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Sat Aug 1, 2015, 04:32 PM

Speculators Circling Puerto Rico Latest Mode of Colonialism

July 31, 2015
Speculators Circling Puerto Rico Latest Mode of Colonialism

by Pete Dolack

Puerto Rico’s governor may have said the commonwealth’s debt is unpayable, but that doesn’t mean Puerto Ricans aren’t going to pay for it. Vulture capitalists are circling the island, ready to extract still more wealth from the impoverished island.

You already know the drill: Capital is sucked out by corporate interests that pay little in taxes, budget deficits grow and speculators swoop in to take advantage, leaving working people holding the bag. Already, the Puerto Rican government is considering imposing an 11 percent cut to Medicare and Medicaid for 2016 and more than 600 schools may be closed in the next five years on top of the 150 already closed by budget cuts.

To ensure more austerity, a group of hedge funds hired three former International Monetary Fund economists to issue a report on what Puerto Rico should do. And — surprise! — the report, released this week, says to lay off teachers, cut education spending and sell public assets to provide money for hedge funds.

The crisis has already been profitable for Wall Street as banks and law firms racked up $1.4 billion in fees from 86 bond deals that raised $62 billion for the island between 2006 and 2013 alone. Because of downgrades in Puerto Rico’s credit rating, Wall Street can demand hundreds of millions more in lending fees, credit-default-swap termination fees and higher interest rates.

More:
http://www.counterpunch.org/2015/07/31/speculators-circling-puerto-rico-latest-mode-of-colonialism/

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