Counting the Cost - The rise of Latin America

[cpbbailz]

no other county uses the central bank to fund public sector expansion? Correct me if I'm wrong but that sounds like the US..

[CenturionTolteca]

México and Brazil lead.

[TheOttawavalley]

Keep in mind demographics and debt when examining economic growth. Latin American consumer debt is increasing dramatically and we in the western world know where that leads!!!

[Pedrofrombrazil]

Happy New Year Latin America - Wealthness & Health for All

[shussey100]

Well done Latin America. Great people. Next stop Africa! See you in Botswana!

[leeo268]

Nice to see some positive news to conclude the year. 

[schlagerhansi]

What if China's economy crumbles? Latin America has seen many periods of wealth, especially while exporting to the US, and her allies, during WW I+II. When that demand died down, they impoverished pretty fast.

It's always risky to be dependant on one customer, while not being self-sufficient.

And wealth isn't always healthy. Much of it in Mexico, and Perú, stems from drug dealing, while average Mexican citizens can hardly afford their tortillas any more as the price for maizecorn has soared.

[RafaelFernandeSantos]

@schlagerhansi I haven't watched that vid, but I know that along with other news outlets AJ tends to attribute LatAm's growth to export to China. But the fact is, most LatAm nations have had negative net export growth for the last years. Most grow on account of consumption and investment, the main exception being Venezuela. Also, I can't talk about every LatAm, but at least in Brazil's case, the post WWII growth was on account of import substitution industrialization, not exports.

[schlagerhansi]

@RafaelFernandeSantos

Interesting that you remember it that way. I thought of Brasil in the 1st place when writing my comment. Didn't Vargas sell huge amounts of beef to the US in the 1940es? And didn't FDR give him billions of dollars in return? And didn't Brasil's economy begin to stumble when those US payments were stopped in the 1950es? And wasn't that the main reason why the military came into power in the 1960es?

[RafaelFernandeSantos]

@schlagerhansi Your history teacher sucks ass. During Vargas's times, Brazil exported coffee, not meat. And apart from coffee, we imported most of our foodstuff needs. As for Vargas, he was in fact the one who inaugurated the period of import substitution industrialization and weakened the hold the landed oligarchy had on the economy. There was indeed an influx of foreign capital up until the early 60s, but from loans, not exports. Cont...

[schlagerhansi]

@RafaelFernandeSantos

Brasil exported coffee in the 1920es, i.d. before Vargas became president. After 1929, the coffee price fell by 90%, and the export collapsed, they had to use it as fuel substitute -- another proof how dangerous it is to depend on export. Brasil only recovered when WW II started, so they could sell again, and get moneys from the U.S.

[RafaelFernandeSantos]

@s Most of the world only seriously recovered after WWII, it wasn't Brazil only. And in fact Brazil did comparatively well in the Great Depression as govt demand helped keep the coffee industry afloat. Again, beef didn't play any big role in our export basket, and IDK who told you otherwise. In fact, we had by then problems increasing food supply to urban centers b/c of an underdeveloped food industry, meaning that we needed food production to turn inwards, not to foreign markets.

[schlagerhansi]

@RafaelFernandeSantos

Anyway, the money you invested in whatever industries, wasn't homegrown, it came from abroad, mainly from the U.S. FDR gave you billions of dollars (the US-$ buying a little more than it does today). As soon as those payments were stopped, Brasil's industry was obviously not strong enough to keep up, it was never self-sufficient, and still isn't.

[RafaelFernandeSantos]

@schlagerhansi (Cont. 4) Sure, FDR just gave some billion dollars, haha, where did you take your shitty history classes? And btw, industrialization only became associated with foreign capital during Kubitschek's regime: FDR was long dead by then, moron. It's not abnormal for industrialization to be associated with foreign investment: see China. Be that as it may, such an imbalance was corrected during the military regime. In 1969 TNCs account for 28% of our GDP; in 1985, only 8%.

[RafaelFernandeSantos]

@schlagerhansi (Cont. 5) Do you, btw, what's the main form of FDI in Brazil? it is foreigners buying up national assets. That is, most often, foreign capital isn't introducing new products or technologies. It is buying up pre-existing ones. Btw, I have the impression you're talking out of your ass. The main US aid programs in Latin America didn't even exist during FDR's time, but rather in JFK's, and Brazil's economy only had problems with foreign loans in Reagan's times. Moron.

[schlagerhansi]

@RafaelFernandeSantos

Calm down. Netto was an egghead, and eggheads almost never -- the one and only remarkable exception being Salazar -- know how to run a country's finances, because they always tend to extreme doctrines, i.e. either "deficit spending" or "saving". That's easy to do, but it doesn't work. You have to spend the right amount of money on the right things, and how should a professor know? What you call Brasil's "economic miracle" was short-lived, even shorter

[schlagerhansi]

@schlagerhansi

(cont.)

than the Italian "economic miracle" shortly before was.

Shortly afterwards, the economy broke down, inflation and devaluation (how many devaluations did you have? I lost count!) destroyed the middle class, I know many Brasilians who lost almost everything, and I know it from persons, not from books, I've seen it with my own eyes, probably before you were born.

[RafaelFernandeSantos]

@s BR didn't break down after 73. It went through a slowdown, moron. Still, in the 74-80 period, growth averaged 7% a year, far more than what you American rogues have had since WW2. What a proof you're indeed talking out of your ass and know nothing about our history. Based on my own father's life, I know the middle-class didn't die out after that; instead, it just ceased expanding. The bulk of the 80s hardships were sustained by the urban working classes.

[RafaelFernandeSantos]

@s "the right amount of money on the right things" -> Do you think spouting vague platitudes make you seem smart? Tell me, what's the right amount and the right things? Those things' definitions are a given. And yes, BR's economic miracle may have been shortlived, but it's widely known it ended on account of external events - the 1973 oil price shocks - not b/c of internal imbalances, as your moronic "critique" of DN (whom you probably didn't even know b4 I mentioned) implies.

[RafaelFernandeSantos]

@schlagerhansi (Cont.) And again, we were already a current account deficit country. We weren't big exporters. Delfim Netto once said that the two biggest problems for the Brazilian economy were: instability in energy prices and current account issues. This has in fact been our main problems for the better part of our history. If however we were big exporters, if exports could play a bigger role in our ecponomy growth, the current account wouldn't be such a big problem, would it?

[schlagerhansi]

@RafaelFernandeSantos

You were always - and only then - wealthy when you could export something: first cotton, then sugar cane, then coffee, and now it's gas, and oil. Hope you don't squander that wealth again as you did before, but use it to devolop something of your own. Just exporting -- whereever and in exchange for whatever -- is no sound economics policy.

[RafaelFernandeSantos]

@schlagerhansi It's historically known that politically and economically BR is inward-looking - that's still true today. As a result, BR's always had current account issues, as said by a prominent economist of ours, Delfim Netto, who also had quite a role in managing our economy, both in government positions and as an informal advisor to recent administrations. I trust his knowledge more than some dumb American's who'll only keep repeating the same shit like a broken record.

[RafaelFernandeSantos]

@schlagerhansi (Cont.) Our period of better growth, the economic miracle times (1968-1973), was curiously, and in contrast to what you say, a period of fast industrialization as reflected by both the domestic economy AND the exports basket. I can offer proof of that, and any of your Brazilinists will say that. That you don't know that proves you know so little of our economic history.

[RafaelFernandeSantos]

@schlagerhansi (Cont. 2) And btw, things aren't different now; net exports keep weighing DOWN on our economy: this is shown by the numbers proving consumption and capital investments are our sole growth engines, the hyped gas and oil findings hype notwithstanding. There's even a S&P on how net exports have weighed down on us since 2006, as capital investment picked up and the currency became more expensive.

[RafaelFernandeSantos]

@schlagerhansi (Cont. 3) Oh, you wanna us to be more prosper? Tell your Treaury to pay back tyhe 200 bn dollars it owes our CB. I'm not comfortable with Brazilian taxpayers funding the deficits of a rogue state.

[schlagerhansi]

@RafaelFernandeSantos

Whoever told you to buy US Treasury junk bonds?

Still, in the past they were always safer than Brasilian paper money, or bonds, always prone to be devaluated, as I said before.

Whenever I came to Brasil, I was happy to have US-$ in my pockets, and so were the Brasilians who could buy some of them from me.

What about paying you back in cruzeiros, or cruzados, or whatever it was, of 1980?