For U.S., Puerto Rico Bigger Tragedy than Greece – Ep 90

  • Global stock markets got beaten up overnight and the carnage continued here in the U.S.
  • Dow Jones down 350 points by closing bell – biggest point loss of the year
  • NASDAQ down 122 points
  • Possible Grexit sparked sell off in FOREX markets
  • Banks in Greece closing, sending masses to the ATM machines
  • Euro ended up closing near the highs of the day – nearly to $113
  • The dollar was weak all day against the Yen and against the Swiss Franc
  • There was no safe haven move into the dollar – gold up
  • The dollar lost considerable ground against the euro
  • Another confirmation that the dollar’s rally is over
  • My newsletter released today does a good job comparing the U.S. vs global markets
  • The U.S. did well against the international market from 1996 to 2000
  • In 2008 the U.S markets went sideways and the markets I recommend skyrocketed
  • We have been in a period similar to ’96 – 2000 and now we are about to see returns even greater than the 2008 gains in our markets
  • Regardless of the direction that Greece goes in this weekend’s referendum, the dollar is going down against the euro
  • Puerto Rican governor finally admitted the obvious – repaying their debt is impossible
  • Puerto Rican debt is a fraction of the U.S. national debt
  • If it is mathematically impossible for Puerto Rico to pay their debt, why does anyone think the U.S. will be able to eventually pay off its debt?
  • The only way we can pretend to pay our debt is for the Fed to do it for us by creating inflation
  • This is yet another reason why the Fed is not going to raise rates in September
  • We continue to get recession-like economic data, despite the fact that the Fed is still optimistic
  • The Federal Reserve is looking for an excuse to not raise interest rates
  • Maybe the situation in Greece will provide that excuse
  • Maybe it will be the volatility in China
  • “External problems” are providing an excuse to not raise rates
  • It is important to point out that Puerto Rico would not be experiencing such insurmountable debt if it were not for U.S. policy.
  • Puerto Rican debt has seemed attractive with its high yield and triple-tax-exempt status
  • Zero interest rates from the Fed, on top of high yields, have caused the debt to seem safe, even though mathematically it cannot be paid
  • People may begin to wake up when they realize what’s going on in Puerto Rico and that may become an even bigger problem than Greece