The municipalities of America are going to default on their bonds, they will not be able to pay interest and pensions. If the Federal Reserve decides to bail out the municipalities of the states, then more U.S currency needs to be printed and this will further cause the de-valuation of the American dollar, not to mention that the deficit will increase again.
This will not bode well for the U.S Economy at all as there will be ripple effects. My personal take on all this supposed economic recovery that the U.S government and the media has been reporting is that it is all artificially inflated and the numbers on unemployment, manufacturing output and other figures have all been cooked for the last little while.
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