“Don’t put all your eggs in one basket.”

Once again proof of the adage, “Don’t put all your eggs in one basket.” has proven itself timeless.
Being informed has become an exercise in futility if you try to stick to one source. I found two articles on two different days from two different sources that made a giant light bulb (incandescent, of course) shine some light on a confusing maneuver by our Treasury Secretary. Let us examine the information.

First from the Wall Street Journal on August 10, 2009 –

“Treasury Secretary Timothy Geithner, in a letter to sent to top U.S. lawmakers on Friday, asked Congress to move "as soon as possible" to increase the nation's statutory debt limit. The Treasury estimates that the $12.1 trillion current limit could be reached as soon as mid-October, Mr. Geithner wrote. "It is critically important that Congress act before the limit is reached so that citizens and investors here and around the world can remain confident that the United States will always meet its obligations," Mr. Geithner said in the letter. One issue that will need to be decided is how much of an increase is needed. Mr. Geithner didn't offer a specific figure in his letter to lawmakers. A Treasury official said Monday that the debt increase is due to the deterioration in the economy and not necessarily attributable to spending on stimulus programs or the bailout of the financial system.”

How typical of this administration to not give a definite figure of the increase needed. They just expect everyone to do as they say because they said it. Congress can lay down to that, but the American people don’t like being talked to like they are preschoolers. Our next piece of the pie comes from a financial source.

Bloomberg on August 13,2009 –

“California will stop using IOUs to pay its bills in early September, lifting a burden on businesses, taxpayers and municipalities that received $2 billion of the registered warrants instead of cash as the recession pushed the most-populous U.S. state toward insolvency. Controller John Chiang said the use of IOUs will stop on Sept. 4, pending approval by a panel of state finance officials, and the state would begin redemptions a month ahead of schedule. State Treasurer Bill Lockyer said he plans to sell $1.5 billion of notes by Aug. 28 to meet cash needs, followed by $10.5 billion of such short-term loans in mid-September. With passage of the revised budget, the premium demanded by investors has eased and officials are reviving plans for the short-term note sale -- needed to pave over temporary mismatches between spending and revenue -- that they previously said would be too costly. The controller has issued about 327,000 IOUs worth $1.95 billion since July 2. The registered warrants were set to mature in October and pay an annualized interest rate of 3.75 percent. Lockyer said he plans to borrow the $10.5 billion in mid- September. Proceeds will be used to repay the $1.5 billion initial loan. No decision has been made on what investment banks would manage the sale, treasury spokesman Tom Dresslar said.”

Now, the question presents itself.

Is the Treasury and the Federal Reserve “bailing out” California?

10.5 billion in short term loans, a sell off of 1.5 billion in notes, all of this happening in mid-September and Mr. Geithner informs us that we will reach the debt ceiling by October. There are no investors buying into this crazed California IOU economy. The one place to go is the Federal Reserve. They can keep their books closed as they monetize our debt, set the stage for hyperinflation and we slip farther and farther into an economic black hole. This administration overwhelms the system and they slide scary things by us without our being able to see them. Healthcare has been presented in such a way to get an uprising from the population that we have missed a huge economy killer step and Congress is only to happy to help the White House flush us down the tubes.