In it, we name the 11 states and 26 muni bond issuers most likely to default.
We give you three investments you can buy immediately to profit directly from the crisis.
And we warn you of the sequence of events likely to unfold as this great government debt crisis accelerates — not only at the state and local level across America, but also in Washington.
Look. This debt crisis is no longer just a far-away problem striking countries on the other side of the Atlantic. Nor is it a far-flung forecast of some future event. It is hitting right here in the U.S. and doing so NOW. We have:
- Up to 100 major cities now likely to go bust THIS YEAR — plus, thousands of smaller cities, counties and state governments also in danger of failure, PLUS …
- A federal government that’s literally drowning in red ink of nearly $1.5 trillion — its largest budget deficit of all time, according to the Congressional Budget Office.
When the first dominoes fall in the municipal bond market, it’s virtually certain to devastate bonds of all kinds, whether local or federal, corporate or government.
Medium- and long-term bond prices, which have already been declining for months, could enter free-fall. Interest rates would likely skyrocket — the kiss of death for state and local governments that otherwise might survive but can’t afford higher borrowing costs.
Needless to say, such a mass extinction event among our cities and states would almost surely hammer the economy … end the recent stock market rally … and erase trillions of dollars of investors’ wealth.
And sure enough, all last week, the headlines proved every warning we’ve given you to be prescient.
- In Iowa, for instance, governor Terry Branstad just warned that 1,500 state workers could lose their jobs — and this comes even after more than 2,000 employees accepted a state offer to quit their jobs early.
- A state we hadn’t heard from before so far in this crisis — Kansas — announced that it’s planning to cut millions out of the state’s special education budget.
- In South Carolina, Governor Nikki Haley announced spending cuts that could eliminate several state agencies.
- Even the notoriously slow-to-react ratings agencies are beginning to echo our warnings: Moody’s is now factoring in the states’ multi-billion-dollar pension shortfalls when issuing credit ratings — a move that will almost surely result in mass ratings downgrades.
Meanwhile …
- In Washington, Republican leader Paul Ryan warned the nation is on course for an economic disaster thanks to its crushing burden of debt.
- House Majority Leader Eric Cantor ruled out any congressionally authorized bailouts for states. “There will not be a federal bailout of the states,” he vowed.
- The International Herald Tribune warned that the chaos we’re seeing in Europe as a result of its sovereign debt crisis is likely to come to U.S. shores soon.
- Even renowned Nobel-prize-winning economist Joseph E. Stiglitz predicted “a series of rolling crises for an extended period of time” as one government entity after another succumbs to this great debt catastrophe.
Make no mistake: If 2008 went down in history as the greatest private sector debt crisis of all time (according to just-revealed comments by Alan Greenspan), then …
The year 2011 could go down in history as one of the greatest GOVERNMENT debt crises of all time.
Good luck and God bless!
Martin
Dr. Weiss founded Weiss Research in 1971 and has dedicated his entire career to helping millions of average investors find truly safe havens and investments. He is Chairman of the Weiss Group, which includes Weiss Research and Weiss Ratings, the nation’s leading independent rating agency accepting no fees from rated companies. His last three books have all been New York Times Bestsellers and his most recent title is The Ultimate Money Guide for Bubbles, Busts, Recession and Depression.
