Puerto Rico without electricity, wifi, ATMs shows importance of cash, gold and silver
Most of Puerto Rico remains in the dark and without power three weeks after storm
With widespread power failures, Puerto Rico remains cash only with retailers only accepting cash and few consumer having cash
Shortages of food, fuel and medicine with infrastructure repairs delayed
Power could be ‘out for months’ as 85% of people remain off the grid
Around 75% of ATMs disconnected
Electronic forms of payment including bitcoin have been rendered non viable
Puerto Rico’s accidental ‘cashless society’ shows risks of cashless society and importance ofholding cash, gold and silver out of the financial and digital systems
Editor: Mark O’Byrne
Aerial photo of floodingin Puerto Rico. Washington Post
Puerto Rico has been destroyed by two savage hurricanes which have plunged the island into darkness and despair. The landscape of ruined homes and entire towns resembles Hiroshima after the man made disaster of a nuclear bomb being dropped on the city.
More than three weeks since Hurricane Maria hit the island, 3.7 million American citizens are on the precipice of a humanitarian disaster.The majority of these peopleare desperate for food, water, electricity and shelter. They are desperate for cash that will allow them to secure these basic necessities.
Over 84% of the island remains without power and 37% of people are without access to water. Without power, much of the population is does not have electricity to charge their phones and iphones. Very few have wifi and this is severely impacting their ability to communicate and conduct their lives.
Inevitably, the future of Puerto Rico now lies in the wrangling hands of government and financial organisations, all of which seem to be pointing the finger of blame at one another.
The territory’s government expects to run out of cash by the end of the month.It hasasked Congress for an immediate payment of $6 billion to $8 billion. This is to meet vital expenses including salaries, emergency repairs, and pension payments.
We will run out of cash as ofOct. 31of this year, said Raul Maldonado, the territory’s treasury secretary. As of November, we will not be able to operate as a normal government.
Given the country’s dire electronic and communications situation, tax receipts are way down which will likely exacerbate the dire economic situation even further.
Problems are not just at a government level. Day-to-day life for Puerto Ricans is also obviously extremely hard and increasingly dangerous. The island is in a cash black-hole with little access to or means to buy essentials.
Not only is there a shortage of cash but the majority of ATMs are down. Even if cash was aplenty, few people are able to withdraw pay checks or access their digital savings and make payments electronically.
It is a stark reminder of how reliant our economies and day-to-day lives are on electricity.It is a stark reminder of how dependent ourmodern digital currencies whether they be public fiat or private crypto currencies are on increasingly antiquated electricity and power infrastructures.
Today the faith we put in governments that basic utilities will continue regardless is unprecedented. Citizens in Western nations rarely (if ever) question how they would manage if they had no access to electronic money or bank accounts and could make digital payments online or by credit and debit cards.
Puerto Rico should be a warning to us all. No matter how wealthy your country, how sophisticated’ your central bankers and central banking system and how technologically advanced your infrastructure, we can all be rendered poor overnight by the power of Mother Nature.
‘You’re broke even if you have money’
‘Cash Only’ is reportedly a common phrase across many of the retailers on the territory. The majority of gas stations and grocery stores are only accepting cash payments. Citizens have little choice but to try and find cash.
However, shoppers have the same problem retailers do they can’t get the cash they need. Reports theNew York Times:
Fewer than half of Puerto Rico’s bank branches and cash machines are up and running, still crippled by diesel shortages, damaged roads and severed communications lines. Bank officials say they are struggling even to find employees who can get to work when there is no public transportation and gasoline is hard to find.
Across the island, people who have spent their last dollars on an $8 bag of ice or $15 for gasoline are waiting for hours outside banks and A.T.M.s in hopes of withdrawing as much money as possible.
You’re broke even if you have money, Mr. Jimenez told the New York Times.
But is there really a cash shortage?Zoime Alvarez, vice president of the Association of Banks of Puerto Rico told the New York Times that not only was there already enough cash on Puerto Rico but there was more arriving to meet what the New York Federal Reserve called extraordinarily high demand.
Does this matter though when there is electricity failure across the island? This isn’t the only problem transport networks are down and organisations are struggling to deliver goods and services.
The infrastructure issues are unlikely to be fixed soon.
Already in a bad way
It’s no secret that prior to Hurricane Maria, Puerto Rico was already in a poor financial state. Private creditors were circling looking for the $74 billion that has been lent to the island in recent years. Now the cash situation is set to get even worse.
A federal government bill is set to increase the island’s liabilities by a further 14%.
In addition to the country’s $74 billion in bond debt, there is also a further $49 billion in pension obligations.
With this sorts of liabilities its unlikely creditors are going to put much faith in the future of the island. Whilst Congress is likely to agree some funding, it will not help the territory with its long-term finance issues.