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Portugal Considers Paying Public Workers In Treasury Bills Instead Of Cash

Tyler Durden's picture


As reported late on Friday, just as the market closed, the Portuguese constitutional court decided that several provisions of the country's 2013 budget were not constitutional. According to the high court, cuts in wages and pensions of public employees were unfair (there's that word again) because they targeted only the public sector. The court rejected plans to cut one of the 14 paychecks that public workers usually get each year and to slash 6.4% from pensions for retirees.  This coincided with the government warning that the court's decision would put into question the country's ability to fulfill its €78 billion international bailout program, which in turn would send bondholders of Portuguese sovereign debt scrambling for the exits as suddenly the country may find itself in the ECB's "dunce" corner, with Draghi preparing to pull a "Berlusconi" on a government which can't even whip its judicial branch in line. However, of more immediate concern is how will the government now plug a hole of up to €1.3 billion in its €5.3 billion 2013 budget. A solution has, luckily, presented itself: bypass the unconstitutional provisions by paying government workers not in cash, but in government bills!

From the WSJ:

The Portuguese government is considering a plan to pay public workers and pensioners one month of their salary in treasury bills rather than cash after a high court ruled out wage cuts, a person familiar with the situation said Sunday.


"This is one of the ideas being considered," the person said.


By paying one month of salary in T-bills to public workers and pensioners, the government would save an estimated €1.1 billion in expenses, narrowing the budget gap significantly.

Incidentally, this plan makes perfect sense: with every central bank openly monetizing its debt, it has effectively made debt and cash equivalent.

Now if only Portuguese public workers had access to the same shadow transformation pathways and government bond repo collateralization opportunities afforded to the big banks, then every bill thus obtained would be able to serve as a source of nearly infinite rehypothecation potential, and thus, a DIY fractional reserve banking system provided to every individual.

Coming next: the full convertibility of Spanish Spiderman towels backed by the full faith and credit of the Rajoy kickback scandal, and fully convertible into chorizo.

All joking aside, the fact that this absurd option is even being contemplated shows just how deep into the rabbit hole event horizon the modern completely insolvent financial system has traversed. 


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Sun, 04/07/2013 - 12:22 | 3418533 Abraxas
Abraxas's picture

It's as good as money. Honest.

Sun, 04/07/2013 - 12:26 | 3418550 swissaustrian
swissaustrian's picture

And so another country is forced to search for alternatives to the Euro. First Cyprus created a defacto B-grade Euro, now Portugal pays bureaucrats in bills.

Slowmotion dissolution of the EMU, bitchez!

Sun, 04/07/2013 - 12:30 | 3418568 nmewn
nmewn's picture

Of course the judges & court system (being public workers and all) will now get paid in worthless government scrip too? ;-)

Sun, 04/07/2013 - 12:49 | 3418608 Atlas_shrugging
Atlas_shrugging's picture

What's wrong with this idea?  I save thousands each and every year simply by using my AMEX instead of cash.  Any knucklehead could have figured this out.

Sun, 04/07/2013 - 13:19 | 3418709 kaiserhoff
kaiserhoff's picture

I like it.

Flip them a can of soup and some soda crackers now and then.

Let them see how the other half lives.

Sun, 04/07/2013 - 14:28 | 3418886 Sudden Debt
Sudden Debt's picture

Kruger would be so proud.
When you go into debt, you're actually saving money....
I don't think I'm going to teach that to my kids...

Today we had some friends over and we where talking about everything and also personal finances for the future.
They asked how much we had... and they just didn't believe it!
The pure fact that people can and do save money was totally unbelievable to them!
As it turned out... they just didn't have anything. They even told me they just took another loan just to go on vacation this summer... a loan... to go on vacation... how nuts is that...
People take loans... take extensions on that loan and so on... they just pay the interest...
He told me that they paid "only" 400 euro a month on interest... no mention of actually downpaying the loan. 400 IN INTEREST!!! WTF!!!
And than they have there loan for the house... and still... they keep 3 cars. 2 Beemers and a Land rover! And they're actually broke!
These people just live for the show!
And when the day comes that they reach their debtceiling... it's over... dbet slaves just for the interest...

Sun, 04/07/2013 - 16:55 | 3419367 Auntie Lo
Auntie Lo's picture

I also know folks who borrow for everything. They also take out enough life insurance on each of them to pay off all the debt. The survivor wins! as long as nothing happens in the interim.

Sun, 04/07/2013 - 18:58 | 3419887 StychoKiller
StychoKiller's picture

Man, I hope you also told them how many gunz you have to protect all of that...

Mon, 04/08/2013 - 02:35 | 3420948 Sudden Debt
Sudden Debt's picture

I don't tell to everybody I store it in PM's :)

I just told them the euro value like it was cash in the bank.


Mon, 04/08/2013 - 02:56 | 3420961 CheapBastard
CheapBastard's picture

Good points, SD. When I look around I see most people buying (or living in ) zero down houses, driving zero down cars, with zero retirement plans and zero savings using their credit cards to buy stuff they don't need.


It's no wonder EBT'ers, medicaid'ers, Section 8'ers and free cell phone users are the fastest growing section of our nation.

Sun, 04/07/2013 - 12:57 | 3418637 disabledvet
disabledvet's picture

this is what California did for a spell...and unfortunately this piece is not looking at the plumbing here so it's missing "the Inside Game" to the "so called joke." California was FORCED to stop paying its employees in IOU's because Bank America refused to accept it as legal tender. "so now we have this novel approach." using Government debt itself as a paycheck. hmmm. first off "never underestimate man's ingenuity at getting around paying cold hard cash." goes to show you how valuable that "hypinflated asset" is actually. second though there is a not so philosophical question here of "what is debt" that is being put forth...both here on this blog and in Portugal. If you say "really cheap money" you are WRONG. This is very EXPENSIVE money...depending on the form and manner in which it is done. my first thought is "can this debt be traced?" (they were called "bearer bonds" back in the 80's...long since illegal unfortunately.) if this paycheck is untraceable then you have one BIG UP on cash money. it's a "lien" as it were vis a vis the Government as well. Portugal has a MASSIVE amount of gold reserves. "is that part of the lien?" comes to mind. and can Portugal print their own euro's? or better Portugal about to leave the euro and introduce convertibility to their money? with Swiss banking laws no shredded it seems to me the "coast is clear" (so to speak) for "someplace in Western Europe where capital is NOT stolen." If such an action has the backing of the Spanish Government then "tiny little Portugal" indeed could be the Mouse that Roars. "the rules of the Game have been set" courtesy of Cyprus. "economics as war by other means" seems to be the plan. PAYING in debt seems a rather interesting choice. Doesn't paying people in your debt say "they have an awful lot of confidence the value of their debt"? stay tuned...

Sun, 04/07/2013 - 15:34 | 3419110 thisandthat
thisandthat's picture

You're deluded about Portuguese gold; first, it's in the US, which means it probably doesn't exist any more...; second, it wouldn't do jack shit - it's 382 tons, not 5000, so it couldn't even pay 10% of the debt...

Sun, 04/07/2013 - 19:02 | 3419903 StychoKiller
StychoKiller's picture

Hmm, if Au goes to $50,000/Toz, what then?

Mon, 04/08/2013 - 02:32 | 3420945 thisandthat
thisandthat's picture

I'll grin :)

Mon, 04/08/2013 - 13:50 | 3422625 auric1234
auric1234's picture

Just divide total amount of fiat/debt by total amount of gold, then reprice gold appropiately and pay the debt by all the gold in vault.

Redenomination, bitchez.


Sun, 04/07/2013 - 19:00 | 3419897 StychoKiller
StychoKiller's picture

Euroz == FIAT munny, Govt Bills == ?  I fail to see the difference for the Portugese.

Sun, 04/07/2013 - 12:39 | 3418601 max2205
max2205's picture

Next is payment in the form of toenails

Sun, 04/07/2013 - 13:27 | 3418727 paddy0761
paddy0761's picture

the Dude abides.

Sun, 04/07/2013 - 14:21 | 3418872 knukles
knukles's picture

I already tried that once.
It didn't work.
Then I got into rehab...

Sun, 04/07/2013 - 15:18 | 3419059 Iconoclast
Iconoclast's picture

I'd disagree, the euro is as 'strong' as the usd, gbp, jpy, point of fact the euro could afford a bernanke style shredding causing it to rank parity with the dollar and still be circa 20% above its low and give a great assist to exports. Many currencies and central banks are in a race to the bottom in mutually assured destruction, the EU zone is no 'special case'.

Sun, 04/07/2013 - 22:57 | 3420633 monkeyshine
monkeyshine's picture

But it seems there is a special case - government workers. Be they in the EU, or California where one civil servant is set to retire with well over $400,000 in annual retirement benefits for life.  What kind of court finds a ruling unconstitutional because it is "unfair"?  How is fair constitutionally protected?  If it is not fair to cut paychecks of government workers, then it must also not be fair to cut government services to the public.  Would not then public strikes be illegal by the same logic? Where is our resident scholar in the Portugese Constitution to help sort this out?

Sun, 04/07/2013 - 12:30 | 3418561 Banksters
Banksters's picture

Rehn: big bank depositors could bear cost of bank failure The collapse continues.   Perhaps the masses will get it when their labor is rewarded with used toilet paper. I'm not holding my breath, though.

Sun, 04/07/2013 - 12:32 | 3418573 cossack55
cossack55's picture

With all that used TP around you may wish to consider holding your breath.

Sun, 04/07/2013 - 12:29 | 3418564 cossack55
cossack55's picture

So.....this means I can pay a credit card bill with a bill from a different card?  Can I pay my mortgage with my car payment coupon?  I like this and nothing can go wrong.

Sun, 04/07/2013 - 14:03 | 3418815 cosmictrainwreck
cosmictrainwreck's picture

kinda like Fed buying UST? (well, almost) I don't see where fundamentally US is any healthier - just not as visible

Sun, 04/07/2013 - 16:44 | 3419328 Sudden Debt
Sudden Debt's picture

yep, and when they send you a forclosure note... well... you can finally retire in style...

Sun, 04/07/2013 - 12:30 | 3418566 Arisu
Arisu's picture

Nicholas Andre: What is this? What is this? Where's all the money?
Lloyd: That's as good as money, sir. Those are I.O.U.'s. Go ahead and add it up, every cent's accounted for. Look, see this? That's a car. 275 thou. Might wanna hang onto that one.

Sun, 04/07/2013 - 17:12 | 3419412 mind_imminst
mind_imminst's picture

Awesome quote Arisu. I always use that scene when I explain to someone how th US Social Security system works.

Sun, 04/07/2013 - 12:44 | 3418597 Kaiser Sousa
Kaiser Sousa's picture

the time is fast approaching when i for reasons outlined in the following from Sinclair will have to leave this community... although i take issue with his insistance on predicting $3500 a oz for Gold along a undefined timeline, and his inablitity to acknowledge Silver as the undisputed other form of real money, i share this with you all cause i believe u know what he, and i know is cleary right around the corner....cheers and forgive me for hijacking to a degree the comment section..

"1. The operation to depress the gold price since the high was limited in time and is now behind us in terms of maximum pain for the bulls.

2. You must exit the system immediately because the Financial Nazis struck in Cyprus and now are moving directly towards you. This is simple fact, which if you ignore will be akin to the rise of the Nazis in Germany for those that knew they should, but never made the decision to leave that system.

The saddest fact is that many of you have thrown away your gold share and bullion insurances to the enriched Bankster bullies. You will now pay no attention to the need to exit the system. It is as if you are moths attracted to the flame of danger, and a sloth in that you are too lazy to take the actions required to protect yourselves. If you do not pay attention to this interview you are going to sacrifice all you have worked to accomplish in your lives. Most certainly those that are planning any form of retirement are right now dancing on the head of a needle.

Here are a few most important actions you, in my opinion, must take.

Government sponsored retirement tax preferential retirement programs must realize that one of the IMF plans in Cyprus was to nationalize all retirement programs. That means steal your retirement funds and assets, replacing them with some form of future paper assuming Cyprus returns to solvency.

You must, in my opinion, face whatever tax consequences there are and close your retirement programs. You are in clear and present danger of confiscation for questionable paper of whatever you hold in these type accounts. In a financial sense you are exactly what the ghettos in Germany and Poland were when they knew they should run but found any excuse possible not to do what was logically screaming at them to take action.

I am screaming at you from every pulpit I can find, with no personal benefit that you must take various actions and take them now. The fact the IMF, a major international body, had the audacity to demand that Cyprus nationalize all it pensioners and confiscate large percentages of the account values should be like a flashbulb going off in your eye to wake you from your sheeple slumber.

Bite the bullet. 
Pay the tax. 
Get your assets back. 
Get out of the system.

The next action you must take is to get as far away from social media, and the use of credit cards for everything because you are painting a picture for the tax collectors that are going to go ballistic in their effort to collect your money from you in order to create revenue for governments going broke, or who are already hiding the fact they are broke.

It might take some effort, but stop your kids from informing the world of everything you and they have done on their social media. Computer based comparisons of family income to family activities will spur punitive audits when the apparent expenses are greater than the combined declared income.

The revenues services of every country are cranking up their computer search programs to grab information. You must stop so freely providing information, and maybe bragging on social media to make others think your lives are better than they really are. You must turn off the switch on your children use of social media if they are still under your authority. You must suggest to your emancipated children that they are foolish in informing the world of every little thing that do in search of 1000 friends on social media that would not really give a damn if they had a problem.

As an example of the new high tech snoops you are feeding with your credit cards and social media, research the following article.

IRS High-Tech Tools Track Your Digital Footprints – Yahoo! Finance

– Charting and analyzing social media such as Facebook 
– Targeting audits by matching tax filings to social media or electronic payments 
– Tracking individual Internet addresses and emailing patterns 
– Sorting data in 32,000 categories of metadata and 1 million unique "attributes" 
– Machine learning across "neural" networks 
– Statistical and agent-based modeling 
– Relationship analysis based on Social Security numbers and other personal identifiers

Click here to read the full article…

You must eliminate to the greatest degree possible all the agents between you and your assets.

There is no question that leaving assets in street name with your brokers and bankers is a financial death wish. The preferred way of holding shares of stocks has always been in your own name as physical certificates. The second best method, but much better than street name, is to hold your shares in Direct Registration. Do not expect your banks, brokers or companies you are invested in to make it easy to get out of their system. They will fight you all the way, but you have to insist on your rights regardless of their refusal or false dire warning of negative circumstances when you succeed in demanding your rights. Most of it exaggerations of what is really minutia when it comes to protecting yourselves.

Large credit balances in the form of banking accounts in CDs or in pure cash is now holding up a red blanket for the fighting confection bull of governments seeking your assets to hold off their financial collapse from their own spending sins of decades.

We can discuss in open forum, face to face or in writing later what to do with your assets but right now, as Braveheart cried, they must have FREEDOM from the system. There is much more that needs to be done, but what you have here is what should be called first priority. This should be viewed as call to action. I have not been too much off the mark on calling the developments not only of the past 12 years, but for the entirety of my successful career of more than 50 years in finance.

You ignore me at your own severe personal risk."


Sun, 04/07/2013 - 13:14 | 3418689 CrashisOptimistic
CrashisOptimistic's picture

No one reads anything longer than 3 paragraphs in a ZH comment.

Sun, 04/07/2013 - 18:50 | 3419863 klockwerks
klockwerks's picture

Wrong crash, read the whole thing and darn well worth it

Sun, 04/07/2013 - 14:05 | 3418823 it aint paranoi...
it aint paranoia if they really are out too harm you's picture

First, BIG thumbs up for your avatar, Kaiser Sousa... one of my favorite: the character and the movie.

I am 52 years old and certainly do no social media (except rare comments on an obscure website that sems to have evolved from being an investment/ economic site at first).  I don't "get it", the social media thing. If I have something to say to you, I'll call.  I don't even text.  Granted the gov't gets all the calls. I still want less than two dozen people to "know me" in any real sense.  I exclude family and co-workers from most of this...they don't share my world view at all.  With that long caveat revealing my lack of knowledge on the subject-

Why not use the social media as a ruse.  Don't put anything on the media that is true, but purpose yourself to paint the picture you WANT them to see.  Those that truly know you will love it.  Those that don't know you- who cares? Use only public computers to view the web, especially ZH.  Paint yourself as the indebted idiot that told their man-child who lives downstairs to borrow $100,000 for his education and how terrible it is that the demopublicans won't pay it off.  You get the idea.  It may not fool the higher intel parts of the gov't, but certainly should throw off the dogs of the taxman.

Maybe I'm overthinking this. 


Sun, 04/07/2013 - 17:02 | 3419387 espirit
espirit's picture

If you have ever worked for .gov, you'd realize you have no secrets.  Your social media ruse might fool some telemarketers, but .gov? - no way.

Ever use a credit, debit, or any form of payment other then cash?  Make a utility / phone / mortgage / car / other / payment with a check?  It's all logged. 

Your personal file may be megs or gigs, it's up to you.

Sun, 04/07/2013 - 12:40 | 3418602 midtowng
midtowng's picture

I don't see why they shouldn't pay their workers in mortgage-backed securities instead.

Sun, 04/07/2013 - 12:47 | 3418620 Winston Churchill
Winston Churchill's picture

Face or real NPV on those MBS..

Only the fed pays full price for worthless crap.

Should be 10 cents on the dollar.Can you say "backdoor bailout".

Sun, 04/07/2013 - 13:22 | 3418713 disabledvet
disabledvet's picture

clever "right back at ya'." in other words "there's a lot more worthless scrip you can pay people in...why the good stuff?" hmmmm. this meeting just happened plus you've got a "good old fashioned labor action" interestingly all the gold is "Nazi gold"..."controversial" they call it. i look forward to the interview with said gold to see how it responds. my plan is to start soft with "zee gold" but them "nail 'im with the haymaker" maybe 3/4 of the way through. something along the lines of "well, you know what they've been saying don't you?" and the gold replying "hmmm? what?" and then...KABAM!..."that you're controversial Mr. Gold Bar." i look forward to some type of emotional response of course...

Sun, 04/07/2013 - 13:34 | 3418748 noless
noless's picture

weren't you saying you were watching cyprus closely, like, a couple weeks before the bank holiday?

Sun, 04/07/2013 - 14:10 | 3418836 it aint paranoi...
it aint paranoia if they really are out too harm you's picture

Some guy named gresham should do a theory on that.

Sun, 04/07/2013 - 14:38 | 3418921 thisandthat
thisandthat's picture


all the gold is "Nazi gold"

LOL and where did you get that, genius? Obviously some gold came from Germany, since, as a neutral country (and, though pro-axis, to the benefit of the allies), it would either deal with both or none (which would be irrealistic, for a country dependent on foreign resources), to hold true to the neutrality status. But, hey, surely that makes for a great headline...

Btw, some trivia on that, according to the late father of previous prime-minister, "if you're going to deal with someone, do it with the Germans; at least they pay..." - his father dealt with tungsten; Germans bought a lot of it, then (so much, it's known here not by its usual name (tungsténio), but by the german name (volfrâmio)), but so did the British, and, apparently, these were "harder" to collect from (my guess is they'd topped out imperial looting by then, and couldn't find new serfs to collect from in time, unlike the germans...).


Anyway, and FOR THOSE WONDERING, this is nothing new, IT HAS BEEN DONE BEFORE, back in the 80s, then by a socialist government, and also under IMF's "ruling".

Mon, 04/08/2013 - 14:00 | 3422665 auric1234
auric1234's picture

MBS are worth more than gov't bonds. Gov't bonds are irredeemable paper -- pure junk-- whereas with MBS at least you get some real estate (which is overvalued, but at least it's worth something).


Sun, 04/07/2013 - 12:22 | 3418540 blindman
blindman's picture

there ya go, it is on !

Sun, 04/07/2013 - 12:23 | 3418541 Theta_Burn
Theta_Burn's picture

Better than Puka shells i guess....

Sun, 04/07/2013 - 12:24 | 3418542 resurger
resurger's picture



Sun, 04/07/2013 - 12:23 | 3418543 realtick
realtick's picture

'We cannot pay a bill, you can only discharge a debt."

Sun, 04/07/2013 - 12:32 | 3418544 Smegley Wanxalot
Smegley Wanxalot's picture

Absurd, yeah kinda, but I have no problem with letting the public workers directly endure the true diminished value of their lacking output after we in the private sector have had to suffer and subsidize it for so long.


The other option is bitcoins minted in Lisbon: Lisbitcoins. Let's see how well they trade.

Sun, 04/07/2013 - 12:36 | 3418586 blindman
Sun, 04/07/2013 - 12:36 | 3418588 Melin
Melin's picture

Public worker is an oxymoron and a misnomer. 

Government worker is a better name for those pitted against private purses.  It's still an oxymoron but only the truly faithful believe they were ever there to benefit the fictitious "public."

Sun, 04/07/2013 - 13:14 | 3418692 kaiserhoff
kaiserhoff's picture

A friend in DC, who was employed by the government, referred to her colleagues as "desk occupiers."

Even that was generous.

Sun, 04/07/2013 - 14:07 | 3418827 orez65
orez65's picture

Another term for government workers: turkey farm.

Sun, 04/07/2013 - 12:28 | 3418548 Debugas
Debugas's picture

yeah if you cant print euro but need to pay your bills you can create currency on the fly - print your own IOUs

That is de-facto Portugal leaving the euro. Soon we will have a bunch of local currencies in the form of all sorts of IOUs and these are viable alternative to the euro

Sun, 04/07/2013 - 12:32 | 3418575 css1971
css1971's picture

Came to exactly the same conclusion.

Sun, 04/07/2013 - 12:28 | 3418557 Muppet Pimp
Muppet Pimp's picture

Give them cowrie shells and let them eat cake

Sun, 04/07/2013 - 12:29 | 3418558 bugs_
bugs_'s picture

we'll pay them in zero coupon 100 year notes

Sun, 04/07/2013 - 12:31 | 3418567 resurger
resurger's picture

With Zero Discount rate!

Sun, 04/07/2013 - 12:29 | 3418563 css1971
css1971's picture

You may think it's absurd, but it's effectively the introduction of a local, national government created currency by Portugal. i.e. they're leaving the EuroZone.

It'd fly because they will accept them in return for tax.

Sun, 04/07/2013 - 14:55 | 3418976 thisandthat
thisandthat's picture

Isn't all government issued currency, a treasury bond by other name (or vice-versa)?

Sun, 04/07/2013 - 15:16 | 3419052 css1971
css1971's picture

Well they're all bits of paper with writing and numbers on them, issued by a government. You can believe what you want to believe about their worth.

Sun, 04/07/2013 - 15:38 | 3419132 thisandthat
thisandthat's picture

Exactly - what's your dollar's worth?

Sun, 04/07/2013 - 12:29 | 3418565 GoldRetriever
GoldRetriever's picture

Soon Europe will be referred to as the "You're Owed Zone."

Sun, 04/07/2013 - 12:31 | 3418569 Satan
Satan's picture

I'll see your T-Bills and raise you 4 Spider-Man towels!

Sun, 04/07/2013 - 12:36 | 3418585 Bearwagon
Bearwagon's picture

Portugal:"ALL IN!"

Sun, 04/07/2013 - 12:43 | 3418611 toys for tits
toys for tits's picture

I guess Satan is on board with Portugal's new plan.

Sun, 04/07/2013 - 12:49 | 3418624 Satan
Satan's picture

It's the souls of their unborn children I'm after.

Sun, 04/07/2013 - 16:25 | 3419269 WhiteNight123129
WhiteNight123129's picture

Portugal has openly decided to get its segniorage back, by-passing in that sense teh ECB and Merkel.

What this moves means is very important.

The segniorage was transferred to the ECB and Merkel and the periphery country lost their printing press while Merkel is not letting the ECB print outright (LTRO is collateral lending).


If Portugal was issuing gov bonds and then the central bank of Portugal would buy those bonds against newly printted cash, the Gov is getting new cash to spend (segnioriage).

By letting government bonds and bills be used directly as a form of payment it is somewhat equivalent.

The origin of the greenback is a the third issuance of green bills during the civil war. Initially the first two issuances were redeemable in Government bonds which were redeemable in gold. The third issuance was a non interest bearing receipt redeemable in ~nothing ~!


Sun, 04/07/2013 - 18:01 | 3419668 thisandthat
thisandthat's picture

And how would you like to pay for it, Sir? Bond, Treasury Bond...

Sun, 04/07/2013 - 15:49 | 3419174 thisandthat
thisandthat's picture

Beach towels as the new currency?

I'll see your Spider-Man towels, and raise you the 500 € note towels:

Sun, 04/07/2013 - 19:23 | 3419970 StychoKiller
StychoKiller's picture

Ooo, too rich for my blood...

Sun, 04/07/2013 - 12:30 | 3418571 Bearwagon
Bearwagon's picture

That should show everybody who's boss!

Sun, 04/07/2013 - 12:33 | 3418574 ElvisDog
ElvisDog's picture

I have this argument with my liberal friends all the time. Courts and legislatures can mandate whatever they want, but if there is no money to pay for it what do the "mandates" really mean. I usually get blank stares or sputterings (or they just get mad). Why doesn't the court mandate an 100% in pension payments or free unicorns for everyone while they're at it?

Sun, 04/07/2013 - 12:45 | 3418615 HD
HD's picture

Well...I wouldn't say no to a free unicorn - but I'd prefer a large winged pegasus if it's all the same.

Sun, 04/07/2013 - 14:19 | 3418863 kaiserhoff
kaiserhoff's picture

That would come in handy for fertilizing the north 80.  Keep me posted on your progress. 

You and me, kid;)

Sun, 04/07/2013 - 13:04 | 3418655 Bobportlandor
Bobportlandor's picture

They educated the kid, the same kids they expect to pay for their over bloated retirement.

They stuck their nose into ever-ones else s business.

They took the bribes

They miss allocated money.

They wasted my tax dollars

They made their bed, and f'ed us all.

Sun, 04/07/2013 - 14:11 | 3418844 orez65
orez65's picture

My own experience when discussing economics with liberals:

1. Anger
2. Disbelief
3. The deer in the headlights look
4. Refusal to discuss nuclear power.

Sun, 04/07/2013 - 12:32 | 3418576 The Abstraction...
The Abstraction of Justice's picture

And they wonder why bitcoins are soaring in value.

Sun, 04/07/2013 - 12:35 | 3418587 ElvisDog
ElvisDog's picture

Karl Denninger has a good take on bitcoins and the trust that some people have in it. Do you really think in an age where there is no rule of law and pervasive government spying on everything that our dear leaders are going to leave bitcoin alone? Investing in bitcoins will be treated like counterfeiting at some point. At least gold and silver coins are real, tangible goods. Bitcoins are a series of zeros and ones that are supposed to represent wealth.

Sun, 04/07/2013 - 12:52 | 3418630 The Abstraction...
The Abstraction of Justice's picture

As I said before you need express safety in terms relative, rather than absolute.

Sun, 04/07/2013 - 13:17 | 3418686 ebworthen
ebworthen's picture

Relative sense:  Today Bitcoins are safe and their growth in value is parabolic.

Absolute: This could end overnight, and no way for you to stop it.

I wish Bitcoiner's the best, really, fight the machine; I just fear you may be riding on the Hindenburg - and I like you.

Sun, 04/07/2013 - 13:39 | 3418762 The Abstraction...
The Abstraction of Justice's picture

Ah but mind, I have a silver parachute.

Sun, 04/07/2013 - 13:41 | 3418764 The Abstraction...
The Abstraction of Justice's picture

Ah but mind, I have a silver parachute.

Sun, 04/07/2013 - 13:53 | 3418787 CrashisOptimistic
CrashisOptimistic's picture

As has been pointed out over and over again, gold and silver are not real.  Their value is inside your head.  As for a government taking action against bitcoins, the LAST thing a govt will do is try to confiscate gold because they have a better option.

Gold will not be confiscated.  Rather, transactions with it will be taxed at 70%.  You buy food with it?  70%.  You buy anything with it?  70%.  You think you can buy things and not pay?  You will never know if your counterparty is IRS.  And perhaps most important of all, within a week of the 70% imposition, market for it will disappear and quoted value will be 0.  So don't swagger about having a gun to shoot people who try to get you to pay the 70%.  You won't even have a published price anymore.

Only one thing has value.  Calories.  Anything but farmland is imaginary.

Sun, 04/07/2013 - 16:55 | 3419347 ElvisDog
ElvisDog's picture

Farmland? Farmland is the easiest thing to confiscate, because you can't hide it and you can't take it with you. Assuming the government does what you say and taxes gold transactions at 70%, do you honestly believe they will leave your privately-owned farmland alone?? They will simply raise your property tax on farmland to 90% of its assessed value, or just cut to the chase and confiscate it directly in the interest of national security. If holders of gold/silver are naive, holders of farmland are idiots (to think they can hold on to it).

One word for the relative value of gold versus farmland - "Rhodesia"

Sun, 04/07/2013 - 17:41 | 3419564 Lednbrass
Lednbrass's picture

And as in Zimbabwe/Rhodesia- who would work it? Land is not taxed at the federal level, it is a State/Local thing.

Any attempt to confiscate farmland would result in oturight attacks on Federal officials, and State/Local law enforcement is not going to side with the Federal government.  That would certainly ignite the powder keg.

Sun, 04/07/2013 - 14:16 | 3418859 orez65
orez65's picture

Bitcoin: the poster boy for a Ponzi Scheme.

How can people be so stupid??!!

Sun, 04/07/2013 - 12:32 | 3418579 GoldRetriever
GoldRetriever's picture

The new currency for Portugese public workers - The "Lisbond."

Sun, 04/07/2013 - 12:41 | 3418581 resurger
Sun, 04/07/2013 - 12:35 | 3418584 Racer
Racer's picture

Well Treasuries are IOUs the same as toilet paper, er, Euros, dollars or any other paper money based on nothing but a vague promise to pay the bearer

Sun, 04/07/2013 - 12:49 | 3418593 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

I'm sure Obama and the boys in goobermint as salivating at the lip hoping this trial balloon actually works.

Though here I think they will do it in a more subtle manner which is implement a new treasury dollar backed by government debt and no hard assets as an alternate to the Federal Reserve note payed to Federal employees. Goobermint bucks that have better purchasing power than the devalued to nothing Federal Reserve dollars competing in the same decimated economy. Since the great divider is destroying America by class warfare why not take it to the next step which is mother goobermint money against the sheep's money. Helps extend the scam longer since the goobermint people will all accept it rather than do the right thing.

I'm sure they will try some permutation on this scam and use the laws and courts to force acceptance of them in the market for transactions. Probably use socialist coercion tactics to force businesses to accept them.

Sun, 04/07/2013 - 12:48 | 3418622 HD
HD's picture

10 or 30 year T-bills? Who the hell would wait for them to mature when they need to pay their bills now?

Sun, 04/07/2013 - 13:46 | 3418641 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

I have some thoughts on how to do it but I don't want to give them any concrete examples that might actually work. Remember you are dealing with socialists (passive aggressive nazi control freaks), the end goal is productive human capital ownership by the choosen select few. Remember you are not equal to them only a resource to be controlled, why do you think personnel are handled by a human resource department. Language my friend language always gives away true intentions.

Why not a human being department.

definitions everyone else can put together the real intentions based on language.


a : the quality or state of having existence


b (1) : something conceivable as existing

   (2) : something that actually exists

   (3) : the totality of existing things



a : a source of supply or support : an available means —usually used in plural

b : a natural source of wealth or revenue —often used in plural c : a natural feature or phenomenon that enhances the quality of human life


That is what you are to them but they make sure you don't think of yourself as the same. Chew on that idea kids. Who are the real producers and wealth generators.

Sun, 04/07/2013 - 13:45 | 3418726 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

I can see them forcing compliance at zero interest by using taxes as the carrot for businesses to accept the bills. Make the effective tax rates so fucking high that only the monopolies can exist then offer incentives like lower business tax rates / payroll taxes for those that accept the bills for goods and services.

Basically it is an S&M monetary system. The goobermint is the dominatrix and you are the unwilling slave. The amount of flogging from the goobermint mistress is proportional to how masochistic and depraved the slave wants to be. 

Mon, 04/08/2013 - 02:41 | 3420951 thisandthat
thisandthat's picture

No idea, it isn't even official, but last time (86, I think) was 6 months.

Sun, 04/07/2013 - 13:46 | 3418771 css1971
css1971's picture

Obama doesn't need to. He can have pallets of dollars printed at will.

Portugal can't simply print Euros... Which is like the whole problem of the Euro Zone. The traditional mechanism for getting rid of too much sovereign debt is inflation. The euro was set up in such a way that this isn't ... easy ... to do.

"Probably use socialist coercion tactics to force businesses to accept them."

It's called taxation. You just say "we'll also accept these in lieu of Euros" and you got yourself a viable local currency.

What's interesting about this is it uses Euros (scarce) as backing for the local currency (Portugese Government Bonds). If done well it could prevent a Greek/Spanish style depression while Euros are scarce in the region.

Something similar was done in the 1930s by a small town in Austria (Wörgl) to prevent the depression from causing suffering.

Sun, 04/07/2013 - 15:13 | 3419041 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

On a local level it could work but you still have debt to pay off at a global level. If you don't have enough hard assets or things of equivalent value to pay that debt off, you as a sovereign nation unless you have enough guns to force a debt forgiveness/repayment terms are finished. You've essentially become nothing more than a debt slave owned by the credit holding master.

Sun, 04/07/2013 - 15:34 | 3419116 css1971
css1971's picture

That debt's never getting paid off. The holders are completely delusional if they think it is.

For example, take a look at the US total debt chart for the last 40 years. An almost perfect exponential curve upwards. None of that has ever been paid off, it simply gets rolled over and "grows".

The blip at the top? That's the bit they're desperately trying to get back on to the exponential growth trend again.

So basically sovereign creditors are already getting 1 of two things:

  1. A haircut.
    1. A straightforward explicit default on all or some of their holding.
  2. A haircut.
    1. Through inflation, an effective default on some or all of the debt by paying it in devalued currency.

I don't see all that much difference with the existing system except it's government employees who're going to be the holders.

Sun, 04/07/2013 - 12:37 | 3418594 observer007
observer007's picture

Bundesbank Plans Deposit Haircuts For Bank Customers

In an interview today  the President of the Bundesbank announces plans for deposit haircuts for bank customers in case a financiel institution goes bankrupt.

Mon, 04/08/2013 - 02:10 | 3420920 MeelionDollerBogus
MeelionDollerBogus's picture

password required, no copy in any search engine cache I can find

got another one?

Mon, 04/08/2013 - 09:07 | 3421426 andyupnorth
andyupnorth's picture

Same proposals in 2010 for the UK and the U.S., and the same proposals in 2013 for Canada.

I'm beginning to see a pattern...

Sun, 04/07/2013 - 12:42 | 3418598 JustObserving
JustObserving's picture

Portugal could have paid in Bitcoins but they hit $159 today  - up from $46 before the Cyprus crisis.  Maybe, workers can be paid in gold and silver as they are quite cheap.

If silver had gone up as fast as Bitcoin during the last 3 or 4 weeks, it would be near $100 an ounce.

Sun, 04/07/2013 - 13:05 | 3418668 GrinandBearit
GrinandBearit's picture

No question it's bubble.  ALL bubbles crash.  How long can it last?

Sun, 04/07/2013 - 13:08 | 3418673 ebworthen
ebworthen's picture

If Silver were nebulous sparks in a wire somewhere it would be at 1 cent/ounce.

Sun, 04/07/2013 - 14:58 | 3418999 thisandthat
thisandthat's picture

Yes, I'm pretty sure the 900 mil needed (after taxes; 1350 mil, before) would be a breeze to get, in bitcoins (and a blessing for speculators)...

Sun, 04/07/2013 - 12:37 | 3418599 q99x2
q99x2's picture

Maybe a platinum trillion coroa would do the trick.

Sun, 04/07/2013 - 12:40 | 3418600 akak
akak's picture

I will gladly pay you ten years from Tuesday for a day's labor today.

Sun, 04/07/2013 - 14:12 | 3418847 Ghordius
Ghordius's picture

+1 all a question of... maturity

Sun, 04/07/2013 - 14:16 | 3418860 knukles
knukles's picture

He says whilst the EU leaders all sit out in the public square playing with themselves, cross-eyed, drooling....

Little Billy:  Mommy, mommy look!
Mommy:  (covering little Billy's eyes) You never saw that Billy, that never happened...

Sun, 04/07/2013 - 12:44 | 3418606 Smiley
Smiley's picture

Fully fund thier pensions for the next 100 years with the T-Bills while you're at it along with the rest of their benifits.  It's the government that they make up the infrastucture for, surely the promise notes are worth the rock solid value of a politician's word!

Sun, 04/07/2013 - 12:44 | 3418609 surf0766
surf0766's picture

Here take this shit cause no one else will. All your money are belong to us. Communist/marxist/Socialist/NWO they all want the same thing.


Your Money !

Sun, 04/07/2013 - 12:43 | 3418612 max2205
max2205's picture

If only GE paid a month of salaries and bonus in stock can there be justice


Let them eat debt!

Sun, 04/07/2013 - 12:51 | 3418625 Fix It Again Timmy
Fix It Again Timmy's picture

Ich bin ein Lisbonian....

Sun, 04/07/2013 - 14:59 | 3419000 WmMcK
WmMcK's picture

Is that like a "Pastel de Belem"?

Sun, 04/07/2013 - 17:53 | 3419620 DriveByLurker
DriveByLurker's picture

"Lisbonian" - isn't that a porn genre?

Sun, 04/07/2013 - 12:54 | 3418635 hooligan2009
hooligan2009's picture

excellent...we now have an ackowledgement that monetary policy and fiscal policy are one and the same!

spot the difference between a t/bill or government bond and a bank note!!

hint banks notes don't pay interest because they are (supposedly) a transmission mechanism and a means of transferring ...errr....value ..yanno.. some civil servant says "i pay the bearer on demand the sum of .." or "in God we trust" god, not your god that is..

two questions...

why not cancel the central banks holding of government bonds..i mean really...who loses in this book entry (debt already issued for cash already out there)?

why does a government not issue same day/overnight tbills as cash? would get interest rate down to double O, triple O fuck all blank and save heaps of money!

kind of puts what cash actually is, in a new perspective..if people recognise same day tbills as cash..all you need is a to issue undated tbills...yanno...perpetual zero coupon bondss which are after all what cash is ...of course..whethr cash is worth the paper it is printed on is another matter entirely..but then again, governments that never repay debt and pay interest for the privilege aren't any difference..perpetual zero value creators!



Sun, 04/07/2013 - 13:04 | 3418664 Bam_Man
Bam_Man's picture

Some good points you made in there.

However cash today is much like a zero-coupon bond discounted at a NEGATIVE rate (inflation and default risk).

Sun, 04/07/2013 - 13:39 | 3418759 hooligan2009
hooligan2009's picture

very true..

inflation means spend now or pay more later..on the essentials of goods well..are they going up in price if you think that most people on food stamps cant afford to run a car?

of course...according to the calculation fro the urban cpi, essentials (food, utilities) are a smaller component of inflation than those non-essential items like ipads, galaxy phones and well you get the picture.

i am reminded of the movie "East of Eden" with jimmy dean..might have to buy a hill of beans soon.


Sun, 04/07/2013 - 13:19 | 3418644 ebworthen
ebworthen's picture

Can we all pay 6.4% or 10% or 20% less every month on the mortgage and health insurance?

The social contract is broken, societies are being torn down.  Why work and pay bills?

Sun, 04/07/2013 - 13:02 | 3418647 czarangelus
czarangelus's picture

If it's got Washington's face on it, that's to whom it belongs. The only real money is metal. Silver from the Goddess, gold from the God.

Sun, 04/07/2013 - 13:04 | 3418658 Bingfa
Bingfa's picture

We've all been warned, the people actually paying attention...


There's nothing worse than an Alcoholic coming to a party ..late and drunk

Sun, 04/07/2013 - 13:40 | 3418765 hooligan2009
hooligan2009's picture

its worse if its your wife!

Sun, 04/07/2013 - 13:03 | 3418662 put_peter
put_peter's picture

Euro reinvented!!! But no confiscation this time!!

Sun, 04/07/2013 - 13:17 | 3418696 forrestdweller
forrestdweller's picture

a treasury bill-gold sandwich, for only 1,99.

Sun, 04/07/2013 - 13:18 | 3418707 They Tried to S...
They Tried to Steal My Gold's picture

I'm gathering Portugese Sausage may be the next currency used......

Sun, 04/07/2013 - 13:31 | 3418742 morning
morning's picture

here we go...

Sun, 04/07/2013 - 13:38 | 3418753 Mark123
Mark123's picture

Did Mugabe try this?  It is elegant indeed....but can the recipient sell the treasury bill on reciept, or do they have to hold for some period of time?  I can't imagine that they will keep their value.

Sun, 04/07/2013 - 13:43 | 3418768 hooligan2009
hooligan2009's picture

redeemable in euros!

hey, are tbills treated as government debt or are they treated as monetary policy instruments in satisfying terms of the Maastricht Treaty or the way the ECB treats them for collateral purposes?

Sun, 04/07/2013 - 13:48 | 3418778 thewayitis
thewayitis's picture


   Puck you Portugal.....

Sun, 04/07/2013 - 14:54 | 3418978 WmMcK
WmMcK's picture

What are you Fillipino?  Peolple don't talk like that in Brasilia. /<sarc>

Sun, 04/07/2013 - 14:11 | 3418842 Sid James
Sid James's picture

In Britain we call those IOU's.

Sun, 04/07/2013 - 14:59 | 3418997 FieldingMellish
FieldingMellish's picture

In Portugal its called toilet paper.

Sun, 04/07/2013 - 14:59 | 3419004 css1971
css1971's picture

You have read the small print on a five pound note?

Sun, 04/07/2013 - 14:17 | 3418862 FIAT
FIAT's picture

I hope europe collapses soon, so I can move to the first country that starts rebuilding while the'kwa comes tumbling down.

Sun, 04/07/2013 - 15:04 | 3419019 Dangertime
Dangertime's picture

And risk free-market discovery of the interest rates on those bonds?


I think it will be discovered rather quickly what the value of those bonds are when people start trading them for tangibles.

Sun, 04/07/2013 - 15:06 | 3419024 Chris88
Chris88's picture

Somehow this comes to mind:

Sun, 04/07/2013 - 15:22 | 3419065 ekm
ekm's picture

It is an absolutely great idea.

All GM union workers should get paid with GM stock shares, also.

Of course, none of them buys any GM cars they themselves produce.

Sun, 04/07/2013 - 15:43 | 3419150 Arturo
Sun, 04/07/2013 - 17:31 | 3419504 orangegeek
orangegeek's picture

Portuguese bonds.  Really? 


How about Portuguese buttons?

Sun, 04/07/2013 - 19:45 | 3420042 andrewp111
andrewp111's picture

This is no different than California paying its bills in scrip, which it does from time to time.

Sun, 04/07/2013 - 19:27 | 3419989 MeelionDollerBogus
MeelionDollerBogus's picture

in Soviet Eurozone, bank runs on you!

No chance to run, no place to hide

Sun, 04/07/2013 - 23:01 | 3420646 jonjon831983
jonjon831983's picture

Grab it from the roll of tbill toilet paper, plent where that came from!

Mon, 04/08/2013 - 01:24 | 3420874 MFLTucson
MFLTucson's picture

Lets see, US treasuries that are at 2% with huge risk of failure versus nothing.  They are the same so why bother?

Mon, 04/08/2013 - 07:52 | 3421186 TalkToLind
TalkToLind's picture

All of your public payroll are belong to us.

Mon, 04/29/2013 - 08:43 | 3509514 KingofthePaupers
KingofthePaupers's picture

Tyler Durden: A solution has, luckily, presented itself: bypass the unconstitutional provisions by paying government workers not in cash, but in government bills! From the WSJ:
The Portuguese government is considering a plan to pay public w...orkers and pensioners one month of their salary in treasury bills rather than cash after a high court ruled out wage cuts, a person familiar with the situation said Sunday. By paying one month of salary in T-bills to public workers and pensioners, the government would save an estimated €1.1 billion in expenses, narrowing the budget gap significantly.
Jct: And by paying 12 months worth, like Argentine Solution Provinces did, would save them 13 billion!

Incidentally, this plan makes perfect sense: with every central bank openly monetizing its debt, it has effectively made debt and cash equivalent... Coming next: the full convertibility of Spanish Spiderman towels backed by the full faith and credit of the Rajoy kickback scandal, and fully convertible into chorizo... All joking aside, the fact that this absurd option is even being contemplated.
Jct: So Tyler doesn't even understand what he just explained to us so well!

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