Sunday, February 26, 2012

State representatives on Friday advanced legislation to launch a study into what Wyoming should do in the event of a complete economic or political collapse in the United States. House Bill 85 passed on first reading by a voice vote. It would create a state-run government continuity task force, which would study and prepare Wyoming for potential catastrophes, from disruptions in food and energy supplies to a complete meltdown of the federal government. The task force would look at the feasibility of Wyoming issuing its own alternative currency, if needed. And House members approved an amendment Friday by state Rep. Kermit Brown, R-Laramie, to have the task force also examine conditions under which Wyoming would need to implement its own military draft, raise a standing army, and acquire strike aircraft and an aircraft carrier. The bill’s sponsor, state Rep. David Miller, R-Riverton, has said he doesn’t anticipate any major crises hitting America anytime soon. But with the national debt exceeding $15 trillion and protest movements growing around the country, Miller said Wyoming — which has a comparatively good economy and sound state finances — needs to make sure it’s protected should any unexpected emergency hit the U.S. Several House members spoke in favor of the legislation, saying there was no harm in preparing for the worst. “I don’t think there’s anyone in this room today what would come up here and say that this country is in good shape, that the world is stable and in good shape — because that is clearly not the case,” state Rep. Lorraine Quarberg, R-Thermopolis, said. “To put your head in the sand and think that nothing bad’s going to happen, and that we have no obligation to the citizens of the state of Wyoming to at least have the discussion, is not healthy.” Wyoming’s Department of Homeland Security already has a statewide crisis management plan, but it doesn’t cover what the state should do in the event of an extreme nationwide political or economic collapse. In recent years, lawmakers in at least six states have introduced legislation to create a state currency, all unsuccessfully. The task force would include state lawmakers, the director of the Wyoming Department of Homeland Security, the Wyoming attorney general and the Wyoming National Guard’s adjutant general, among others. The bill must pass two more House votes before it would head to the Senate for consideration. The original bill appropriated $32,000 for the task force, though the Joint Appropriations Committee slashed that number in half earlier this week. University of Wyoming political science professor Jim King said the potential for a complete unraveling of the U.S. government and economy is “astronomically remote” in the foreseeable future. But King noted that the federal government set up a Continuity of Government Commission in 2002, of which former U.S. Sen. Al Simpson, R-Wyo., was co-chairman. However, King said he didn’t know of any states that had established a similar board. Contact capital bureau reporter Jeremy Pelzer at 307-632-1244 or jeremy.pelzer@trib,com Read more:

Saturday, February 11, 2012

Login With Facebook | Login With Twitter | Login | Register Business Insider Money Game Home Tech/Media Finance Politics Entertainment Advertising Sports Life Strategy More Events BI Intelligence Money Game Home Economy Markets Investing ETFs Hive Tape PR Contributors Documents Jobs UBS Asks: Has Greece Already Been Printing 'Quasi-Drachmas'?! Joe Weisenthal In a note from this week, UBS economist Stephane Deo asks: Is Greece (already) printing its own money? Deo centers on two areas: The first is the expanding balance sheet of the Greek central bank via the ELA (Emergency Liquidity Assistance) a scheme by which the national central banks help in keeping the domestic banking industry solvent. The other focus area is a little more intriguing and arcane. He asks specifically: Are quasi-drachmas being issued? Quasi-drachmas? Well what he's referring to is a scheme whereby the state has paid hospital suppliers in the form of domestically issued bonds: The Greek state hospitals accumulated arrears to suppliers during the period from 2005 to 2010. In May-June 2010, the Greek government decided to put an end to this practice and decided to take up this outstanding debt (law 3867/2010). In the following months, all the accumulated debt of public hospitals and the healthcare system from 2005 to mid 2007 was settled on a cash basis. The amount was EUR1.5bn for the years 2005 and 2006, with an additional EUR240 million for the first half of 2007. A total of EUR5.6bn accumulated between 2007 and 2010, was settled with zero coupon bonds. This was the creation of the “Pharma-Bonds”. These financial instruments are bonds, and have all the characteristics of Hellenic Republic Bonds: they bear international securities identification numbers (ISINs); they are negotiable on the Athens Exchange and they rank pari passu with other Greek debt. The government, in one of its press releases, notes that “bondholders who choose to discount these bonds at the banks will crystallise a 19% discount versus their original claim.” We would argue, however, that they are more than just another bond issued by the Greek government. To be specific, they seem to us very akin to what economists call quasi-monies. These quasi-monies have appeared in a number of cases, usually put in place by government to find an escape valve out of nominal fiscal rigidities in the face of a financing issue. This especially happens in a case of a government of a monetary union that cannot print money to fund its deficit. Deo goes onto compare these "Pharma-Bonds" to the famous IOUs issued in California in 2009, when the state no longer had the cash to pay some employees and vendors. Argentina did something similar during its famous debt crisis -- creating quasi money vehicles when it could no longer literally create money. And in the case of Greece, the pharma-bonds seem unusually money-like, in that they can be deposited with a bank, which can them pledge them as collateral for real cash. He concludes: If a country issues a bond as repayment, even temporarily, for a supplier, then there is no withdrawal of money from the private sector as no-one purchases the bond with cash. It is a form of barter in which the vendor provides a good to the administration and receives a financial instrument created ex nihilo from the same government. This is quite complex and tortuous, but at the end of the day it is not that far away from money printing in Greece. (Via @dutch_book) Read more: