by Kathleen Rogers

The state of California may soon issue IOUs to its business vendors, students awaiting financial aid payments, and taxpayers expecting refund checks. When I first read this story, I had to check the calendar – was it April 1? No, this April Fool’s joke is exactly three months late. I am reminded of my childhood, playing the Game of Life with friends, occasionally resorting to using those last-resort Promissory Notes, which even we kids knew could end up worthless.

The state has not made clear when it might make good on these notes, whether or how much interest they might pay, etc. Even the threat of the issuance of promissory notes spells out just how dire California’s financial situation now is. It seems the “Golden State” may have entered its “Golden Years,” at least in terms of its financial vigor.

And yet another large entity is apparently strapped for cash. For the first time ever, the International Monetary Fund announced it would issue $500 million in bonds to help it finance its underfunded programs abroad. China, the largest buyer of our debt, has already committed to purchase $50 billion of these IMF bonds. Russia, Brazil and several other IMF member countries are also expected to participate.

But....

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