by Simon Black, Sovereign Man:
The news headlines read, “Deadly 6.4 Magnitude Earthquake Plunges Puerto Rico into Darkness”; and “Powerful Puerto Rico Earthquake Knocks Out Entire Island’s Power.”
It was enough to prompt my mother to call, four times, to make sure I was OK.
There’s been a string of fairly strong earthquakes lately in Puerto Rico… which is incredibly unusual for this part of the world. It’s been more than a century since the island was rocked by anything of this magnitude.
But I explained to my parents that the press had blown things out of proportion as usual. They were running video footage that made it seem as if the island had been blasted back into the Stone Age.
It’s true that there were some displaced families and property damage near the epicenter.
But most of the island was not substantially affected. None of the major news organizations bothered to show footage of busy shopping malls, crowded restaurants, and packed movie theaters teeming with consumers.
It’s also true that the electrical grid went down: the island was without power for some time. Here in my community, the power came back on after 2 days. Some people had it on after a day, some after 3 or 4 days.
But here’s what people don’t realize– the electricity problems in Puerto Rico have a lot less to do with the seismic activity, and a lot more to do with the island’s decade-long economic depression.
Puerto Rico’s economy has been in the dumps since at least 2006. The government is bankrupt and defaulted on many of its debts as far back as 2015. And Puerto Rico’s Electric Power Authority (PREPA) is bankrupt as well, having defaulted on billions of dollars worth of bond obligations.
All of this financial insolvency means that neither the government nor PREPA has the resources to invest in the electrical grid.
And most of PREPA’s electrical production assets are in desperate need of replacement.
The largest power plant in Puerto Rico is the 820 MW Costa Sur facility, and according to PREPA, it was built in the 1950s!
This makes Costa Sur more than twice as old as the average power plant in the US.
They simply don’t have the money to modernize or upgrade their facilities. And people who live here understand this reality: the electrical grid in Puerto Rico is incredibly weak.
I’m serious. Power outages are commonplace here. The power at my house goes out at least 2-3 times a month, usually for a couple of hours.
That’s because every time a mouse farts on this island, something goes haywire at the electrical plants and the power goes out.
But again, Puerto Ricans know this. They have little confidence in their government, and even less confidence in the electrical grid.
So everyone who has the means in Puerto Rico owns a generator. It’s their Plan B. The power goes out, the generator comes on, and everything is OK.
My house is equipped with a huge generator… plus a backup cistern in case the water company goes down too.
This isn’t some wild conspiracy theory. In Puerto Rico, there’s nearly a 100% certainty that the system is going to fail… so having a backup generator is a perfectly sensible precaution to take.
And people who take this precaution are well-protected in the event that disaster strikes.
This way of thinking can obviously be applied to a lot of things… like retirement planning.
It’s no secret that government pension funds around the world are woefully underfunded.