Puerto Rico’s island paradise may be teetering on the precipice of a financial collapse that would make Detroit’s implosion look modest by comparison, economists and analysts warn.
Detroit, a city of about 700,000, went bankrupt after piling up $18 billion in debt. Puerto Rico, by contrast, has 3.7 million residents -- and faces a whopping $87 billion in debt and unfunded pension liabilities.
“The Puerto Rican economy is near collapse,” prominent Puerto Rican economist Gustavo Vélez tells Newsmax. “The government is running out of money and there is no end in sight.”
Puerto Rico Senate President Eduardo Bhatia told bond analysts in New York on Monday that the Obama administration is “wondering how they can help Puerto Rico send a very strong signal of stability right now.”
He added that island officials are expecting “an announcement” soon from administration officials. But that appears to be at odds with a Bloomberg report that a U.S. Treasury Department spokeswoman said no plan is afoot to bail out the island’s economy.
In September, UBS AG and other U.S. brokerage firms warned some 40,000 U.S. investors and brokers to stay away from the bonds that Puerto Rico uses to finance its deficit. Not long afterwards, the island’s bond yield – the amount it has to offer to lure investors – rose to 9.29 percent, surpassing even that of Greece. Predictably, Internet headlines began referring to the beautiful tourist haven in the Caribbean as “America’s Greece.”
"Those who bought the bonds thinking the U.S. will bail out Puerto Rico will need to re-evaluate that, he says."
Your damn right, 'they' need to reevaluate their investments
. This is one to keep a close eye on folks. If there is EVEN A HINT of rescue or bailout, we should all raise holy hell.
I'm sick and tired of people making bad investments and then looking to the government to come to their rescue. IF YOU MAKE HIGH RISK INVESTMENTS...EXPECT HIGH RISK LOSSES. If those interest rates looked to good to be true, Then they probably WERE to good to be true.
Our tax dollars should not be a fall back for bad decisions.
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1 comment:
Get ready to raise hell... there is only 1 solution that Obama knows... THROW $$$$$$$$$$$$$$$$$$ at any problem.
It's the only answer he knows.
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