‘The Great State Meltdown’ Begins Tomorrow!
What to Do BEFORE the Muni Bubble Bursts
Tomorrow, something epic will go down in 48 American states.
It might unfold differently from coast to coast. But there is one common thread: that it will be the worst day of 48 governors’ lives.
You probably won’t hear about it when you flip on your local news. But, we’ve warned readers of this day (July 1) for a month.
Yet some private citizens will not take action … or will take the wrong action.
Some will sell their retirement plans for 59 cents on the dollar. Others will sadly double-down on this toxic debt.
By now, most well-informed “sovereign” readers understand that the local governments’ ponzi schemes are about to collapse.
Today, we’ll show you what to expect when states begin to default on their debt – because that day is almost here.
We’ll also show you how to sidestep the worst of this crisis – and profit from the chaos.
History shows that when states, cities or towns default on their debt… conservative investors lose their shirts. (The average muni-bond plummets… by an average of 40.09%!)
So it’s critical that you avoid the bonds of states that are most likely to default.
How?
By following the numbers.
Take California, for example. The Golden State has a projected $12.3 billion deficit… That’s HUGE… and it’s only going to grow from here.
But the truth is – there’s a handful of states in far-worse trouble.
Check out Nevada. It’s in the hole for $1.8 billion… which doesn’t sound bad compared to California’s $12.3 billion.
But far more important than dollars and cents is the size of the deficit, relative to each state’s budget.
California’s estimated deficit is around 12.5%. Nevada’s is nearly five times as bad… at 59.8%.
And the ugliest state of all is Illinois, which has just $1 million in cash on hand to battle a $12.8 billion deficit!
These numbers are horrific.
States on the Brink of Fiscal Disaster*
But as ugly as this chart looks, the reality is far worse.
What it doesn’t show you is that the majority of states have refused to acknowledge their “off-balance-sheet” obligations…
In some cases, pension funds are tens of billions short … and Medicare is grossly under-funded. Accounting for these “bonus” shortages would put these states even deeper underwater.
In the case of Illinois, their actual deficit is closer to $39 billion – three times worse than it appears on paper – when you factor in under-funded pensions and entitlement programs.
Bottom line: You don’t want to hold any fund or bond that’s tied up in this toxic asset class.
Sovereign Society Quiz
Which of these “safe haven” investments is about to go bust?
A.) U.S. Treasuries
B.) Municipal Bonds
C.) Certificates of Deposit
D.) Money Market Funds
E.) All of the Above
Click above to vote and discover the shocking truth.
What Happens When 48 American ‘Enrons’ Go Bust?
(Beware July 1, 2010)
The key trigger date for suffering state budgets will be July 1st (tomorrow!). That’s the start of fiscal year 2011 – a flashpoint where the true nature of their toxic debt will become public.
Each passing week, their budget gaps will gape wider and wider.
And… as more and more cities (and eventually states) default on their debt, one sector in particular will take a direct hit.
We’ve laid out the full scenario, along with ticker symbols in a special research briefing for A-Letter readers. To grab your copy today, click here.
As the saying goes, forewarned is forearmed!
Careful out there,
Andrew Packer
Editor
The Sovereign Individual
P.S. Retreat to these 6 Ponzi-Proof investments right now. Your wealth could multiply 3-5 fold, even as millions of Americans watch their retirement accounts go up in smoke. Click here to learn how to save your retirement now!