Sat, Feb 25, 2012 - 9:37pm
If you ever have doubts about prepping, this is for you.
IMO, here's what is the single most important article of the week. Yes, that's saying something (and no offense intended towards The Turd). And yes, this likely effects you. It has completely flown under the radar of most sites that follow what I call the E^3 (E-cubed) crisis (Economy, Energy and the Environment).
Here's the article:
In short, Muni's have drastically curtailed their bond offerings over the past year. By a whopping 32% YOY. The significance here is that cities and states are putting off maintenance, including on critical infrastructure.
Like water supply systems.
The article gives an example for New York City, of a leak in one key reservoir of 13 Billion gallons a year. The bond offering to fix this was pulled.
They point out that NYC has multiple sources of water. But if the reservoir was closed for an extended period of time, there would be trouble.
Now, jump back to the bigger picture of what's going on. Cities, States, and Nations all need financing, via Bonds. But what's going on in Greece has started calling into question the safety of Bonds. The EU changed the rules on the fly, making certain that some come out ahead, while guaranteeing that others lose.
Would you invest in a situation like that?
Add into this mix the question of whether the ISDA is going to play by the original rules for CDS's. As Jim Sinclair pointed out, there's a strong motive for the ISDA to protect the big banks which run it, by not declaring a credit event upon a Greek default.
Or, in short, the "insurance" for Bonds goes away. That will have a significant impact on confidence in the system.
Then add into this the loss of confidence that the MF Global mess has caused. Bit by bit, confidence in the system is being chipped away.
And it's confidence which keeps the entire financial system up.
The point here is that it is questionable now whether the Muni's will be able to finance the maintenance on all of the infrastructure when it's needed. This includes not only the water supply, but the electrical grid and transportation systems as well.
That, folks, is why one needs to prep. Hopefully I don't even need to point out the effects of some of those systems on our fragile food supply chain.
This has been talked about for years, if you've been following it. We're now seeing it in action.
Edited by: Eternal Student on Nov 8, 2014 - 5:06am