Puerto Rico close to default

Status
Not open for further replies.
Originally Posted By: Miller88
Can't wait until we get to that point in the US ...


You trying to be funny, or are you some kind of sicko?
 
Originally Posted By: grampi
Originally Posted By: Miller88
Can't wait until we get to that point in the US ...


You trying to be funny, or are you some kind of sicko?


The preppers need something to happen quick. All their canned beans are getting ready to expire.
 
Originally Posted By: Miller88
Can't wait until we get to that point in the US ...


Some of you guys have your heads in the sand when it comes to economics; how can the US default when it issues it's own currency?
confused2.gif
The problem countries around the world, especially in the Eurozone like Greece, can not issue their own currency and as a result, their debts are not denominated in their own currency. The strong EU countries like Germany can therefor make the weaker countries debt slaves because there really is no mechanism to transfer/share risk politically from country to country like US states do in the USA.

The US can't default because it literally has the economic, political, and military superiority to create it's own currency/government spending digitally. It therefor doesn't really borrow; when it deficit spends, which it has since the inception of the country, it's creating money out of thin air, not borrowing it. Therefor, that money needn't be "paid back".
 
As a US colony, PR cannot declare bankruptcy. The issue is a little bit more complex than is being presented in our mass media.

So, these are tax exempt, municipal style bonds and are 100% risk free for the buyer.

Quote:
The government had already begun borrowing in the 1970s and unemployment grew as multinationals left the island to pursue lower wages after the implementation of North America Free Trade Agreement in the early 1990s, and a construction bubble driven by infrastructure spending in the early 2000s collapsed. The borrowing accelerated, and now the ratio of debt to Gross Domestic Product – the broadest measure of a country’s economy – is a little over 100%, making it unsustainable.

Wall Street firms have also played a part in exacerbating the crisis. Recent credit downgrades allowed Wall Street to demand hundreds of millions more in short-term lending fees, credit-default-swap termination fees, and higher interest rates. Between 2006 and 2013, Puerto Rico raised $62bn in bonds, generating $1.4bn in fees for Wall Street banks and lawyers, according to an analysis by the Wall Street Journal. The island has more municipal debt per capita than any US state.

Puerto Rico’s territorial status has helped trigger the crisis in the sense that its bonds are triple-tax exempt, the case in all municipal bonds issued by US territories. This attracted hedge funds and the more sinister vulture fund speculators that specialize in high-risk bonds for a big payoff in the end.


http://www.theguardian.com/world/2015/jun/28/puerto-rico-debt-unemployment
 
Originally Posted By: Pop_Rivit
Originally Posted By: Clevy
Isn't Puerto Rico an American state or something like that?
American officials bail out banks when the only people losing there are the rich bankers,but will allow one of its "cousin" states crash and burn.
Funny

The older I get the less surprised I am by the behaviour of the very agency that is supposed to protect its citizens.
This gun control stuff is heating up again with the media coming up with its typical nonsense.
I saw a claim made by some elected official saying how many more mass killings happen nowadays and only gun restriction will improve this dire situation.
In 1982 2.6% of the total of deaths that year were a mass shooting.
In 2012 that figure ballooned to 3.6 percent.
So if you consider population growth in America and factored that in mass shootings have actually gone DOWN on a per capita basis.

America is the only nation that has a population with proper rights and freedoms(when first written)which allows the population to be armed with serious hardware.
The reason this was so important as to be the second one it guarantees the citizen the right to own and operate firearms. Not for hunting and survival,it's so that imperial/government stays honest,or will at some point be staring down the barrel of a gun.
I find that so fascinating and genius in forethought. It means the citizens voice really does count so if over time the government no longer represents the people anymore the people can load their guns and take the country back. so if ever tyranny gains a foothold the American people have the constitutional right and are even expected to rebel.
The founding fathers in all of their wisdom saw to it that in this new nation the people will have the power,and repression will be met with revolt.
Such a beautiful document,written by men whose philosophy was centuries ahead of its time.
They would be ashamed to see their dream in its current state. A nation no longer for the people,by the people.
Jmo


That's one of the most interesting threads I've read in a while. You've managed to go from modern day Puerto Rico, to the United States Bill of Rights, to the United States Declaration of Independence, to the Gettysburg Address-even suggesting that the Gettysburg Address was written by one of the United States' founding fathers and is somehow part of that "beautiful document".

All the while not knowing that Puerto Rico is not one of the 50 United States, but rather one of many U.S. territories. Thanks for the laugh this morning!


Thanks for setting the record straight Pop. The kids today know very little about history.
 
Originally Posted By: SteveSRT8
.

I can vouch for the crime situation. While touristing there we saw a lot of barbed/razor wire and were warned not to stop for red lights at night!

And from my own person experience these bums are worse when it comes to immigration than the Mexicans are, they bring their criminal ways, no desire to learn English, and additional family that leeches off of the US taxpayer as well. They are nothing but an additional drain on our own country. I'd like to see them all leave the US.
 
Last edited:
Originally Posted By: GiveMeAVowel
Originally Posted By: SteveSRT8
.

I can vouch for the crime situation. While touristing there we saw a lot of barbed/razor wire and were warned not to stop for red lights at night!

And from my own person experience these bums are worse when it comes to immigration than the Mexicans are, they bring their criminal ways, no desire to learn English, and additional family that leeches off of the US taxpayer as well. They are nothing but an additional drain on our own country. I'd like to see them all leave the US.


You don't know when to stop, do you?
 
PR will simply have to renegotiate.

This problem is very interesting, in a sense its similar to Greece since PR like Greece cannot issue its own currency. Its pegged to a stronger economy and currency so in a sense they will always be screwed. The EU IMHO is doomed because of this, you cannot have one currency in place when you don't have central economic and taxation control. Either all the countries in the EU have to give up monetary policy to Brussels or one by one the poorer countries will be forced into insolvency.

Typically weaker countries like Greece or PR for that matter will simply just inflate the [censored] out of their currency to solve debt issues.

Neither of these countries/territories will affect the world economy much. They are simply to small to matter.
 
Last edited:
Originally Posted By: zzyzzx
More importantly, at what point should I start buying stocks, since they are on sale right now and Greece is not important economically.


DOW down 350 at close today. Start buying any time.........-$5K on paper here.
 
Originally Posted By: Pop_Rivit


That's one of the most interesting threads I've read in a while. You've managed to go from modern day Puerto Rico, to the United States Bill of Rights, to the United States Declaration of Independence, to the Gettysburg Address-even suggesting that the Gettysburg Address was written by one of the United States' founding fathers and is somehow part of that "beautiful document".


I guess they lose something when translated to Canadian aye?
 
Originally Posted By: hatt
Who knew you couldn't live off credit cards. Interesting.


There is a fundamental misunderstanding about how monetary policy works.
 
There is a HUGE issue of responsibility here. IMO the people elected to positions which directly control the budget should be prosecuted for making irresponsible decisions.

Deficit spending is the norm and should be verboten...
 
Originally Posted By: SteveSRT8
Deficit spending is the norm and should be verboten...


Dave Ramsey 101 stuff here, but people will never understand.
 
I read about this a little today.

The flip side of irresponsible spending is irresponsible lending.

Who lent them the money? Wall St mutual fund managers.

Whose money do they lend? Yours.

A report I read was that Wall St was confident the money could be repaid.

How can "professionals" get these things wrong so often? It wasn't rocket science to see that Puerto Rico was in recession since 2006 and to see what the government finances were like. That's not even Credit 101 because you don't need a college course to figure out who to lend to!

Stop lending other people's money to irresponsible people!

But as long as people blindly give their money to overpaid money managers who take their cut regardless of results, the irresponsible lending will continue. And it's the uninformed saver who takes the hit.
 
Benito, the money will be paid back. Legally PR cannot default on its debts. All the governments borrow to fund their operations. The reason for the PR problems was that they were charged higher interest rates and high fees to issue the debt instruments even though it is a zero risk tax exempt bonds.

That's what happens when you have an oligarchy on the Wall Street and you are too small to have any negotiating power.
 
I heard they want to renegotiate terms with lenders ie the bond holders because their economy can't support the repayments. This suggests they over borrowed and also suggests Wall St did not understand the lending risk.

They are asking for the law to be changed so that they are allowed to declare bankruptcy. Something they cannot currently do.

Either way, not all the money gets paid back. Where are you hearing that the bonds are zero risk? Who is underwriting the bonds?
 
Status
Not open for further replies.

Similar threads

Skippy722
  • Locked
US Steel sold to Nippon
2
Replies
33
Views
2K
JavierH19
OVERKILL
The real cost of wind and solar: Why rates don't match the claims
4 5 6
Replies
116
Views
10K
oil pan 4
K
2022 Volkswagen Taos SE, FWD - 3,000 mile review
2 3 4
Replies
74
Views
19K
K.Aoi
OVERKILL
2019 RAM 1500 Sport update
2
Replies
23
Views
3K
OVERKILL
S
  • Locked
Are there ANY AMERICAN furnaces & A/C?
2
Replies
27
Views
4K
DBMaster
Back
Top