Sedona AZ (May 25, 2013) – by J. Rick Normand, Financial Columnist to the SedonaEye.com, writes an Open Letter to Sedona Council and Financial Staff:
Below mentioned is the way it’s going down! Too bad you’re not putting money into reserves. And, of course, you will all believe I am wrong – until I can say “I told you so!”
J. Rick Normand
These are the all-important agenda items up for Council discussion and vote on Tuesday, May 28, 2013:
- 9. b. AB 1586 Discussion/possible action regarding a request from the Sedona Arts and Culture Collaborative (SACC) for $20,000 in funding for destination marketing activities to promote Sedona as a center for arts and culture education (this is a beneficial adjunct to the Chamber money request per 9.c. AB 1592 below)
- 9. c. AB 1592 request from the Chamber of Commerce for $80,000 in destination marketing funds to be used by the Chamber of Commerce and the Tourism Bureau. CLICK on 9c AB 1502 CM on left for packet info.
- 9. d. AB 1601 possible purchase of vacant property adjacent to City Hall, located at 20 Roadrunner Drive and further identified as Assessor’s parcel Number 408-12-117 FOR $369,000 or less subject to negotiation…71 acres – with no existing driveway connection to Roadrunner Drive or SR89A. The property is approximately 4 to 5 feet below the grade of City Hall and would not allow a seamless transition for an expanded parking area; therefore some type of ramping or structure would be necessary to connect the two properties.
- 9. e. AB 1604 approval of the tentative City budget for fiscal year 2013-2014 of $36,222,739
So, we are faced with yet more Council spending, in the face of declining revenues, as if there were no tomorrow. Notwithstanding, I’m willing to bet that all the readers who are reading this Open Letter can guess, with absolute certitude, which way this vote will go. The vote will be just a perfunctory.
Go figure! And, what’s more, Council will do it without even a single minute of consideration for the following:
The U.S. Treasury Bond market…is a bubble waiting to burst. Same with the Japanese Bond market and most of the sovereign Euro Bond market. The U.S. government pays for net expenses above tax revenues by borrowing. To borrow money, the Department of the Treasury sells bonds. This is an important aspect of our current form of government, as voters have demanded far more government expenditures than they are willing or able to pay for via taxes. In this aspect, the Treasury Bond is a tool of fiscal policy, or spending, and cash flow to pay for it.
There is another aspect to the Treasury Bond. It is the key asset of our monetary system. It is the asset on the Fed’s balance sheet (increasingly, post 2008, there are also mortgage bonds) to back its liabilities. The liability of the Fed is the Federal Reserve Note, commonly called the “dollar.” The Treasury Bond is also a significant backing for the liabilities of commercial banks, pension funds, annuities, retirement plans, and insurance funds. Finally, the Treasury Bond is used as collateral to enable borrowing.
The monetary system today is entirely based on credit, and the Treasury Bond is the base of it. The peculiar characteristic, one could even say the shabby little secret, is that the Treasury Bond is payable in dollars but the dollar is the liability of the Fed which is backed by the asset of the Fed which is … the Treasury Bond. It’s circular and self-referential much like a “one pea, three shell game.”
European Union
People often use the shorthand of saying that the Fed is “printing” dollars. What it is actually doing to create dollars is borrowing them into existence and lending them to the U.S. Treasury or funding them to fractional reserve big Wall Street banks. It is a truism that there is no actual lender. The Fed has sole discretion to create these dollars, unlike any normal bank, that must persuade a saver to deposit his capital into the bank. The Fed’s expansion of credit involves no saver. The Fed’s credit is utterly counterfeit.
The dollars appear ex nihilo at the Fed, and they use them to buy an asset, basically a bond, or to otherwise lend them, at virtually no interest rate, to a Too-Big-T0-Fail Wall Street Bank so that the Fed creates both a liability and an asset in this process. If the value of its assets should ever fall significantly, the U.S. Bond market will not accept the Fed’s liability –known as the dollar — at face value.
The discounted price to savvy, bottom-dwelling, distressed asset investors will be excruciating to American bond holders who were forced to liquidate their bond portfolio. Worse yet, when gold, silver, commercial grain and commercial oil owners refuse to bid on dollar denominated paper assets, the dollar will collapse, resulting in hyperinflation that will destroy the savings of most all baby-boomers who were smart enough NOT to put their retirement savings into Treasury Bonds.
Lose, lose…no winners! That is, unless you can read between the lines.
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(Worse yet, when gold, silver, commercial grain and commercial oil owners refuse to bid on dollar denominated paper assets, the dollar will collapse)
There’s no other paper in the world with the circulation or the complex global economic distribution network/driver of the dollar & governments will never let it collapse unless they can institute a new system. look at the EU for the insanity of that. To have the dollar/euro/other currencies fail would require something in its place of equal value everywhere in scope. I said EVERYWHERE. Why bother? There’s no global incentive to do this. The dollar IS paper. It has no meaning except what governments give it even now because it is counterfeit and hypothetical, the dollar has no meaning. But now who cares? Rethink assumptions, leave out the absurd. Agree with much of what you write, do read your articles with interest. Any chance that the dollar slayers on the council are reading and learning?
Thank you Alan,
As to your last sentence…no chance whatsoever. Reading, yes, learning, no way.
When you say “no other paper in the world,” “…governments will never let it collapse…”, and “There’s no global incentive to do this…,” you’re actually making reference to the dollar’s world reserve currency status as it has always enjoyed since Bretton-Woods in 1944. But, until now, the economic world was constituted only by western nations. Those days are about to pass.
Ever hear of the BRIC(S) nations? They are not part of the western world dominated central banking system. I’m talking about the economic alliance of Brazil, Russia, India, China and South Africa, and their soon-to-be new allies, namely, South Korea, the Arab oil states, Indonesia, and I predict, Germany. They do have an incentive to trash the dollar and they are well along into their plan to unleash an alternative to the dollar and to do it soon.
Have you noticed the bi-lateral yuan-based trade agreements between all these nations yet? Have you noticed the incredible new electronic stock, bond and, especially, the commodities exchanges in Asia that are sucking the life out of COMEX, for example.
Shortly, you will see the earth-shattering emergence of a new gold-backed yuan bond to compete for world dominance over our Treasury Bond market. When they take down our bond market, they will take down the dollar and the time is close. Wall Street knows this and is preparing for it. Meanwhile, the dollar will have one last hurrah (rising in value) as other western currencies become suspect. That event is known as a”blow-off top” which always precedes a collapse. Give it a couple years.
city county and state politicians are tax and spend bureaucrats with no eye for redundancy
voter fools give fools in office the right to do anything they want
Richard W is so correct! “Our” City Council doesn’t give a blip (#Z*^#@$% – translation = Damn) about their citizens and costs to all of us. Wish you would all go to the city site for their “Special” meeting dated 5/29 at 3:00 and watch their pony show regarding Commissions. Unreal! Call me crazy but didn’t they just give away their elected authority to hired folks and they can look all of us in the face telling us they represent our wishes?
Hum, not feeling the love.
The ‘more taxes’ Form Letter the Lodging Council is getting business owners and their employees to sign is copied below [caps replace the letter’s underlines]. The address for returning signed letters: 45 Sunset Drive, i.e., the Chamber of Commerce.
Dear Mayor and City Council,
My business depends on a strong and healthy tourism industry in Sedona. The quality and quantity of visitors to Sedona is paramount to my livelihood, the livelihood of my employees, and the overall success of my business. It is imperative that Sedona remain competitive in the global tourism industry and, in order to do so we must invest in destination marketing, sales, public relations and product development to position Sedona as a premier travel destination.
For that reason, I support the Sedona Lodging Council’s proposal to INCREASE THE CITY SALES TAX BY .5% AND TO INCREASE THE BED TAX BY .5%. My support is contingent on the dedication of 45% of the total bed tax collections to be allocated to the City’s Official Destination Marketing Organization for marketing, 15% dedicated to visitor center management and 20% be allocated for tourism product development for as long as this tax is in place. Furthermore, a significant portion of funds generated from the .5% sales tax should be allocated at the City’s discretion for priority capital improvement projects.
While I don’t particularly care for the idea of increased taxes, I realize that the timing is right and the current situation is a win-win scenario:
WIN FOR THE CITY: As reported by city staff, in approximately 3 years there will be no funding available for capital improvement projects. This additional revenue will generate the needed funds to be used at the discretion of City Council for priority capital projects. The City will also benefit from the additional incremental revenue generated by increased visitor spending, a result of effective marketing efforts conducted by the Chamber of Commerce.
WIN FOR THE SEDONA RESIDENTS: The residents will see a .5% decrease in overall sales tax since the 1% state sales tax will be removed on May 31. The residents will also benefit from the additional funds allocated to capital projects such as improved drainage, sidewalks, roads etc. In addition, there will be more revenue to the general fund based on increased visitor spending. The increases to the general fund will help enhance city services and help fund parks, street maintenance, police services, and overall enhances the quality of life and services to our residents.
WIN FOR THE BUSINESS COMMUNITY: The business community wins from the increased allocation to tourism marketing which will lead to additional visitor spending, more jobs, and the creation of a vibrant, competitive tourism destination.
WIN FOR SEDONA VISITORS: Additional funds allocated to destination marketing will lead to new and enhanced visitor services, products, activities and attractions. A satisfied visitor will spend more money, return and possibly relocate to Sedona.
PLEASE COUNT ON MY SUPPORT FOR THE .5% CITY SALES TAX AND THE .5% BED TAX INCREASE based on the City’s commitment to dedicate 60% of the total bed tax collections to the City’s Official Destination Marketing Organization and 20% be allocated for tourism product development.
Print Name:____________________ Title:_____________________
Business Name:_________________ Number of Employees:_______
City of residence:________________ Business location (city):______
reading paper that pinal county’s being sued by gov’t regulators because its sewage pond water was partially treated…time for local mayor and council to tell what kind of insurance the city has if the government comes after them if the sewage water isn’t up to par in the ponds? (b sec/az republic/today) what kind of assurance does the city offer if private citizens sue because their dog or kid or self gets sick after being by the ponds on a picnic for no other reason than they can?
there is a need to know because pinal is getting hit with violations and they’ve got a better system than sedona
Public announcement posting:
On June 11, 2013 at 8:00 a.m. in the Wayside Chapel’s Jordan Hall, (uptown) the City of Sedona in conjunction with Peak Engineering will facilitate the second of three public meetings regarding the repaving of 89A in Uptown and other possible future improvements.
Design concepts for pedestrian improvements along Schnebly Road, Forest Road and Mesquite Avenue; a concept striping plan for parking along Highway 89A; and a striping with bike lane configuration on Jordan Road will be presented. The concepts are based on many of the ideas heard at the first public meeting held on May 9, 2013.
The intent is to discuss opportunities and constraints for the proposed concepts and to solicit feedback on the concepts from the business community. We will also estimate total project cost for each area for preliminary reactions and budgeting purposes.
For questions, please contact Karen Daines at 928-203-5067 or at kdaines@SedonaAZ.gov.
“Real time is true;
redundancy that’s happening now.
Remember those swaths of time between high holy seasons:
Ordinary time.
Nothing dramatic is happening;
this is where we’re living.”
via Facebook.
Witnessing a historical moment right now. The polls just closed here. No bailout. Time for Greece to exit the euro zone!! Everyone is celebrating and crying. Old and young. It’s a long road ahead of them but as of tonight they can enjoy the moment.