THE PUERTO RICO AFFAIR CONTINUES

This past week President Trump weighed in on the Puerto Rico debt situation. He said that the debt was worthless. Telling  the truth is hard to digest for bondholders, but it is what it is. For the likes of us, we can’t imagine who or what will ever pay back the billions of debt owed by the citizens of Puerto Rico. For heavens sake they are takers not givers; so debtors, kiss your paper goodbye – you can use it for wallpaper or toilet paper, they may be a better use. Puerto Rico has been mismanaged for years by using other peoples money. Why did they ever lend to them is beyond us. And the bond insurers, what were they thinking; beats us.

The best bet here is move forward, bring in the ‘dozers and level the place. Much of the shanty towns have seen total destruction because of lack of building codes and the building of illegal houses. Would you expect anything less. Farmers have seen their crops devastated by the cane. Suddenly, many Puerto Ricans are having to improvise to get by. Maria’s destruction is expected to worsen both. The island could lose 400,000 residents this year, dropping to 3 million. That will lead to steep revenue losses, further draining Puerto Rico’s ability to pay its obligations.Image result for bulldozer

Don’t forget 40% of their debt is owned by locals. Cancelling the debt will be a double whammy. Moving forward is the only way, but expect the Federal Government to throw more money into the wind. As of now, according to those in the know,  the rebuilding will take years. However, in the end, expect the capitalists to boat in, scoop up properties as a cheap price and then rebuild; making Puerto Rico better than ever.