Overstock.com CEO Exploring Sale To Fund Blockchain-Backed Global Property Venture

It’s fairly easy to categorize Patrick Byrne, the founder of Overstock.com, as a visionary, although he is usually described in less glowing terms in the mainstream media, a typical adjective being “controversial”. Byrne founded the $1.4 billion internet retailer of mainly “closeout” merchandise in 1997. In January 2014, Overstock became the first major online retailer to accept Bitcoin in payment for goods. Byrne explained how he became an advocate of cryptocurrencies in an interview with Adam Taggart of PeakProsperity.com.

In the 1980s, I was a graduate student at Stanford in philosophy, but with a heavy quantitative and logic approach. I studied the mathematics that underlies cryptography. It’s called computation theory. It was a fascinating field, probably the only religious experience I’ve ever had in my life. I felt like I was seeing the face of God -- I loved it. So, in about 2012, I was reading Fast Company or Wired, and I saw this blurb about this new form of money that no government was behind, based on cryptography. And, I realized, Gee, this is like an application of that math I’d studied 30 years earlier. Someday I want Overstock.com to be one of the first companies to take it.

In 2017, Overstock’s share price has more than doubled due to its blockchain investments rather than its online retailing activities, which have seen it categorised as a cryptocurrency “play”. Blockchain investments are contained in its Medici Ventures business and include a digital currency trading platform tZero. As the Financial Times notes.

Medici’s most closely watched bet is tZERO, a regulation compliant exchange geared towards initial coin offerings, which has been touted as Wall St meets blockchain. It will launch its own much-hyped initial coin offering to raise funds next week.

On Monday, Overstock’s share price surged 23% after Morgan Stanley Investment Management disclosed an 11.4% stake in the company. 

In an interview published in the Financial Times today, Byrne discussed how he’s planning on selling the online retailing business to develop a global blockchain business focused on the property sector. According to the FT.

Patrick Byrne, the controversial entrepreneur who runs Overstock.com, is exploring options to sell the online retailer, whose stock has soared amid this year’s cryptocurrency mania, to fund an ambitious attempt to make a global property registry on blockchain. Hernando de Soto, a well-known Peruvian economist who argues that formalising land rights is key to alleviating poverty, has joined forces with Mr Byrne in the latest attempt to leverage the distributed ledger technology to tackle social problems. Mr de Soto and Mr Byrne, a long-term cryptocurrency and blockchain enthusiast who waged a campaign against short selling, have formed a non-profit venture called De Soto, Inc. that intends to gather local informal ownership records into a blockchain database. A pilot is expected early 2018.

“One of the possibilities is I sell the (Overstock) business and we have all the capital we need” to fund the new venture, Mr Byrne told the Financial Times on Tuesday, adding that he would cherry-pick a dozen of Overstock’s top talent to take over to De Soto by late January. “I feel a great moral obligation to refocus my life around this,” he added.

You could be forgiven for getting confused between Hernando de Soto the Spanish conquistador who led the first European expedition deep into the modern United States (he was the first European to cross the Mississippi) and Hernando de Soto Polar, the economist and President of the Institute for Liberty and Democracy (ILD) in Lima. The ILD is credited with more than 400 initiatives, laws and regulations which have changed the Peruvian economy. On de Soto Polar, Wikipedia notes.

The main message of de Soto"s work and writings is that no nation can have a strong market economy without adequate participation in an information framework that records ownership of property and other economic information. Unreported, unrecorded economic activity results in many small entrepreneurs who lack legal ownership of their property, making it difficult for them to obtain credit, sell the business, or expand. They cannot seek legal remedies to business conflicts in court, since they do not have legal ownership. Lack of information on income prevents governments from collecting taxes and acting for the public welfare.

In its special May 1999 issue, Time Magazine named de Soto as one of the “five leading innovators of the century” while Forbes’ 85th anniversary edition named him as one of the fifteen innovators “who will reinvent your future”.

In May 2015, de Soto attended the 1st Annual Block Chain Summit hosted by British billionaire, Richard Branson, at this private Caribbean residence, Necker Island. De Soto was one of three moderators along with a former WSJ columnist and an editor of The Economist.

Byrne, who owns 40% of Overstock’s equity with other family members, has committed himself for five years to set up the blockchain property registry. The FT reviews the three options for selling Overstock which Byrne is mulling.

One option is selling Overstock’s retail business to a bricks and mortar company seeking a strong online presence, to avoid disruption by Amazon. “Really, since this summer there’s a mass freak-out in corporate America,” Mr Byrne observed.

The second is for the entire company to be bought by or take a large investment from a multibillion-dollar investment fund that does not “want to cede the earth to Amazon”. Mr Byrne claimed that one such fund had approached the company two months ago. He would not name the fund, but hinted that interest from Asia was especially strong.

The third option is to be bought out by a large private equity firm, which would allow Mr Byrne to step away from Overstock to pursue the De Soto project. Mr de Soto, a recipient of the $500,000 Milton Friedman Prize from the Cato Institute, a conservative think-tank, was linked to a land registry blockchain project with the Republic of Georgia in April 2016. But he says that after the inauguration ceremony, he was not consulted further.

The combination of Byrne and de Soto could be powerful force for good, exploiting blockchain technology in a positive way for free market capitalism. However, they will no doubt have to contend with central planners and central bankers who will attempt to hijack the technology for collectivist purposes. This was Ronald Reagan’s view on de Soto’s work.

"De Soto and his colleagues have examined the only ladder for upward mobility. The free market is the other path to development and the one true path. It is the people"s path… it leads somewhere. It works.”

 

What Life Is Like For A Million People In Puerto Rico Who Still Don"t Have Power

Authored by Daisy Luther via The Organic Prepper blog,

If you ever wondered what it would look like if the grid collapsed here on the mainland, the island of Puerto Rico is a tragic, real-life case study.

These stories show us what life is like for more than a million people who STILL don’t have power and running water nearly 3 months after Hurricanes Irma and Maria devastated their communities.

According to a website showing the status of utilities on the island, four months after two hurricanes wrought havoc, 32% of Puerto Ricans are still without power and nearly 10% are still without running water. However, even those who have running water must boil it.

But statistics don’t tell the real story.

At first, it was a war zone.

In the first days after the grid went down, chaos ruled. I vetted as many of the stories as I could and concluded:

…there is very little food, no fresh water, 97% are still without power, limited cell signals have stymied communications, and hospitals are struggling to keep people alive. There is no 911. Help is not on the way. If you have no cash, you can’t buy anything. As people get more desperate, violence increases. (source)

A friend wrote this post about her family on Puerto Rico:

“My family has lost everything. My uncle with stage 4 cancer is in so much pain and stuck in the hospital. However, conditions in the island are far worse than we imagined and my greatest fear has been made reality. The chaos has begun. The mosquitos have multiplied like the plague. Dead livestock are all over the island including in whatever fresh water supplies they have.

 

My family has been robbed and have lost whatever little they had left. The gang members are robbing people at gunpoint and the island is in desperation. People are shooting each other at gas stations to get fuel.

 

They’re telling us to rescue them and get them out of the island because they are scared for their lives. We’re talking about 3.5 million people on an island, with no food, no drinking water, no electricity, homes are gone. Family if you have the means to get your people out, do it. This is just the first week. Imagine the days and weeks to come. These are bad people doing bad things to our most vulnerable.

 

Imagine a few weeks with no resources and the most vulnerable become desperate. What are you capable of doing if your children are sick and hungry? We have to help.” (source)

Other outlets told the same stories. Jeffrey Holsman wrote a guest post for USA Today, sharing what he was witnessing.

The sounds of automatic weapons firing were audible Tuesday evening in San Juan. We were told the National Guard had arrived, but I hadn’t personally seen a Jeep or uniform in the streets yet.

 

Total darkness has swallowed Puerto Rico, as it has every night since the 12-hour monster Hurricane Maria roared across the island with more than 20 inches of rain and 155 mph winds. I’ve never experienced anything like it: wind and rain from every direction, pounding continuously.

 

Now, a war zone best describes what’s left of what was once an emerald green gem in the Caribbean…

 

…after Maria, we face hours upon hours of waiting in lines for gas that might not be there; hours waiting in bank and ATM lines for money that might not be there; hours waiting in grocery store lines for food that might not be there. (source)

It only took a few days before people began to become ill from the tainted water. There were many injuries related to the storm, as well as the aftermath, and these crises were compounded by the lack of medical assistance.

Only 11 of 69 hospitals on Puerto Rico have power or are running on generators, FEMA reports. That means there’s limited access to X-ray machines and other diagnostic and life-saving equipment. Few operating rooms are open, which is scary, considering an influx of patients with storm-related injuries. (source)

People were unable to acquire essential medications and treatments like dialysis.

And this was only the beginning.

One month after the disaster…

A month after Hurricane Maria, the situation was still very grim. Three million residents were still without electricity and one million were without running water. (source) Officials reported 54 deaths attributed to the hurricane but many said that the number was far higher. The mayor of San Juan said that the number of cremations had doubled and put the actual casualties at closer to 500 people.

She said: “It appears, for whatever reason, that the death toll is much higher than what has been reported. What we do know for sure is that people are being catalogued as dying…natural deaths”.

 

She explained that some of the deaths relating to the hurricane were being reported as “natural causes” because the storm was the secondary factor in their death.

 

For example, some people reportedly suffocated after their respirators stopped due to the power cut…

 

…The bodies were cremated before the medical examiner could determine whether they should have been included in the official death toll.

 

Accurate information about the figure is particularly important in the US because if a person dies in a natural disaster, their family has the right to claim federal aid. (source)

Evelyn Milagros Rodriguez, a librarian at the University of Puerto Rico wrote a first-person account of the aftermath during the first month post-Maria. She reported that the books, computers, and furniture at the library were mostly ruined and that mold had invaded the building. Here’s an excerpt from her story:

What outsiders are unable to see, perhaps, is that an entire culture has arisen around the catastrophe caused by Hurricane Maria – one with typically catastrophic traits: material scarcity, emotional trauma, economic catastrophe, environmental devastation.

 

Puerto Ricans are now facing a dramatically different way of life, which means our relatives and friends in the diaspora are, too.

 

Nothing about life resembles anything close to normal. An estimated 100,000 homes and buildings were demolished in the storm, and 90 percent of the island’s infrastructure is damaged or destroyed. Not only are there shortages of water and electricity but also of food, highways, bridges, security forces and medical facilities.

 

It’s dangerous to venture outside at night. An island-wide curfew was lifted last week, but without streetlights, stoplights or police, driving and walking are dangerous after dark.

 

The official tally of missing people varies, with police tallies ranging from 60 to 80 right now. Considering Puerto Rico’s hazardous conditions and limited health care services, that number is sure to rise. We are well aware that epidemic diseases, including leptospirosis and cholera, could come next. Health concerns are further stoked by the delays and disarray of the various federal agencies tasked with handling this emergency. (source)

Leyla Santiago, a CNN journalist who had been born in Puerto Rico and still has family there, echoed the librarian’s story in her own report.

Puerto Rico has also changed forever.

 

The struggles are everywhere. And where there is help or supplies, there are lines, always lines.

 

Some days, it would be people lining up for gas. And then for food at the supermarket. The longest lines were now to use the ATM.

 

I became numb to the lines quickly.

 

When we passed another long one at the port, I didn’t think anything of it. Until it hit me.

 

Thousands were lining up to leave Puerto Rico. I watched as an old man dragged an oxygen tank, while pleading with organizers to let him on that massive cruise ship now acting as a refugee transport. Another man lifted his shirt to show the scars from an operation, hoping it would convince the right people that he needed to get off the island. (source)

Although unthinkable, it’s even worse in more remote areas of Puerto Rico. Despite their preparations, Rosana Aviles Marin’s elderly parents’ lives were devastated in their central mountain village.

The winds of up to 155 miles per hour that roared across the island buckled the house’s walls and tore holes in the ceiling, letting in water that destroyed furniture, framed photos of Marin and her siblings, and brightly colored ceramic statues of Jesus.

 

That wasn’t all it destroyed. The storm also downed power lines throughout the area, and Marin and her parents have been entirely without electricity for weeks. Much of their food went bad, they have no cellphone service, and local markets and restaurants remain closed. Her parents use a small diesel generator to power lights and, for a few hours per day, a small refrigerator. The rest of the time, she tells me during a recent trip to the area, “my parents live in darkness.” (source)

The island’s major source of revenue has been tourism, and that has all but stopped since the hurricane. Considering how badly they were struggling economically before, that is just another blow to a place driven to its knees.

The narrow blue cobblestone streets of Old San Juan are deserted. Cigar shops are boarded up. Boutiques in bright colonial buildings are closed...

 

...About a third of the hotels in Puerto Rico remain shuttered. Restaurants and shops are still without power. Beaches are closed for swimming because of possible water contamination.

 

The high season begins in December, and tourism officials are hoping to lure some visitors, but that depends on when power is fully restored and how quickly hotels and attractions can repair the catastrophic damage. (source)

It’s a Catch-22. Until the tourists return, many won’t be able to afford to restore their businesses. But until they restore their businesses, the tourists won’t return.

Two months after…

Two months to the date after Maria struck with a vengeance, only half of the residents of the island had power. The return of infrastructure began in the cities and wealthier areas. Those in poor or remote areas are still waiting. 

Here’s a video of what it looks like in Puerto Rico right now as people struggle to restore electricity.

Billions of dollars were allocated by the government and millions has come in from private donors.

 

Politicians have been in and out of the island and that has led to a spending law that provides $5 billion for Puerto Rico’s recovery and billions for government agencies providing disaster assistance. Projections are that a lot more will be needed.

 

On top of that, millions has been raised and contributed by private groups and foundations and individuals.

 

Cruz (the mayor of San Juan) said people from around the United States have been sending small donations, money orders, $50 or $10 attached to cards or pieces of paper. Some gave as much as $300 to $500.

 

“We’re going to use it to rebuild homes, to make sure people have good drinking water, because even if it comes out of a faucet it has to be drinkable, to schools for children. Some of the schools have been in really bad shape. Twenty-five percent of what comes into the foundation goes to other towns outside of San Juan,” she said. (source)

At two and a half months post-hurricane, PBS reported the following statistics:

• 66 percent of power on the island has been restored


• 93 percent of the island has access to water, but it remains on a boil advisory


• 73 percent of cell sites are up and running


• 982 survivors remain in 41 shelters across the island

The island still looks like a war zone.

Trash and debris from the storm remain a rampant problem. The U.S. Army Corps of Engineers reported it has removed more than 639,000 cubic yards of debris. But it is still tasked with removing at least 2.7 million remaining cubic yards. (source)

Residents of the island are without resources and are at the mercy of FEMA…and government funding.

Democratic Sens. Bernie Sanders and Elizabeth Warren unveiled a bill that would provide $114 billion in aid to Puerto Rico and the U.S. Virgin Islands…

 

[But] the package is unlikely to get a vote, analysts say

 

Meanwhile, more than 200,000 people from Puerto Rico have arrived in Florida since Maria hit, according to the Florida Division of Emergency Management.

 

FEMA is now moving from response to recovery mode. FEMA is still providing daily food, fuel, and water to survivors of Maria, the longest such sustained distribution after a disaster in FEMA history. (source)

You can get more details about the proposal here.

And now, the return of electricity has been further delayed.

Previously, Puerto Rican officials estimated that the island would have electricity again by December? It turns out they were wrong. Now it looks like everyone in Puerto Rico won’t have power until February… at the earliest.

PREPA acting Director Justo Gonzalez cited “natural” and hurricane damage to the power grid that was initially unidentified as the reason for the delay of power generation.

 

Others have said full power and other utilities will not be completely restored until March. (source)

Between Puerto Rico’s economic problems and an aging grid, this isn’t a speedy process.

Before the storm hit, I wrote an article predicting at least a 6-month wait before power was restored, and this was for a variety of reasons. I cited Philipe Schoene Roura, the editor of a San Juan, Puerto Rico-based newspaper, Caribbean Business, who wrote of the many reasons that it would take so long:

“The lifespan of most of Prepa’s equipment has expired. There is a risk that in light of this dismal infrastructure situation, a large atmospheric event hitting Puerto Rico could wreak havoc because we are talking about a very vulnerable and fragile system at the moment,” Ramos added…

 

…Francisco Guerrero (a fictitious name to protect his identity), a Prepa field worker for 23 years, said it would take months for Prepa to bring up Puerto Rico’s power system should a hurricane like Harvey strike the island.

 

The lack of linemen and other technical personnel, as well as a lack of equipment—including replacement utility poles for powerlines and replacement parts—are the issues of greatest concern among public corporation employees, who say they risk their lives working with equipment in poor condition that provides them with little safety.

 

Guerrero said that today only 580 linemen remain out of the 1,300 who were part of the workforce in previous years—and that’s not counting the upcoming retirement of another 90 linemen. Likewise, he said there are only 300 electrical line testers to serve the entire island.

 

The source also said that much of Prepa’s equipment dates back to the 1950s—and the more “modern” equipment that is still functional dates from the 1990s; in other words, it’s from the past century.

 

“If a hurricane like this one [Harvey] hits us, the system is not going to come online, I’d say, in over six months. Right now, the warehouses don’t even have materials. I’m talking about utility poles and other stuff,” Guerrero explained. (source)

It turns out that Rora was not exaggerating. But money and a dilapidated system aren’t the only problems. There is an issue of geography as well.

Puerto Rico’s biggest power generators are on the south of the island, but most of its inhabitants live on the north side, primarily in San Juan. There are four high-capacity transmission lines that carry power from the south to the north, and they pass through the center part of the island, the region Marin calls home. The problem is that central Puerto Rico is mountainous, full of huge swaths of thick forest, and mainly reachable only by driving on terrifyingly narrow dirt roads.

 

That makes it hard to reach those four vital lines even in the best of circumstances. In post-Maria Puerto Rico it’s even harder, because the center of the island was the region hardest hit by the hurricane. Since the government is trying to get power to San Juan first, that means those in the regions devastated most by the hurricane will be waiting the longest for power to be restored. Sánchez, the engineer, says workers would need to be flown in by helicopter to clear debris before repairs could even begin. (source)

Would you be prepared for something like this?

If you think something like this couldn’t happen to us on the mainland, you’re deluding yourself.

Our grid isn’t in fantastic shape either. For years, people in the know have been warning that our electrical infrastructure is aging and unstable. It would cost us a mindboggling 5 trillion dollars to replace the decrepit system, and age isn’t the only threat. The possibility of an EMP strike could take it down permanently (and that threat seems more real every day as tensions with North Korea rise.) If our grid was taken down by such an attack, it could kill 90% of Americans within the first year.

We would lose

• Power.


• Refrigeration.


• Heating and cooling.


• Our economy.


• Fresh, running water.


• Medical care.

The list could go on and on.

Few people would be ready for an event that took out the entire infrastructure for an extended period of time.  I personally lean toward a more low-tech plan for long-term scenarios like this. (For one reason, look how difficult fuel is to come by in Puerto Rico right now.)

Learning from the real-life experience of others give us just a glimpse of what we could expect.

US Coast Guard Operates Secret Floating Prisons In Pacific Ocean

Last week, Seth Wessler wrote a story for the New York Times, in which he described “terror on the high seas”: an expansion of the maritime war on drugs, the U.S. Coast Guard is operating a fleet of secret floating prisions in the Pacific Ocean. Coined “floating Guantanamos”, Coast Guard cutters have been deployed as far as 3,000 miles miles away from the nearest U.S. port, to international waters from Central America to South America in a bid to bust drug smugglers.

Wessler writes about a number of men who were detained by the U.S. Coast Guard and imprisoned on the cutters for weeks or months at a time. The practice of capturing smugglers and turning them back to their governments changed in 2012, when the Defense’s Southern Command, tasked with leading the war on drugs in the Americas, launched a multinational military campaign called Operation Martillo, or “hammer.” Post 2012, Coast Guard cutters cruise around the Pacific picking up smugglers who will then be admitted to U.S. courts.

According to Wessler, the U.S. Coast Guard never intended to operate floating prisions, but thanks to U.S. marintime law, drug smuggling in international waters is considered a crime against the U.S (even if there is no proof), making the possibility of floating prisions legal. Once detained, conditions for the smugglers are quite rough, often kept on US vessels for weeks or months on end– chained to anything, usually on the ships’ decks exposed to the bare elements.

The Coast Guard has a humanitarian public image, celebrated in local newspapers for rescuing pleasure boaters off Montauk or hurricane survivors in Florida. But as the lone branch of the military that serves as a law-enforcement agency, the 227-year-old service has also long been in the business of interdicting contraband, from Chinese opium smugglers to Prohibition rumrunners. For centuries, Coast Guard operations waited to arrest smugglers once they crossed into U.S. territorial waters. Then, in the 1970s, as marijuana trafficking ballooned on the route from Colombia into the Caribbean before arriving in the United States, Justice Department officials argued to Congress that current U.S. law constrained law enforcement’s ability to punish drug smugglers caught on the high seas. While the Coast Guard, then a branch of the Department of Transportation, could chase smugglers into the Caribbean, Justice Department lawyers could rarely hold smugglers caught in the legal gray zone of international waters criminally liable in U.S. courts.

 

Congress responded by passing a set of laws, including the 1986 Maritime Drug Law Enforcement Act, that defined drug smuggling in international waters as a crime against the United States, even when there was no proof that the drugs, often carried on foreign boats, were bound for the United States. The Coast Guard was conscripted as the agency empowered to seek out suspected smugglers and bring them to American courts.

 

In the 1990s and through the 2000s, maritime detentions averaged around 200 a year. Then in 2012, the Department of Defense’s Southern Command, tasked with leading the war on drugs in the Americas, launched a multinational military campaign called Operation Martillo, or “hammer.” The goal was to shut down smuggling routes in the waters between South and Central America, stopping large shipments of cocaine carried on speedboats thousands of miles from the United States, long before they could be broken down and carried over land into Mexico and then into the United States. In 2016, under the Southern Command’s strategy, the Coast Guard, with intermittent help from the U.S. Navy and international partners, detained 585 suspected drug smugglers, mostly in international waters. That year, 80 percent of these men were taken to the United States to face criminal charges, up from a third of detainees in 2012. In the 12 months that ended in September 2017, the Coast Guard captured more than 700 suspects and chained them aboard American ships.

Wessler details the extent of his investigation below, which provides an eye-opening view of the extent of America’s secret extraterritorial war on drugs,

Over the last year, I’ve interviewed seven former Coast Guard detainees, some of whom are still in American federal prison, and received detailed letters, some with pencil renderings of the detention ships, from a dozen others. Most of these men remain confounded by their capture by the Americans, dubious that U.S. officials had the authority to arrest them and to lock them in prison. But it is the memory of their surreal imprisonment at sea that these men say most torments them. Together with thousands of pages of court records and interviews with current and former Coast Guard officers, these detainees paint a grim picture of the conditions of their extended capture on ships deployed in the extraterritorial war on drugs.”  

PBS NewsHour interviews Seth Wessler, where he speaks about the 700 suspected drug smugglers imprisoned on Coast Guard cutters between September 2016 through 2017.

Mapping The Richest People In The World

A few weeks ago, HowMuch.net detailed the richest person on each continent. Today, we take this one step further to show you the richest person in each country, according to Forbes.

Source: HowMuch.net

First off, Bill Gates is not on our list. Why? Because Jeff Bezos is officially worth more than him. Amazon has made some recent high-profile business decisions, including the acquisition of Whole Foods and announcing a competition for the location of a second headquarters. Bezos’ fortune is specifically tied to the price of Amazon’s stock. He’s been in first place and fallen behind Mr. Gates before, but for now, he remains in the top spot. Carlos Slim Helu ($61.9B) and David Thomson ($26.9B) round out the continent, although we should mention the richest billionaire in the Caribbean too: Jacky Xu, who made his money in the apparel industry.

Turning to Europe gives us a more diverse group of billionaires from a wide range of industries.

Source: HowMuch.net

Amancio Ortega from Spain takes the top spot with a fortune of almost $75 billion, followed by Bernard Arnault at just under $63 billion. These two men are in the top the five richest people in the world. We should note that the countries in what used to be Yugoslavia are missing from our list, as are many places in Eastern Europe. These economies still have a long way to go before they produce ultra-rich billionaires.

The situation in the Middle East and Asia reflects the industries dominating these local economies.

Source: HowMuch.net

Russia’s richest person, Alexey Mordashov, made his fortune in steel and investments, while the richest tycoon in Kazakhstan, Vladimir Kim, made his money in mining. China’s and Japan’s wealthiest billionaires both made their way through technology companies, and Philip Ng from Singapore made his money through real estate. Interestingly, the countries west of China stretching toward Syria don’t have any billionaires on our list.

About half the countries in South America are rich enough to produce multi-billionaires, three of whom come from the finance and banking industries.

Source: HowMuch.net

Jorge Paulo Lemann is the richest among the group with a net worth of almost $30 billion. He made his money by investing in breweries, which through a series of mergers and acquisitions became AmBev.

The situation in Africa is telling.

Source: HowMuch.net

Only eight people make our list of billionaires, many of whom come from old industries like construction, diamonds and food. Only two people are from the banking and investment industries. Most importantly, look at all the countries with a light shade of green. Our map indicates at a quick glance how far Africa needs to go in terms of developing its economies.

Oceana contributes four people to our list, and they all have more than $10 billion through a variety of industries.

Source: HowMuch.net

Budi Hartono for instance boasts a fortune of $11.5 billion and has a background in banking and tobacco, and Gina Rinehart ($16.8B) from Australia made her money in mining.

*  *  *

Take a look at our list breaking down the ten richest people in the world regardless of where they live, together with their estimated net worth ($ billion), how they made their money, and where they live.

1. Jeff Bezos: $95.1B - Amazon.com in United States ($100.3 Billion as of Friday)

2. Amancio Ortega: $74.4B - Zara in Spain

3. Carlos Slim Helu: $64.9B - Telecom in Mexico

4. Bernard Arnault: $62.9B - LVMH in France

5. Ma Huateng: $43.4B - Internet media in China

6. Mukesh Ambani: $39.2B - Petrochemicals, oil & gas in India

7. Li Ka-shing: $33.8B – Diversified endeavors in Hong Kong

8. Maria Franca Fissolo: $30.2B - Nutella, chocolates in Italy

9. Jorge Paulo Lemann: $30.1B - Beer and Brazil

10. Beate Heister & Karl Albrecht Jr.: $29.2B - Supermarkets in Germany

Consider this fact. If you add together the fortune of these ten people, you’d have over half a trillion dollars. That’s a ton of money, and the big lesson is that billionaires can come from a variety of different industries. But once again, what’s the missing continent with the furthest to grow? Africa. 

How Columbus Revolutionized The Global Economy

Authored by Ryan McMaken via Mises Canada,

Columbus Day this year brought with it the usual acrimony, and this Salon article hit the usual talking points by declaring European settlement of the Americas to be “the most massive act of genocide” in world history.

Salon quotes historian David Stannard who writes:

“[O]n average, for every 20 natives alive at the moment of European contact — when the lands of the Americas teemed with numerous tens of millions of people — only one stood in their place when the bloodbath was over.”

Figures like these remain hotly debated, but few disagree that, ultimately, the number of natives was extremely small when compared to the overall size of the Americas.

In other words, the number of people relative to the amount of natural resources in the New World was tiny, and population density in the Americas continues to be low by global standards even today.

While many pundits and historians commonly debate the violent conflicts between tribes and settlers in the popular media, we hear far less from scholars who take a serious look at the economic implications of the relatively underpopulated lands in the Americas.

The Americas are Different

There is a growing scholarship on the economic history of the Americas and on so-called “frontier states.”

Over the past century, scholars have noted that frontier regions in places like the Americas, Australia, and Eastern Russia are, in fact, different economically, politically, and sociologically from other parts of the world where the local ethnic population has — in many cases — occupied the lands for centuries.

This is not the case in the Americas where new groups of people settled on lands once held by completely different groups with different customs, economic practices, and institutions. The movement of peoples onto frontier lands, and the exploitation of natural resources there, has shaped the economic and political realities of today.

This scholarship on frontier settlement arguably began with Frederick Jackson Turner and his “Turner Thesis,” which was first advanced in 1893.

Turner focused primarily on the experience of the United States, but Walter Prescott Webb would attempt to develop these ideas into a more universally applicable set of ideas in his 1951 book The Great Frontier. For Webb, “the great frontier” included not just North America, but also Australia, New Zealand, and South Africa. (Later historians would add Eastern Russia to this list.)

Since then, most historians working on the issues of frontier history have attempted to either build upon the work of Webb and Turner, or to refute them. In either case, however, there is a recognition that frontier states are something different, and that the high period of frontier settlement, from 1500 to 1900, revolutionized the global economy and global demographics.

What is a Frontier State?

Frontier states are - to use a definition employed by political scientist Roberto Foa - “countries that in recent centuries have extended rule over new territories adjacent to their core regions.”

Economist Edward Barbier, in his book, Scarcity and Frontiers, adds that these regions are also characterized by a small labor force relative to the amount of land and natural resources available. That is, frontier areas are notable for experiencing labor shortages which lead to a wide variety of political and demographic outcomes.

Immigration and Slavery

Consider the problem a land owner faces in a frontier setting. He or she sees abundant farm land for crops, or mountain lands for mining. At the same time, there are few people in the area to plant and harvest the crops, or dig the mines. As noted by many historians of the native tribes, of course, the indigenous population had already been decimated by disease and military conflict. Unlike the situation in Africa, India, and East Asia, settlements in the Americas found themselves with large tracts of land inhabited by few people.

The solution to this economic problem, of course, is to bring in more abundant labor. This can be done through several means. First, of all, an owner (whether the owner be a private party or a state organization) can convince settlers to voluntarily move to a new region. A variety of different strategies have been employed in the New World in this regard. In early decades, North American colonies often relied on indentures servants who were held to a period of servitude in exchange for the cost of transporting the immigrant to the New World. The laborer, of course, was drawn by the prospect of obtaining freedom at the end of the contracted period. Later, the US used the Homestead Acts and land-sales schemes to attract settlers to frontier lands. Canada employed similar tactics. In Argentina, on the other hand, the Argentinian state actively subsidized the migration of immigrants from Italy to South America in the late 19th and early 20th centuries. Throughout the Americas, settlers relocated from Europe in a search for relatively cheap lands or as a hoped escape from the social and economic ailments of the Old World.

Today, surnames throughout the Americas remind us of the pan-European flavor of immigration in the region. One need only peruse a list of Latin American heads of state to see names such as Michelle Bachelet, Pedro Kuczynski, Cristina Kirchner, Vicente Fox, and others.

Nor was voluntary migration limited to Europeans. By the 19th century, Chinese laborers attempted to take advantage of labor shortages in California, and Japanese laborers did the same in California, Brazil, and Peru. As slaves were emancipated in Cuba, tens of thousands of Chinese workers were imported to replace them.

In many cases, though, immigration was not sufficient to bring down wages to a level preferred by owners and their government allies. Thus, the politically powerful turned to slavery instead. Naturally, imported slave labor would depress wages for both the slaves themselves and for the existing free population that preceded the slaves. This tactic was especially useful in cases where manual labor was particularly difficult, as in the case of the sugarcane fields of the Caribbean or the cotton plantations of the American South. The greatest importer of slaves, however, was Brazil where slaves would, for a time, greatly outnumber the European-descended population.

What began as a basic labor-shortage “solution” would evolve over time into a major sociological and political issue that colors politics to this day. And, contrary to what many naïve American leftists seem to think, the issue of slavery and racial politics is anything but unique to the United States. It is a characteristic of frontier states across the globe. Moreover, we might note slavery in the Americas was hardly attributable to the settlers being especially inhumane in their practices relative to other societies at the time. What was different in the Americas was this: the relative abundance of land and capital relative to labor made slavery pay much more relative to other parts of the world. There’s a reason the Spanish home country abolished slavery decades before slavery was abolished in Cuba. It simply paid more in the Caribbean.

Effects on Europe

The new lands themselves weren’t the only areas affected, of course. As Webb noted, the Europeans were “transformed” by the settlement of these new lands. This became all the more obvious as Western Europe’s population began to explode in the Early Modern period and into the 19th century. The abundance of land in the Americas created an easy “solution” for European politicians who could simply encourage (either through exhortation or financial subsidization) troublesome social classes to emigrate across the ocean. The British actively shipped criminals to their colonies across the sea, and certainly the large scale movement of laborers from desperately poor places — like southern Italy and Ireland during the 19th century — transformed the demographic and political realities of those regions.

Even in the face of imported slave labor, the relatively low density of workers in the New World allowed for a constant re-adjustment of wages in both Europe and the colonies as the population exodus to the New World increased workers scarcity — and therefore wages — back in the countries of origin.

Meanwhile, those who remained in Europe took advantage of the vast raw materials found in the Americas, including the region’s many fisheries, mining operations, and plantations.

Implications for Today

We continue to see the effects of the New World’s frontier origins in modern politics. Given the relatively recent histories of their populations, the social dynamics of the Americas are quite different from that of Europe.

In spite of recent claims that Europe is being erased by immigration from the Near East and Africa, the fact is that Europe remains far more culturally uniform than is usually the case in any modern post-frontier state. While the United States is, for example, 70-percent European in origin, most European countries remain at least 90 percent “white.” Not even Canada, which is is much more “European” than the US — with only 19 percent of its population listed as “visible minority” — comes close to the sort of cultural uniformity that is today common in the nation states of Europe.

Latin America, of course, is far more diverse still, with Brazil, for example, reporting less than 40 percent of its population as being primarily of European ancestry. The legacy of imported slaves and surviving indigenous populations remains an undeniable factor in Brazilian politics today. Only Russia — itself a recent frontier state — comes close to experiencing a similar situation in ethnic demographics.

Thus, it is “cute” when Europeans lecture Americans (including Latin Americans) about “tolerance” and “openness” when history suggests that it is the denizens of the New World who know far more about such things than the Europeans who stayed home and attempted to exploit those who made the hard journey to frontier lands. It was, after all, the European regimes that exported their political problems to the New World and happily profited from the exploitation of slave labor to supply Europe with sugar and other staples. It was the residents of the Americas themselves who had to deal first-hand with these issues, including broader demographic trends. The fact that the US population quintupled between 1830 and 1900, for example, was certainly no small affair. As historian Jon Grinspan notes, during this period, “at least 18 million immigrants arrived from Europe, more people than had lived in all of America in 1830.” Given the propensity for world war displayed by Europeans over the past century, one can only guess with extreme trepidation how a similarly destabilizing situation would be faced by Europeans in the modern world.

But many other issues in New World political realities are a legacy of its frontier past as well. Foa writes:

Frontier zones are found to have ongoing lower levels of public order and deficient public goods provision. Several theories [may] explain this discrepancy, including internal resettlement, costs of monitoring and enforcement, and the relationship between settlers and the indigenous population.

When American states are criticized for being “low-trust” societies, lacking social cohesion, and experiencing relatively high crime rates, these all stem from the realities of the New World’s lack of cultural uniformity and common history among residents. Non-frontier societies have had centuries to become more uniform and more cohesive. New World societies still have a long way to go.

It’s a safe bet that Columbus had no idea the social and economic revolution he was setting off by beginning Europe’s drive toward the “Great Frontier.” He just wanted to get rich. But, we are still living with the legacy of Europe’s expansion to these new lands today.

Science Tells Us This Is All True

Authored by Simon Black via SovereignMan.com,

On April 30, 1934, under pressure from Italian-American lobby groups, the United States Congress passed a law enshrining Columbus Day as a national holiday.

President Franklin Roosevelt quickly signed the bill into law, and the very first Columbus Day was celebrated in October of that year.

Undoubtedly people had a different view of the world back then… and a different set of values.

Few cared about the plight of the indigenous who were wiped out as a result of European conquest.

Even just a few decades ago when I was a kid in elementary school, I remember learning that ‘Columbus discovered America’. There was no discussion of genocide.

It wasn’t until I was a sophomore at West Point that I picked up Howard Zinn’s People’s History of the United States (and then Columbus’s own diaries) and started reading about the mass-extermination of entire tribes.

Columbus himself wrote about his first encounter with the extremely peaceful and welcoming Arawak Indians of the Bahama Islands:

“They do not bear arms, and do not know them, for I showed them a sword, they took it by the edge and cut themselves out of ignorance. They have no iron… They would make fine servants… With fifty men we could subjugate them all and make them do whatever we want.”

And so he did.

“I took some of the natives by force in order that they might learn and might give me information of whatever there is in these parts.”

Columbus had already written back to his investors in Spain, Ferdinand and Isabella, that the Caribbean islands possessed “great mines of gold.”

It was all lies. Columbus was desperately attempting to justify their investment.

In Haiti, Columbus ordered the natives to bring him all of their gold. But there was hardly an ounce of gold anywhere on the island. So Columbus had them slaughtered. Within two years, 250,000 were dead.

Now, this letter isn’t intended to rail against Columbus. Point is, I never learned any of this information in school. Decades ago, no one really did.

But today, people are starting to be aware of what Columbus did. And our values are vastly different today than they were in 1937. Or in 1492.

Decades ago… and certainly hundreds of years ago… the idea of a ‘superior race’ still prevailed, endowed by their creator with the right to subjugate all inferior races.

This readily-accepted belief was the pretext of slavery and genocide.

Even as recently as the early 1900s, there were entire fields of ‘science’ devoted to studying the technical differences among various races and drawing data-driven conclusions about superiority.

Phrenologists, for example, would take precise measurements of people’s skulls– the circumference of the head, the ratio of forehead to eyebrow measurements, etc.– and deduce the intellectual capacity and character traits of entire races.

Jews could not be trusted. Blacks and Asians were inferior. These assertions were based on ‘scientific evidence’, even in nations like Sweden, the United Kingdom, and United States.

Today we’re obviously more advanced than our ancestors were. We know that their science was complete bullshit, and our values are totally different.

There are entire movements now (particularly among university students) to remove statues, rename buildings, and re-designate holidays.

Frankly this is a pretty slippery slope. If we judge everyone throughout history based on our values today, we’ll never stop tearing down monuments.

Even someone as forward-thinking as Thomas Jefferson owned slaves. And that’s a LOT of elementary schools to rename.

More importantly, there will come a time in the future when our own descendants judge us harshly for our short-sighted values.

Fortunately we no longer have faux-scientists today writing dissertations about racial superiority.

But we do have entire fields of ‘science’ that will truly bewilder future historians. Economics is one of them.

Our society awards some of its most distinguished prizes for intellectual achievement to economists who tell us that the path to prosperity is to print money, raise taxes, and go into debt.

Economists tell us that we can spend our way out of recession, borrow our way out of debt, and that there will never be any consequences from conjuring trillions of units of paper currency out of thin air.

They created a central banking system whereby an unelected committee of economists possesses nearly totalitarian control of the money supply… and hence the power to influence the price of EVERYTHING– food, fuel, housing, utilities, financial markets, etc.

Economists have managed to convince the world that inflation, i.e. rising prices, is actually a GOOD thing… and that prices quadrupling and quintupling during the average person’s lifespan is ‘normal’.

They’ve also succeeded in making policy-makers terrified of deflation (falling prices) even though just about any rational individual would naturally prefer falling (or at least stable) prices to rising prices.

Economists make the most ridiculous assertions, like “The debt doesn’t matter because we owe it to ourselves…” as if it’s perfectly acceptable for the US government to default on its citizens.

Or that the US economy is so strong because the American consumer spends so much money, i.e. consumption (and not production) drives prosperity.

The public believes all this nonsense because the ‘scientists’ say it’s true.

The scientists also come up with fuzzy mathematics to support their assertions. Last Friday, for example, the Labor Department reported that the US economy lost 33,000 jobs in September.

Yet miraculously the unemployment rate actually declined, i.e. fewer people are unemployed despite there being fewer jobs in the economy.

None of this makes any sense. Fewer jobs means lower unemployment. Spend more money. Print more money. Borrow more money. Debt is wealth. Consumption is prosperity.

All of this is based on ‘science’.

We may rightfully take umbrage with the values and ideas of our ancestors.

But it’s worth turning that mirror on ourselves and examining our own beliefs… for there will undoubtedly come a time when our own descendants wonder how we could have been so foolish.

Do you have a Plan B?

"Freedom Insurance" Has Never Been More Crucial - How To Get A Second Passport

Authored by Nick Giambruno via InternationalMan.com,

The biggest threat to your personal freedom and financial security is the government, hands down.

Today, skyrocketing government debt is only making that threat worse. In the US, the bill amounts to more than $167,509 per taxpayer.

At some point soon—in a desperate attempt to squeeze citizens for every penny—politicians will try to further restrict people’s movements. They may even prohibit people from leaving outright.

Wealthy people are always the first they trap. New Jersey already hits certain taxpayers fleeing that sinking ship with an “exit tax.”

There’s also a federal exit tax. It’s a significant blow to wealthy people giving up their US citizenship.

But wealthy people (and Americans across the board) are not the only ones at risk.

Many countries have notoriously turned to people controls at one point or another. For example, the Soviet Union routinely revoked the citizenship of its perceived internal enemies.

In Castro’s Cuba, the government made citizens apply for exit visas to leave the island. It did not grant them easily.

Or look at how the US government revoked Edward Snowden’s passport with the stroke of a pen.

This all reinforces a grave truth… You don’t own your passport or your citizenship. The government does. And it can use that as a weapon.

If you hold unpopular political views, don’t be surprised if the government restricts your travel options. The same goes for wealthy people who want to leave a country in financial trouble.

The good news is, you can do something about this problem…

A second passport is your best insurance against any out-of-control government.

You probably know the benefits of diversifying your investment portfolio. If you put all of your asset “eggs” in one basket, you could lose your entire portfolio if that basket breaks.

The same idea applies to political risk… the risk bureaucrats and politicians pose to you.

Most people have medical, life, fire, and car insurance policies. You hope you never have to use these policies. But you have them anyway. They give you peace of mind and protection if the worst comes to pass.

International diversification is the ultimate insurance policy.

I call it “freedom insurance.”

It frees you from dependence on any one country. Achieve that freedom, and it becomes extremely difficult for any one group of bureaucrats to control you. The results can be life-changing.

A second passport is a crucial piece of the puzzle. Among other things, it lets you invest, bank, travel, live, and do business in places you otherwise couldn’t.

Unfortunately, there is no route to a genuine second passport that is fast, easy, and cheap. Deciding the best place and way to get one is not necessarily simple. There is no one-size-fits-all solution.

But today I’ll show you the path of least resistance.

It helps to view the whole world as your hunting ground. Don’t dismiss the idea of becoming a citizen of a small or backward country. Unlike most mega-government countries, these places generally lack the capacity and desire to monitor their citizens or treat them as milk cows.

The Four Roads to a Second Passport

There are exactly four legitimate routes to a valid second citizenship and passport. If you hear about a fifth route, assume it’s a scam.

To find the best route for you, start with the decision tree below.

No matter the country or method, you should be able to point to specific naturalization laws with explicit requirements. Everything should be clearly spelled out in black and white. You’ll usually find this information on a government, consulate, or embassy website.

Route No. 1: Citizenship by Ancestry

If you qualify, a citizenship-by-ancestry program is the fastest and cheapest route.

Each country has its own eligibility requirements and procedures. If you have an ancestor from one of these countries (usually no more remote than a great-grandparent), you should find citizenship information on the country’s website. Or you can visit the consulate.

If you’re eligible, you will need to give the consulate official legal and translated documents (birth certificates, marriage certificates, death certificates, naturalization records, etc.) proving lineage to the relevant ancestor when you apply.

Route No. 2: Economic Citizenship Programs

Economic citizenship is the most expensive route to a second passport. But it’s also the quickest.

You make a substantial payment or investment, and in return, the government grants you full and permanent citizenship. You can often complete the process in a matter of weeks. And you don’t ever need to live in the country.

Currently, the governments of Dominica and St. Kitts & Nevis (two English-speaking countries in the Caribbean) offer the only established and reliable economic citizenship programs. A passport from either government enables visa-free entry to most of Latin America, the Caribbean, and Europe.

Dominica is currently the cheapest option. It requires a donation to the government starting at $100,000. You should also expect additional administrative costs for due diligence, background checks, processing, and other fees. That can amount to at least $10,000.

Other countries also offer economic citizenship programs. But they haven’t been around nearly as long as the Dominica and St. Kitts programs.

A reliable and stable history is important. Ultimately, any government has the authority to revoke the passport and/or citizenship of any of its citizens at any time for any reason, real or concocted.

A shift in the political winds could mean that an economic citizenship program in favor today could be out of favor tomorrow. That could have negative consequences for foreigners who participated in the program.

Only the St. Kitts and Dominica programs have stood the test of time (decades) and been successfully used by thousands of people.

Route No. 3: Extreme Measures

If you’re willing to take extreme measures, there are shortcuts.

You could marry a foreigner. Many countries will grant citizenship to foreign spouses after a period of time, usually at least two years.

France grants citizenship upon completion of military service.

Jews are eligible for Israeli citizenship. However, in most cases, military service is required of applicants over the age of 18.

Brazil offers a shortcut to citizenship for those who adopt a child.

Route No. 4: Residency

So, if the family bloodline leads to a dead end… and you aren’t willing to marry a foreigner, serve in a foreign military, or take any other extreme measures… and you can’t afford an economic citizenship program… the last route is permanent residency.

Most countries will grant citizenship after five or so years of permanent residency. Some take more time, some take less.

Here, again, the time requirement varies widely. And these requirements are constantly changing. Some countries require you to spend substantial time on the ground and build real connections to the country. Others are less stringent.

Some factors you should weigh in considering a country’s program:

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  Required length of residency

  
  


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  Minimum time required in-country during the residency period

  
  


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  Costs and/or mandatory investments

  
  


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  Requirement to demonstrate language proficiency

  
  

A Crucial Step

The easiest route to citizenship in a second country will differ for most people, depending on their personal circumstances. It’s not a fun process any way you slice it, but that should not dissuade you. The benefits far outweigh the costs.

The rules on second passports can change quickly. So it’s important to have the most up-to-date, accurate, and actionable information out there.

Be sure to get our guide we just released on the easiest countries to get a second passport from. Click here to download the PDF.

"This Is Textbook" - Military Officials Defend Trump Administration's Puerto Rico Response

A steady drumbeat of criticism accusing the White House of not doing enough to hasten the federal government’s relief effort in Puerto Rico has metastasized into yet another political dogfight, as President Trump and the White House respond to an outpouring of outrage from celebrities, politicians and local officials over the administration’s purported inaction over the response.

The backlash to what we imagine the media will soon tag as “Trump’s Katrina” began earlier this week when Hillary Clinton and Marco Rubio urged the president to leverage the full might of the US military to aid the disaster response.

But an emotional plea from San Juan Mayor Carmen Yulin Cruz during a press conference late Friday helped elevate the issue to the forefront of the public’s consciousness, eliciting an avalanche of condemnation from celebrities, Democratic politicians, and basically every group that opposed Trump during the election.

"Hamilton" Writer Lin-Manuel Miranda tweeted that Trump would go "straight to hell" for ignoring the Puerto Rican people.

You"re going straight to hell, @realDonaldTrump.
No long lines for you.
Someone will say, "Right this way, sir."
They"ll clear a path. https://t.co/xXfJH0KJmw

— Lin-Manuel Miranda (@Lin_Manuel) September 30, 2017

During her remarks, Cruz – who was standing in front of palates full of water, food and supplies – described the situation in Puerto Rico as something akin to “genocide” before blasting the administration for its allegedly sluggish response to the disaster, drawing a harsh response from Trump, which served only to further elevate the controversy.

The media quickly piled on, with the Washington Post publishing yet another “bombshell” report calling out Trump for choosing to spend last weekend at his golf club in Bedminster, N.J., which the paper alleged contributed to the inadequate disaster response.

But while the backlash to Trump’s remarks has been swift and loud, assessments of the administration’s handling of the response by military officials (people with disaster-recovery experience) have been notably more measured.

Army Lt. Gen. Jeff Buchanan said Friday morning that the Pentagon has 10,000 people helping with the response to Hurricanes Maria and Irma – an unprecedented number. But even that number isn’t enough, he said. Fortunately, the Defense Department is sending more, according to Army Lt. Gen. Jeff Buchanan, who was recently appointed to be the DoD’s liaison with FEMA.  

“We"re certainly bringing in more [troops]," Buchanan said on CNN’s “New Day.”

"For example, on the military side, we"re bringing in both Air Force, Navy, and Army medical capabilities in addition to aircraft, more helicopters. ... [But] it"s not enough, and we"re bringing more in.”

As the Hill points out, the Pentagon initially sent 4,000 troops to help in rescue and restoration efforts to Puerto Rico and the Virgin Islands, but it wasn’t until Thursday, eight days after Maria slammed the Caribbean, that US Northern Command (Northcom) sent Buchanan. However, at least one administration official quickly pointed out that the early phases of the relief effort had been coordinated by the Navy, and that Buchanan"s appointment coincided with FEMA taking the reins of the recovery effort.

However, Tom Bossert, Trump’s homeland security adviser, defended the lag between when the storm hit and when Buchanan was appointed.

“It didn’t require a three-star general eight days ago,” Bossert said of the government response.

When asked whether it was a mistake to not have Buchanan on the ground in Puerto Rico earlier, Bossert replied, “No, not at all.”

“In fact, that doesn’t affect the way that we stage equipment and the way we area command and field operational command. This is textbook and it’s been done well,” Bossert told reporters Thursday at the daily White House press briefing.

Indeed, while the media and Trump’s political opponents have implied that the administration waited until this week to organize a meaningful response to the disaster, in reality, the Pentagon has been steadily increasing its help to Puerto Rico and the Virgin Islands after both were slammed by the two Category 5 storms. The Pentagon began deploying more resources early this week, opening a second airfield at the former Naval Station Roosevelt Roads, preparing the hospital ship USNS Comfort to deploy from Norfolk and establishing a caravan of cargo jets filled with equipment and supplies.

As we’ve reported many times, Hurricane Maria - following just two weeks behind Hurricane Irma, another devastating storm - caused unprecedented damage to Puerto Rico’s infrastructure, destroying roads, devastating power grids, and cutting off communications. With many parts of the island completely cut off from the outside world, it was difficult for the military to assess the true extent of the damage and scale up operations accordingly.

In yet another example of how Trump’s opponents have twisted or ignored facts when spinning a self-serving narrative about the administration’s response, Rubio said Friday on CNN that Trump should put the US military in charge of handling and delivering aid to Puerto Rico – ignoring the fact that, until late this week, the Navy had been supervising the response from the sea.

Poviding a notable counterpoint to Mayor Cruz"s criticisms, Puerto Rico Gov. Riccardo Rossello has repeatedly thanked and praised the federal response. In a mid-day tweet, Trump thanked Rossello for his praise.  

The Governor of Puerto Rico, Ricardo Rossello, is a great guy and leader who is really working hard. Thank you Ricky!

— Donald J. Trump (@realDonaldTrump) September 30, 2017

Trump praised another Puerto Rican politician, Congresswoman Jennifer Gonzalez-Colon, claiming that she has been "wonderful to deal with"...

Congresswoman Jennifer Gonzalez-Colon of Puerto Rico has been wonderful to deal with and a great representative of the people. Thank you!

— Donald J. Trump (@realDonaldTrump) September 30, 2017

...And asked the Puerto Rican people not to pay attention to the "fake news."

To the people of Puerto Rico:
Do not believe the #FakeNews!#PRStrong????????

— Donald J. Trump (@realDonaldTrump) September 30, 2017

My Administration, Governor @RicardoRossello, and many others are working together to help the people of Puerto Rico in every way...

— Donald J. Trump (@realDonaldTrump) September 30, 2017

......#FakeNews critics are working overtime, but we"re getting great marks from the people that truly matter! #PRStrong????????

— Donald J. Trump (@realDonaldTrump) September 30, 2017

We must all be united in offering assistance to everyone suffering in Puerto Rico and elsewhere in the wake of this terrible disaster.

— Donald J. Trump (@realDonaldTrump) September 30, 2017

In an interview with ABC, an anonymous White House official pointed out the irony in Cruz"s remarks: Namely, she"s been spending more time speaking to the media than helping out herself.

“She has been invited to FEMA command center several times to see operations and be part of efforts but so far has refused to come, maybe too busy doing TV?"

While criticism has focused on Trump"s reluctance to wave the Jones Act and send in the military, the response hasn"t foundered for lack of supplies. Already has hundreds of thousands of pounds of food, water and other emergency necessitites stuck in Puerto Rican ports. The problems are related to circumstances on the ground. The country’s devastated roads, and a shortage of truckers to drive the supplies into devastated areas, has arguably been the biggest impediment to the recovery effort.

But perhaps most tellingly of all, former Navy Captain Jerry Hendrix – a veteran of several disaster response efforts who has no connection to the Trump administration – told Bloomberg that he believed criticisms of the administration’s efforts have been unfair.

Hendrix explained that the Pentagon and FEMA weren’t being recognized for their careful preparations for the storms.

TH: So, it seems like everybody has blasted Trump administration"s response to the Puerto Rico crisis. Has that criticism been fair?

JH: No, I don’t think so. First of all, there was a fair amount of anticipatory action that is not being recognized. Amphibious ships, including the light amphibious carriers Kearsarge and Wasp and the amphibious landing ship dock Oak Hill were at sea and dispatched to Puerto Rico ahead of the hurricane’s impact.

So far, 16 deaths have been recorded on the island in the aftermath of Hurricane Maria, which made landfall a week-and-a-half ago as a category four storm. More than 80% of the island is without power, and about 40% doesn"t have access to potable water. Still, roads are being cleared, airports are reopening, and cell service is being restored. Soon, the public"s attention will shift to the mainland, as tens of thousands of Puerto Ricans who’ve seen their homes destroyed by the storms flee the island to stay with relatives until they’re ready to return to the island.

For what it’s worth, mayors of cities with large Puerto Rican populations like New York and Orlando say they are working with the federal goernment to accomodate the influx of temporary residents. New York City Mayor Bill De Blasio has said he expects up to 100,000 disaster victims to stay with relatives and friends in NYC alone.

However, the question remains: When their time comes, will they also denounce the federal response to score cheap political points?

"What Are We Going To Do?" Puerto Rico In Chaos As Cash Runs Out

Most Puerto Ricans haven’t had access to electricity, cell service or financial services for nearly two weeks now. And as we reported yesterday, residents who didn’t stockpile enough cash have been struggling after Hurricane Maria essentially knocked the island’s economy into the 1950s, forcing some to forgo essential supplies - or worse - resort to looting. For those who do have access to working ATMs and banks, long lines have sapped cash reserves as the country has effectively reverted to a "cash only" economy.

Those whose access to cash has been limited - or cut off entirely - are becoming desperate as they start to wonder how they will begin the process of rebuilding their trashed homes - or even where their next meal will come from. As Reuters reports, cash has become just one of many scarce resources on the island (food, medical supplies and gas are also in incredibly short supply).

With electricity and internet down in Yauco, southwestern Puerto Rico, Nancy and Caesar Nieve said they could not access paychecks directly deposited into their bank accounts.

“What are we going to do when we don’t have any cash? The little cash we have, we have to save for gas,” said Nancy.

Cash demand spiked in the first few days after the hurricane as merchants were unable to accept other modes of payment. First BanCorp, one of the island’s largest banks, said that nearly two-thirds of its 48 branches remained closed, and that electronic transactions had resumed at only 25% of its ATMs.

Apparently, word of these privations made its way back to the New York Fed, which has assured the world via the Wall Street Journal that the central bank has plenty of physical cash to keep banks on the island stocked for the forseeable future - lowering the likelihood that anybody will suffer for lack of access to cash. Notably, the WSJ didn"t explain where that money was being held, how long supplies are expected to last or how it got there in the first place.  Indeed, the central bank said only that it"s "prepared to meet elevated currency demand following the natural disaster." Reuters noted that the central bank ships cash to a depot on the island, and that before the storm it increased the size of its shipments.

As WSJ explains, Puerto Rico is in the New York Fed’s district despite its location in the Caribbean. In times of economic stress or a natural disaster, Fed regional banks plan ahead to make sure area banks have enough cash.

Of course, none of this matters if you can"t get to a bank or an ATM. But at least, if they somehow manage to find an open bank branch or working ATM, Puerto Ricans can rest assured that it will be freshly stocked with cash.

But Puerto Ricans might want to hold off before thanking Bill Dudley for his foresight. It’s worth asking exactly how long the island’s cash inventories will last. After all, the storm tore up roads and leveled buildings, potentially complicating deliveries of cash. And with authorities still focusing on search-and-rescue missions and other aspects of the preliminary response, it could take for some areas of the island to return to some semblance of normalcy.  

Furthermore, looting has become increasingly common across the island, increasing the danger that deliveries of cash could be intercepted by bands of robbers.

In a statement, the New York Fed said armored-car services are able to reach banks with cash, and automated teller machines are “once again active.”

With any luck, the recovery effort will soon kick into high gear after President Donald Trump on Thursday suspended the Jones Act, which will allow more ships to assist in the international relief effort. It’s unclear why the administration hesitated to waive the law.

But is the Fed really doing all it can to alleviate the crisis in Puerto Rico? With the bankrupt island nation facing a $30 billion cleanup effort – and potentially more if it’s entire power grid needs to be upgraded – maybe the central bank could help monetize some of these expenditures.

Oh wait…