Puerto Rico Defaults on Debt: Invest in Bitcoin Instead
Puerto Rico defaulted on its public debt. The US island territory failed to pay its general obligation bonds on Friday. It owes an estimated $800 million to creditors, while only retaining $350 million in cash on hand.
A spokesperson for the governor defended the decision on Thursday:
‘This administration continues to take historic steps to ensure the residents of Puerto Rico continue to receive essential services while the commonwealth continues to face a delicate financial situation.’
Debt in theory guaranteed by the Puerto Rican constitution
According to the constitution of Puerto Rico, general obligation bonds are to be paid no matter what, even at the expense of emergency services such as police and fire protection.
However, governor Alejandro Garca Padilla indicated he was going against the constitution to prioritize the payment of emergency services. This is the first default by a state-like entity since the Great Depression.
This post was published at Coin Telegraph on 2016-07-03.