Reuters just published an article called, More U.S. Cities Set to Enter Default Zone when I saw it all I could this was well duh, is this really a surprise to anyone, sadly it is. From the article,
“But the next series of major cities and counties in danger of defaulting on their debt can hardly point to one single decision for their malaise. Whether it be Detroit, Miami or Providence, Rhode Island, their problems have a lot more to do with financial policies that put them on course to live well beyond their means.”
When I read stuff like this the sarcasm just pours out of me, I just want to shout “really? really? you are telling me that government borrows money to pay for what it can’t afford and eventually the bill comes due.” The real news here of course isn’t that cities are going broke along with counties and that states are not behind them. If you read TRTAM and listen to The Survival Podcast you have been hearing that for two years now. To me we are starting to entering the “point of acceleration” I have been worried about for so long.
You see what you are looking at right now is a pattern that the main stream media has repeated over and over. Leading up to an event they will permit a few contrarians who speak the truth to come on once in a while, in this case the best example is Meredith Whitney who has been speaking about the coming defaults for even longer than I have. In fact I must credit Meredith with being one of my main sources to uncovering this coming financial disaster.
Of course the news channels then bring out three or four so called “expert” talking heads to mock the one person who is speaking the truth. Down the road the problem becomes more evident and while never apologizing or acknowledging the accuracy of the contrarian they begin to cover the issue while still down playing the real problem. Not long after that the problem becomes something we hear about over and over and everyone blames everyone else and “we the people” deal with the suffering.
So to me it is important that we watch coverage of this issue closely, trust me the more main stream coverage it gets the closer we are to the point where the problem comes to its unavoidable conclusion as a raging economic storm. When it does the politicians will showboat and blame but have no solutions. Everyone will act shocked and tell us something completely stupid like, “no one could have seen this coming”. In summary, there is a major global recession on the way and the municipal bond defaults that are coming may very well be the catalyst that sets it off. One thing we can say for sure is, it certainly isn’t going to help anything.
The last line of the Reuters article says it all, “At an industry conference last month in Philadelphia, Richman said, “A lot of the easy fixes are gone.”
Indeed they are, in fact I would put it more accurately and simply state, there are no longer any easy fixes. Austerity at the State, Country and City level is on the way and likely Federal level austerity isn’t far behind. This is not time to let a smile be your umbrella, if you do expect that soon your ass will be soaking wet.