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Home Alternative News News The City of Prichard Filed For Bankruptcy

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Quick Overview At Us Financial Meltdown:

 

A quick look shows that nearly $800 billion dollars that should be in checking accounts is missing in action.


Money, supposedly available on demand, is just not there.



Given there are no reserves on savings accounts, as much as $4.5 trillion people think is in their savings accounts is not there either. Moreover, the duration mismatch on savings accounts, sweeps, and likely even CDs is massive. If even 20% of the people tried to get their money out the system would freeze up. The banking system is clearly insolvent. Such is the folly of fractional reserve lending.

The U.S. national debt is crossing $12 trillion - about $40,000 for each citizen - and doesn't include other future financial obligations, like Social Security and government-sponsored health care under Obama's rule. Analysts estimate that these future obligations could cost the United States up to $100 trillion! With an exploding budget deficit and thinning credit, the federal government will be forced to create a plethora of new U.S. dollars to help finance the country and repay debt. We all know the world is beginning to doubt the US dollar. We've all heard the rumours of talks amongst powerful nations to remove the US dollar as the main currency for trading oil. We know inflation will eventually follow. But there is shocking proof that even the US is beginning to doubt the Dollar. Hidden from the media over the past few weeks, the U.S. Treasury has been liquidating billions of U.S. dollars and trading it for a special currency you may have NEVER heard of - the same currency that China, Russia, oil-bearing Gulf countries, the UN, the IMF (International Monetary Fund), the World Bank, and many others have already suggested to replace the greenback as the world's main reserve currency. It's called the Special Drawing Rights (SDR). The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries' official reserves. Its value is based on a basket of four key international currencies (currently the U.S. dollar, Euro, Japanese Yen, and the British pound), and SDRs can be exchanged for freely usable currencies. General SDR allocation took effect on August 28, 2009 and a special allocation took place on September 9, 2009, which increased the amount of SDRs from SDR 21.4 billion to SDR 204.1 billion (currently equivalent to about $317 billion). And guess who took a large chunk of that? Current SDR holdings in the U.S. Treasury now account for nearly 30% of the U.S. total foreign currency reserves.




The City of Prichard (Alabama) Filed For Bankruptcy


The City of Prichard has filed for Chapter 9 bankruptcy protection for the second time in 10 years.


Retired city workers aren't the only ones waiting for checks from Prichard. The city owes nearly $700,000 to creditors holding 20 of the largest unsecured claims, according to a bankruptcy court document filed Wednesday. The city's bankruptcy attorney, Scott Williams, also filed documents that stated the city's revenues for fiscal year 2009 were about $10.1 million, while its operating expenses were about $10.7 million.

The city of Prichard filed for bankruptcy Tuesday in an attempt to cope with the debt created by fighting lawsuits and addressing the demands of unpaid and agitated retired city employees.


The Chapter 9 filing marks the second time in a decade that the city declared it was out of money.

Mayor Ron Davis, who just two years ago helped the city pay off its creditors from the 1999 bankruptcy, blamed the latest financial crisis in part on a flawed municipal pension plan.

The filing came a day before Davis and the city Finance Director Rex Williams were slated to be deposed by attorneys representing the pensioners in a lawsuit filed in August.


With the filing, that testimony will be put on hold, along with any other litigation pending against the city.

"After careful review of all of our options, bankruptcy protection seems to be the only solution left at this time," Davis said in a statement released Tuesday afternoon.

"Over the past 50 years, the pension plan was amended by the Legislature more than fifteen times, and always the economic burden on the City was increased. This has been a long-term problem that was unfortunately inherited by this administration.


"After several lawsuits filed by pensioners, it has forced us to come to this decision, one that will protect the city and its residents," Davis' statement added.

Robert Hedge, a lawyer for the pensioners, said he saw the filing as a delaying tactic.

He said he had planned to ask Davis and Williams about roughly $700,000 that Williams said was left in the city's reserve fund.


Chapter 9 bankruptcy allows financially troubled municipalities to reorganize debts without the threat of creditors.


"This is not going to stop us from pursuing litigation," Hedge said. "If anything, it's going to make me more determined."


The pensioners did not receive their October checks, which equate to a total of about $150,000, and Hedge said he did not expect they would receive payments in November.


Scott Williams, a Birmingham attorney representing Prichard, filed the claim Tuesday afternoon, acknowledged the deposition and said that he filed for bankruptcy Tuesday because it "was the day that seemed to make the most sense."