The Canary In The Coalmine, Muni's Tanking.

Muni bonds, unfortunately, are the backbone of local and state funding of projects like schools, hospitals, parks, etc..

When the news reports outflows from muni bonds, that means cities are unable to borrow money to fund these projects.

People might say, well, just put the projects off for a while. The problem with that, is that cities are so broke and in debt, they are issuing bonds, to pay for the bonds (debt) they already have, sorta like getting a credit card to pay off your credit card…

This is why the Federal Reserve has been pumping $85 billion a month into the bond market, to hide this fact from the American public..

U.S. municipal bond funds reported $1.2 billion of net outflows in the week ended July 10, up from $870.4 million of net outflows during the previous week, according to data released by Lipper on Thursday.

The four-week moving average remained negative at $2.2 billion, said Lipper, a unit of Thomson Reuters.

The funds, which are popular with individual investors, have reported net outflows for seven-straight weeks, including a record-high outflow of $4.53 billion the week of June 26.

http://www.reuters.com/article/2013/07/11/lipper-muni-funds-idUSL1N0FH24H20130711

Property taxes generally are meant to fund projects like schools and hospitals and water treatment facilities, but some time ago, the govt employees couldn’t balance the books, so they started borrowing from rich investors using bonds, which takes property taxes from the middle class and put money in the hands of the rich through interest on the bonds.

But that wasn’t enough for the greedy govt employees, so they started gambling with city funds in overnight bets in the financial markets with the aid of banks..

A BMA swap is an interest rate swap in which the payments of one leg are variable and are based upon fixings of the US SIFMA Municipal Swap Index (formerly the BMA Municipal Swap Index or “BMA Index”). This index is produced weekly, reflecting the average rate of issues of tax-exempt variable-rate debt, and serves as a benchmark floating rate in municipal swap transactions. The BMA index is usually 65%-70% of its taxable equivalent 1-month LIBOR.

http://www.fincad.com/derivatives-resources/wiki/tax-exempt-swap-curve.aspx

The obvious problem is the London controls the LIBOR rate, which we have found out lately was being manipulated by the bankers to remain low, causing the American taxpayers billions, if not trillions of dollars through the greed of city and county and state govt employees, who take the kickbacks from the banks and keep them for themselves.

London is happy with this result, because they are trying to tank the American economy and force us into the Commonwealth, headed by the British Crown..

Americans had better wake up, or we will be forced to bow to the British Crown soon…and the revolution and the war of 1812 will have been fought for naught.