Posted on 04/23/2015 7:58:50 AM PDT by SeekAndFind
Puerto Rico's top finance officials said the government of the US territory will most likely shut down in three months because of a looming liquidity crisis, and they warned of a devastating impact on the island's economy.
In a letter to leading lawmakers, including Gov. Alejandro Padilla, the officials said a financing deal that could potentially salvage the government's finances looked unlikely to succeed. It warned of laying off government employees and reducing public services.
"A government shutdown is very probable in the next three months due to the absence of liquidity to operate," the officials said. "The likelihood of completing a market transaction to finance the government's operations and keep the government open is currently remote."
The letter, dated April 21, was also sent to the heads of Puerto Rico's Senate and House as well as the governor. It was signed by the government's fiscal team, including the head of the Government Development Bank and the Treasury Secretary.
Puerto Rico, which has a total debt of more than $70 billion, is trying to raise $2.95 billion in financing while pushing through unpopular tax reforms such as a higher value-added tax and increasing a levy on crude oil to help pay for it.
Puerto Rico is largely reliant on hedge funds for its financing needs. Those hedge funds have been pushing the government to carry out tax reforms to improve its fiscal position as a condition for providing extra financing.
Government bonds have been in steady decline in recent weeks as uncertainty grows over the prospects for the island of 3.6 million people. On Wednesday, its benchmark general obligation bonds traded at an average 79.982 cents on the dollar, close to an all-time low.
(Excerpt) Read more at businessinsider.com ...
devastating to whom?
Take to the boats,amigos!
The dilution of our currency can continue for many years and will.
It’s part of the plan to avoid a deep depression, which is why we are in a long shallow depression. This will last about 8-10 more years until the demographic situation begins to turn in our favor again. I calculate we will lose about 45% of our collective wealth over this period.
Predicting an “explosion” or a collapse has become a meme, but a false one. The FED can easily continue like this for a very long time.
It’s a stealth, slow-motion devaluation. Not saying I agree with it, just identifying what’s being done.
OH MY GOD!!! Run for the hills. No government officials to protect us from ourselves. Who will treat me with respect at the DMV? Who will make sure my toilet meets FDA standards? Who will ensure the safety of my tortillas? WE’RE ALL DOOMED!!!!!
Sayeth the Puerto Ricans.
The dilution of our currency can continue for many years and will.
It’s part of the plan to avoid a deep depression, which is why we are in a long shallow depression. This will last about 8-10 more years until the demographic situation begins to turn in our favor again. I calculate we will lose about 45% of our collective wealth over this period.
Predicting an “explosion” or a collapse has become a meme, but a false one. The FED can easily continue like this for a very long time.
It’s a stealth, slow-motion devaluation. Not saying I agree with it, just identifying what’s being done.
The dilution of our currency can continue for many years and will.
It’s part of the plan to avoid a deep depression, which is why we are in a long shallow depression. This will last about 8-10 more years until the demographic situation begins to turn in our favor again. I calculate we will lose about 45% of our collective wealth over this period.
Predicting an “explosion” or a collapse has become a meme, but a false one. The FED can easily continue like this for a very long time.
It’s a stealth, slow-motion devaluation. Not saying I agree with it, just identifying what’s being done.
“6 million on US food stamps”
If your oblique reference to 6 million on food stamps is referring to Puerto Rico, you are dead wrong. The population is 3,548,397 and has been dropping since 2000!
I hate people who throw out numbers like this with nothing to back it up.
Sorry about the triple post, don’t know how that happened.
Understood - but the getting away with this for a 'very long time' is 'iffy'. Granted - you have history to back that one up - the Fed has been getting away with this for a very long time; but I don't think it would take to much to pop the balloon.
Don worry. The Anglos on the mainland will come to your rescue with mucho money.
Barring any black swan events or major wars, this is how it will play out.
Does this mean we can’t borrow our way to prosperity? Who would have guessed.
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Someone posted that a citizen in Puerto Rico could be considered Disabled and receive SSI for not being able to speak English. What’s up with that?
The death throes of Socialism are upon us. There are not enough people to pull the wagon.
“They need independence and a return of all Puerto Ricans in the USA to help bolster the economy of this wonderful new nation.”
They are Americans. They can do whatever they want.
Their main industry, like in many areas of the US, is Gov’t Checks. They will never vote themselves independence as long as the Gov’t checks are coming - same as the rest of government-check-cashing America.
This is our Greece, our canary in the coal mine. As the fiscal and government environment grows more toxic, this (after Detroit) may be the first major victim.
1.37 million, I stand corrected.
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