Wednesday, July 08, 2009
The story of California's budget crisis and the issuance of, what is likely to be, a steady stream of IOUs totaling billions of dollars should produce all sorts of interesting subplots, the first and most obvious one being that a secondary market is now developing.
Apparently, legislators will soon pass a law to make the IOUs "legal tender" in California so they can be used to make payments to the state for such things as taxes and DMV fees, both of which have been rising. All of this effectively creates a new currency in the Golden State and, after a few more days of active trading on Craigslist and eBay, it should be interesting to see how large a discount is applied to the IOUs relative to the U.S. dollar.
This just in... A new website that is truly a sign of the times: Buy My IOU.com.