The world runs on credit, there is a donut company that says the America runs on Dunkin, but I digest. Business runs on credit and without credit the economy automatically smaller and it is much harder to do anything, because cash is king. If a region is dependent on tourism, most tourists do not bring lots of cash or travelers checks, they bring their credit and debit cards. You can imagine what happens when a country that relies on tourist dollars suspends the use of credit cards.

In an article by Dave Sherwood and Kylie Madry of Reuters, the country of Cuba suspended VISA and Mastercard transactions by the central bank citing US sanctions. Recently partly because of higher prices of air fuel, the supply of air fuel meant any tourist flying into Cuba could not be guaranteed to fly out.

Cuba’s central bank said a foreign partner that had previously processed credit-card transactions for Cuba had decided to limit operations after a US executive order on May 1 that vastly broadened sanctions on commerce with Cuba.

Credit-card transactions have historically been handled by a foreign bank and Fincimex SA, a financial arm of FAESA, a military-run conglomerate targeted with sanctions by the Trump administrations.

The US accuses GAESA of secretly hoarding profits from the country’s most valuable industries for the benefit of the military and Cuban elite. GAESA denies those claims.

There are speculations that the US will invade Cuba at some point in the next few years, which is why there has been an exodus of businesses from Cuba including foreign hotel, airlines, and global shipping firms.

Linking to dividend paying stocks, if you use Cuba as an example, slowly the sanctions imposed by the US has strangled the economy of Cuba. Similar to most sanctions, it starts slowly and builds stream and eventually everyone sees the results. The issue is when do people react or move to alternatives?

There are more questions than answers, till the next time – to raising questions.