The bonds have sunk to junk levels in Puerto Rico making the poor state even poorer in the process. The whole issue of too little money to go around has been a major reason behind the struggling nation’s current crisis.
The economic house of cards that represents the total assets and liabilities of a country may come down any moment leaving its people high and dry. And the fact is that most of the bonds in Puerto Rico are owned by US municipal mutual funds.
Furthermore, the recession has really hit the wallets of the denizens hard. A massive brain drain has begun. Most of those who are leaving the small island are headed for the Land of Opportunity, the mainland United States.
The bonds in Puerto Rico had been a lucrative source of easy cash once upon a time. But now that the overall debt has crept up unawares, the hard times are here. And they are not going to end soon. The complex games played with money by the bankers and economists have left a gap in the process. And to fill it is the need of the day.
The downgraded bonds are a setback from which the tiny state will find it hard to recover. It will take efforts on a monumental level to overcome the hardship that weighs down upon everyone Puerto Rican right now.