George Rebane
The dollar continues its quiet plunge. Porter Stansberry reports on today’s buzz in world financial circles that the US will soon lose its AAA debt rating, as Great Britain did two days ago. Bill Gross, world’s largest bond-fund manager, agrees and told Bloomberg that
… the U.S. will eventually lose its triple-A rating. Gross notes that the U.K. was downgraded last night, and the U.K. and U.S. “are similar in debt levels and debt trends.” Both countries have prospective deficits of 10% annually, “as far as the eye can see,” and those debts may approach 100% of GDP, “a level at which country downgrades tend to occur.”
(TLT is the iShares ETF that tracks 20-year treasuries; GLD is the gold bullion ETF)
Meanwhile in Nevada County – at the other end of the world’s financial axis – I attended the annual presentation to the county’s government and business leaders on the ‘state of the county’. This luncheon – excellent food BTW – is sponsored by the Nevada County Business Association, and today featured representatives from the four major jurisdictions – County, Truckee, Nevada City, and Grass Valley.
Hank Weston, Chairman of the Board of Supervisors, gave an overview of county finances noting that Sacramento, going under for the third time, will grab about $2.7M of sales tax revenues that would be remitted to the county. After the event I asked Hank about the sanctity of the county’s $19.5M reserve fund. (Compared to the rock apes in Sacramento, we have had a very prudent BoS these last six or seven years who salted away money during good times in anticipation of today. But since no good deed shall go unpunished, there seems to be little in the way of our state legislature reaching down and grabbing that money.) Supervisor Weston, however, felt that these funds would remain sacrosanct and he is not worried – the secured lenders to GM notwithstanding, who recently had American contract law erased for them without even so much as a sweep of a pen.
Mayor Mark Brown of Truckee also gave a very sanguine perspective of our jewel city of the Sierras. Yes, tax revenues and tourism are down, but the city is using this interval to gird its loins for the economy’s revival. No big problem.
Vice Mayor Reinette Senum gave an excellent, energetic, and hopeful picture of the doings in Nevada City, the county’s picturesque historical asset. While it is “cash strapped but resource rich”, the city is undertaking a number of projects, and using this time of ‘sturm und drang’ to “reinvent ourselves”. These inventions include solar power generators at city hall, Pioneer Park, and the city yard – and an even bigger one being contemplated for the old city airport property. The city will also compact organic waste and trade carbon credits from its 300 acres of forest for additional revenues. Reinette urged all of us to work together, pointing out that “no ship sinks halfway, we’re all in it together.” Vintage Nevada City – we expected nothing less.
Mayor Lisa Swarthout of Grass Valley painted a somber but level-headed picture of Grass Valley’s fortunes. The city – forgetting that it has no printing press – has managed to get itself into a $2.2M deficit over the last two years. Its sales and property tax revenues are down, and there is really nothing to pull it out of its fiscal nosedive save wads of stimulus cash from the good folks in Ohio (with short detour through Wash DC). Nevertheless, the city has a paddle of sorts in the water. It successfully sued the bejeezus out of Newmont Mining after the city inadvertently punctured one of the water filled old mine tunnels that lace the underpinnings of western Nevada County. Don’t ask how our courts found the company that recently bought the mining property guilty of water-filled tunnels dug more than a hundred years ago.
“What kind of a day was it? A day like all days, full of events that alter and illuminate our time, and you are there.” Actually, today Russ Steele and I were there enjoying the show; he’ll probably also post something on NC MediaWatch about all this.
[update] CABPRO Report has an excellent post on Spain’s experience that each newly created ‘green job’ killed 2.2 other jobs. Nevada County seems hell bent in getting on this green bandwagon, apparently with the hope that any jobs we get will only eliminate other jobs in Ohio. For a real snootfull on this, also google ‘green jobs kill jobs, Spain’.
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