The prospect of California issuing IOUs raises the intriguing prospect of a new, freely tradeable currency in the middle of the world’s principal single currency block. Clearly, the Cali will trade at a discount to the greenback, but how big should it be? Should there be a new Californian Monetary Authority to control the paper the state issues? And will the IOUs carry redemption dates where they can be converted into the real thing? This could be the start of something big…
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3 comments so far
Reads familiar. See http://www.mullings.com/07-01-09.htm from last night.
Rich
- Posted by Rich Galen1. Time value of cash invested in mmkt
- Posted by josh2. IOU holders need for USD cash/discount willing to take
3. interest paid from california
4. legal tender that california holds
5. California default prob.
6. Option value of repay Oct. 1
In our country (Australia) if the Government cannot get its budget passed the Government is dismissed, an election is called and a new Government is sworn in.
Let the people decide!
- Posted by Lynne