? It will be interesting to watch and see what happens...

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I was having a think today about California's IOUs. If people and business start treating them like money, could this be the start of a state run fiat currency?

I know the bankers would resist until their last breath was drawn, but people must just want to trade their toil for something else. My other half was telling me that you can buy them on ebay already (by people who needed USD), giving them a fluid exchange rate.

If Californian businesses started to use them more and more and people were happy to trust them, isn't there a real chance they could become a modern day 'green back'? It will be interesting to watch and see what happens...

The really interesting thing will be to see how the face value of the IOUs compares to the face value of the Dollar.

I expect that an active secondary market will develop for Caliofrnia IOUs which will trade at a steep discount to the Dollar which will only make the situation in California worse.

This self reinforcing death spiral will hurt California first but the rest of the nation soon thereafter.

I sometimes have a hard time distinguishing between noise and signals but I think that this might actually be the signal that predicts the eventual collapse of the United States as a global power.

It will be the first time that we see the decay of a first world power back into the thirld world.

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The really interesting thing will be to see how the face value of the IOUs compares to the face value of the Dollar.

I expect that an active secondary market will develop for Caliofrnia IOUs which will trade at a steep discount to the Dollar which will only make the situation in California worse.

This self reinforcing death spiral will hurt California first but the rest of the nation soon thereafter.

I sometimes have a hard time distinguishing between noise and signals but I think that this might actually be the signal that predicts the eventual collapse of the United States as a global power.

It will be the first time that we see the decay of a first world power back into the thirld world.

+1

Game over man, game over!

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+1

Game over man, game over!

I spend 2 to 3 months a year there.

Great weather. Just about everything else is a calamity.

I agree that the game there is over. Unluckily for us, we have played the same game. The cash buyers of houses in the last 3 months or so just haven't realized it quite yet.

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Guest UK Debt Slave
I spend 2 to 3 months a year there.

Great weather. Just about everything else is a calamity.

I agree that the game there is over. Unluckily for us, we have played the same game. The cash buyers of houses in the last 3 months or so just haven't realized it quite yet.

Me too

I love it over there, but you're right, it's 'Fantasy Continent' and the game is going to be up pretty soon

I'd still prefer to live there permenantly rather than the UK though.

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Me too

I love it over there, but you're right, it's 'Fantasy Continent' and the game is going to be up pretty soon

I'd still prefer to live there permenantly rather than the UK though.

I have 2 Disney Dollars...will they be of value?

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California IOU's are exactly the same as FRN. All a FRN is is a federal IOU. So they are a fiat currency and will traded just like any other FX. All we need now is to make California state taxes only only payable in California IOU's.

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I expect that an active secondary market will develop for Caliofrnia IOUs which will trade at a steep discount to the Dollar which will only make the situation in California worse.

This would be good for CA - they could redeem their IOUs at a discount! ;)

The US Constitution says the States shall make no money save gold and silver (hence dollars being created by the Fed which is a private bank.) At what point does CA break that clause?

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I agree that the game there is over. Unluckily for us, we have played the same game. The cash buyers of houses in the last 3 months or so just haven't realized it quite yet.

Maybe they have realised it, which is why they're turning their pieces of paper (cash) into a solid asset (a home to live in)?

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Maybe they have realised it, which is why they're turning their pieces of paper (cash) into a solid asset (a home to live in)?

The people who are doing that have a lack of imagination. There are much better ways to protect your wealth than buying a house.

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California IOU's are exactly the same as FRN. All a FRN is is a federal IOU. So they are a fiat currency and will traded just like any other FX. All we need now is to make California state taxes only only payable in California IOU's.

Surely what is really needed is individuals in California to issue IOU's to the state in their own names stating they will pay at a later date.

Then all of those IOU's can be traded like any other FX will Mr Magoo's IOU have a higher value of Mr Smiths IOU?

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The people who are doing that have a lack of imagination. There are much better ways to protect your wealth than buying a house.

that will be me and the rest of the population.

spill.

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Me too

I love it over there, but you're right, it's 'Fantasy Continent' and the game is going to be up pretty soon

I'd still prefer to live there permenantly rather than the UK though.

I have thought about that option too. Maybe Tahoe in the summer and the desert in the winter.

At the moment, I am reluctant to take on the future tax liability of living anywhere in the United States (and California in particular) given what is going on at the moment.

The continued erosion of the benefits of being a non-dom here that I expect may tip the balance in the future.

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I have thought about that option too. Maybe Tahoe in the summer and the desert in the winter.

At the moment, I am reluctant to take on the future tax liability of living anywhere in the United States (and California in particular) given what is going on at the moment.

The continued erosion of the benefits of being a non-dom here that I expect may tip the balance in the future.

I too love it over there and lived there for 3 years (Chi-town - winters have to be seen to be believed). And that friends is the reason why your predictions of "game over" could not be more wrong; when more people want to live in a place than leave it, its long term prosperity is assured.

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I too love it over there and lived there for 3 years (Chi-town - winters have to be seen to be believed). And that friends is the reason why your predictions of "game over" could not be more wrong; when more people want to live in a place than leave it, its long term prosperity is assured.

Zimbabwe was a lovely country...green and furtile, exporting food and earning well.

not now.

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Rhodesia appeared to be a lovely country...green and furtile, exporting food and earning well.

not now.

Corrected that for you. But you cannot keep an illusion of niceness based on suppression of the racial majority going forever; and when it reverts it is very difficult to keep the lid on the pent up grievances of the majority. The south africans have done a better job of this than I expected and even they with a superb and iconic leader in Mandela are having trouble keeping things on track.

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Corrected that for you. But you cannot keep an illusion of niceness based on suppression of the racial majority going forever; and when it reverts it is very difficult to keep the lid on the pent up grievances of the majority. The south africans have done a better job of this than I expected and even they with a superb and iconic leader in Mandela are having trouble keeping things on track.

cant argue with your points, except, the racial thing is not an economic issue.

the result of the hyperinflation is killing many. many more have fled.

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cant argue with your points, except, the racial thing is not an economic issue.

the result of the hyperinflation is killing many. many more have fled.

Yes it is! In South Africa they are trying to slowly move from white ownership of the means of production to black ownership with the formerly oppressed majority taking time to learn how it all works and when ready taking control. In Zim they have tried to go for a big bang approach, and murdered/evicted the white owners of the means of production. That approach rarely works well.

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Yes it is! In South Africa they are trying to slowly move from white ownership of the means of production to black ownership with the formerly oppressed majority taking time to learn how it all works and when ready taking control. In Zim they have tried to go for a big bang approach, and murdered/evicted the white owners of the means of production. That approach rarely works well.

no, thats a political thing.

the pound in my pocket cares not what colour I am.

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no, thats a political thing.

the pound in my pocket cares not what colour I am.

Good point. Politics and economics are 2 cheeks of the same a**e though............

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