. SouthAmerica: Here is clear evidence of declining US influence in Latin America. This decline in influence in Latin America will have in the future important economic impact in the American economy. With the declining American influence, and the rise of China as the replacement to US influence in South America eventually the population of many of these countries will start taking out their investments from the US economy to invest in South America or in somewhere else. Brazilians alone have over $ 250 billion dollars invested outside of Brazil, and a large part of that money is here in the US. With most countries going from economic crisis to economic crisis in South America the population of many of these countries transferred their savings to be invested in the US economy, because of economic stability of the US economy. All together I would not be surprised if today the people from South American countries have an estimated $ 700 or $ 800 billion dollars or even more invested in the US economy. You can see evidence of American influence decline in South America all over the place. First, at the end of April 2005 Condi Rice made a two-day visit to Brazil. One of Condi Riceâs goals in that trip to Brazil it was to convince President Lula to change his mind and have Brazil vote for the US candidate that would head the Organization of American States (OAS) for the next 5 years. At the end the candidate that Brazil was supporting all along, in opposition to the United States, Mr. Insulza from Chile was the winner. This election it is a clear signal to the world of how fast the United States is losing its influence in Latin America. It is unbelievable the decline of US influence right on its backyard. It was the first time in the organizations 60-year history that the candidate supported by Washington did not win. Now, about a month later from that amazing defeat President Bush, and Condi Rice gave speeches over the weekend to the Annual meeting of the Organization of American States (OAS). But the representatives of the member countries promptly rejected the American proposal that they presented for the organization. (From all the countries in the Americas, only Cuba is not a member of that organization) Here is some information from that OAS meeting that happened over the weekend in Florida as reported by the BBC News: âBush pushes for free trade in OASâ President George W Bush has said free trade would strengthen democracy in the Americas, in an address to the Organization of American States (OAS). BBC News - Monday, June 6, 2005 He said a pan-American trade pact would unite the region in prosperity and reduce the risk of "false ideologies". Earlier, the US secretary of state called on the OAS to bolster struggling Latin American democracies. Several countries are said to be considering an alternative plan, which some diplomats see as "less intrusive". Ministers from 34 American and Caribbean nations are in Fort Lauderdale, Florida, to discuss the region's most pressing problems. 'Commitment' Mr Bush said a recent free trade deal between the US and Central American states provided "a historic opportunity to bring prosperity to people who have never known it. "It is a signal of the US commitment to democracy and prosperity for our neighbours," he said, urging Congress to ratify the agreement. He said he would continue to push for a pan-American deal. "An Americas linked by trade is less likely to be divided by resentment and false ideologies," he said. A proposal to create a Free Trade Area of the Americas has stalled over the issue of agricultural subsidies. Mr Bush said the OAS charter guaranteed all people of the Americas "the right to democracy". 'Intrusion' Nearly all Latin American countries have moved from dictatorship to democracy over the last three decades - but elected governments have still been liable to fall or be overthrown. Opening the summit on Sunday, Condoleezza Rice called for greater intervention by the OAS in Latin America, highlighting concern over crises in Bolivia, Ecuador and Haiti. Venezuelan President Hugo Chavez called the Bush administration's plan a ploy to justify US intervention in the region. "The times in which the OAS was an instrument of the government in Washington are gone," he said. Venezuelan Foreign Minister Ali Rodriguez said OAS rules did not allow members to monitor the democratic processes of other states. Mexico has also expressed reservations. Brazil and other countries have been putting together an alternative proposal. "Democracy cannot be imposed. It is born from dialogue," Brazil's Foreign Minister Celso Amorim said. But OAS Secretary General Jose Miguel Insulza, of Chile, denied the rival proposal amounted to a rejection of the US plan. ****************** SouthAmerica: Brazil was the original leader of the Americas, and the âAndrada Doctrineâ established the foundations for foreign policy for the Americas. In the past Brazil had its historical moments of leadership in the Americas. Brazil became the original leader of the Americas in the early 1800âs under the leadership of Jose Bonifacio and his âAndrada Doctrine.â I have seen a number of times over the yearâs people quoting the âMonroe Doctrineâ in written articles in major US newspapers and magazines, and also on television programs. The American history books, written from an American history perspective, usually mention the Monroe Doctrine as an important American contribution to setting up foreign policy for the Americas. Usually, they are trying to imply that the Monroe administration was the first administration of any country in the Americas to establish foreign policy for the Americas not allowing any new European colonies in the Americas, and European powers were not to interfere in the affairs of the countries of the American hemisphere. President James Monroe in his seventh annual address to the U.S. Congress on Dec. 2, 1823, made a statement that eventually became one of the foundations of US policy in Latin America. Monroeâs statement initially remained only a declaration of policy; its increasing use and popularity elevated it to a principle, slowly becoming in the mid-1840âs what we call today the Monroe Doctrine. The Andrada Doctrine The âAndrada Doctrineâ was the original document that laid out the foreign policy structure for the Americas. The âAndrada Doctrineâ precedes by 18 months, and it is more precise and more courageous than the âMonroe Doctrineâ laid out by the United States president in his message to Congress in December 2, 1823. There is a certain resemblance between both doctrines, but we have to recognize and give credit to José Bonifácio for being the first to expose his thoughts and making a policy in that regard for the entire hemisphere. José Bonifácio preceded the American President James Monroe in formulating foreign policy for the American hemisphere by more than one and a half years. You can read about historical information regarding Brazilian leadership of the Americas, and the âAndrada Doctrineâ by Ricardo C. Amaral, at the following website: http://brazil-leaderoftheamericas.blogspot.com/ January 1, 2005 âThe Andrada Doctrine â Part Iâ and âThe Andrada Doctrine â Part IIâ In May 30, 1822, Brazil through the âAndrada Doctrineâ became the original leader of the Americas regarding foreign policy issues dealing with the defense of the American continent against European interference in the affairs of the countries of the American hemisphere By: Ricardo C. Amaral .
It's what I call the "Chavez socialist Phenomenon". The vast majority of Latin America are people living in absolute dire abject poverty. Before with the various dictatorships, these poor people had no voice, but as democratic principles take hold, the poor have mobilized to support and vote for those politicians who will help them. The "Chavez phenomenon" is closer to Chinese communist capitalistic principles where the state takes care of the people, yet allows them access to capitalistic tools.
. mhashe: It's what I call the "Chavez socialist Phenomenon". The vast majority of Latin America are people living in absolute dire abject poverty. Before with the various dictatorships, these poor people had no voice, but as democratic principles take hold, the poor have mobilized to support and vote for those politicians who will help them. The "Chavez phenomenon" is closer to Chinese communist capitalistic principles where the state takes care of the people, yet allows them access to capitalistic tools. ************ SouthAmerica: Chavez is doing the right thing regarding his economic policy, and he has been lucky. Why he is doing the right thing? And why is he so popular? Because he is giving government money for education, and many poor people are able to go to school for the first time in Venezuela. He is also providing health care for the poor for the first time. The poor people in Venezuela loves him, and his approval rating, as a president is very high. Why is he lucky? Because the demand for oil is very high in world markets and the price of oil is bringing a ton of money to help Chavez do his job. But in general, China is the one that is making a difference in South America. Without all the demand for commodities from the Chinese economy, South America today would be in complete chaos and would look like we had a civil war going on in the entire continent. But thanks to China, things are not so bad for many countries in South America at least for the people who own the businesses and the natural resources. Today for anyone to be able to hold a job you need to have a certain minimum level of technical skills, but half the population of South America does not have this minimum required amount of technical skills. From the Bush administration perspective Chavez is a bad person because of instead of giving large tax breaks for a few very wealth people, and help them loot the money and transfer out of the country, Chavez is actually wasting money on peopleâs education and health care. .
what a bunch of nonsense. one of the biggest problems the us has is trying to find a way to stop people from flooding over our southern border into the usa from mexico and south america. people south of us are voting with their feet.
China showing Venezuela the money for commodities is the ONLY reason why Chavez is popular. If there's another reason, it's because of his macho anti-US blabber, which strokes the Latin ego.
southamerica, I completely agree with your insightful analysis. The facts might be hard to swallow from a US point of view, but most international analysts would agree that this pretty much sums it up. The greater question is the headline of this thread, and more importantly how we can benefit from it as traders. Any views on that would be interesting.
For those who live in the real world, you should remember this: Brazil default sparks sell-off back in '99. Then the jokers had the IMF lend them $30 billion in 2002. Their Q1 growth is 2.9%, below their target of 3.5%. Inflation is above 6%. Ya, I'd rather gamble my money at the casino than send it there.
. Sam123: China showing Venezuela the money for commodities is the ONLY reason why Chavez is popular. If there's another reason, it's because of his macho anti-US blabber, which strokes the Latin ego. ********* SouthAmerica: But Chavez is using the money from sales to China to help the Venezuelan people. You would prefer that he just lined his pockets and of his close friends and let the rest of the country to go to hell? Something similar to what is happening here in the US today. He is standing up to the US because the Bush administration is unhappy that he is helping the poor people in his country. The Bush administration is so incompetent today, that those clowns were trying to overthrow Chavez (a democratically elected president) and they were not even able to do that â these guys are pathetic. I am not against Chavez - it is great that Venezuela has a leader that actually cares about the welfare of his people and the future of his country. ************ JorgeAmado88: The greater question is the headline of this thread, and more importantly how we can benefit from it as traders. Any views on that would be interesting. ************* SouthAmerica: A question for you JorgeAmado â Are you a Brazilian? I am asking you because Jorge Amado is one of the most famous contemporary writers in Brazil, and he died just recently. I am a member of the âUniao Brasileira de Escritoresâ which is to most important association of writers in Brazil. This organization has only one chapter outside Brazil that is located in New York City â UBENY We meet once a month in New York City, but we have some members that live in England and also in France. Going back to your question. I am not a trader. I am from the school of John M. Templeton, and Warren Buffett. I did work for Mr. Templeton in the early 1970âs when I was a very young fellow and still going to college. For few years when I worked for Mr. Templeton I used to hang around with a bunch of old financial analysts that had been working for John Templeton from twenty to twenty-five years. I was only 19 years old at the time but for some reason the old fellows enjoy teaching me about the stock market and they let me go to lunch with them every day, I was allowed to go to sit on all the senior meetings when they were discussing all the stocks that they were buying for the clients of the firm, and I also stayed after hours in the office going over stocks that were potential investments. After I left Templeton I continued a close relationship with a very close associate of Mr. Templeton, and used to visit him on a regular basis and every time I saw my friend all we talked about was what was going on with John Templeton, and about investments. If you work so close to someone like these analysts did for such a long period of time you end up picking up a thing or two about the investment philosophy of the master. What I am trying to say is that I am a conservative investor and a value player. I think like a long-term investor and not as a trader. If you have been reading what I have been posting then you know that I am very negative regarding the future of the US economy. (We have idiots running the show in Washington today) In my opinion, Alan Greenspan is overstaying his welcome, and it is time for him to retire immediately. If I were making the decision, I would choose Stephen Roach â The Senior economist at Morgan Stanley to be the replacement for Alan Greenspan, and I would request that Alan Greenspan resign immediately as Chairman of the Fed. I believe that Stephen Roach has the insight and intellectual ability to understand what is happening in the global economy and he has the potential to be a Fed chairman of the stature of Paul Volcker. I donât know why Alan Greenspan doesnât retire. He is out of touch what it is going on in the global economy. Stephen Roach travels frequently to India, China, and other places around the world and from what I have been reading from his writings, and from his television interviews he is one of the American economists that has a better understanding of what is happening as a result of globalization. Based on George Bushâs record he probably will replace Alan Greenspan with some idiot, I guess George would like to be consistent on his cabinet selections. Take a close look a some of George Bush selections: Secretary of the Treasury: John Snow Job Credentials: Used to run a train station somewhere in the US. Main goal for the coming 4 years: to continue to give snow jobs to the world regarding the American economy. Secretary of Labor: Elaine Chao-Mein - (She is Chinese) Credentials: Before becoming Labor Secretary she prepared the âUnited Way of Americaâ for a path of: Scandals, accounting shenanigans, Mismanagement, and Fraud. Main goal for the coming 4 years: to continue exporting to China as many good paying American jobs as possible. In the last few years the US had a flood of good paying American jobs being exported for China â What George Bush does in that regard? He selects a Chinese woman to be US Labor Secretary. The US economy continues to lose a ton of jobs to China and in the mean time almost 100 percent of the American population does not even know that the US government still has a Labor Secretary. It seems to me that Mrs. Chow-Mein has been hiding from public view in the last 4 years, and the only good job that she is doing is in helping export the American jobs to China. You got the picture what I think of the Bush Administration economic team. This US pressure that the US government is putting on China for them to float their currency against the US dollar might have consequences that the US government is not taking in consideration. Please donât quote me on that, but I believe that Warren Buffett said something like this recently: one of the major differences between China and the United States today is that the Chinese people choose smart people to run their government. .
. Convertibility: For those who live in the real world, you should remember this: Brazil default sparks sell-off back in '99. Then the jokers had the IMF lend them $30 billion in 2002. Their Q1 growth is 2.9%, below their target of 3.5%. Inflation is above 6%. Ya, I'd rather gamble my money at the casino than send it there. ******************** SouthAmerica: From March to August 2002 Brazil had a currency crisis, and in September of 2002 I wrote and published the following article. This article gives you in a nutshell the reason for the Brazilian bailout. By the way, Brazil has around 6 percent inflation and the fed funds rate in Brazil is almost 20 percent. Brazil has a positive balance of trade. In the Last 18 months the Brazilian government has reduced its total cumulative government debt from $ 250 billion dollars to around $ 180 billion dollars today. This is the total cumulative outstanding debt of Brazil. The United States has over $ 8 trillion dollars in cumulative outstanding government debt today. The US government debt is so large that the US pays in interest on its outstanding debt more than $ 300 billion dollars per year. The US pays per year in interest on its debt an amount that is 166 percent higher than the total outstanding debt of the Brazilian government. But the reason why I would not invest in Brazil is because of the Real, the Brazilian government does not have the reserves necessary to protect the currency from an international speculative attack against that currency. *** Here is my answer to you regarding the Brazilian currency crisis of 2002. Brazzil Politics September 2002 "Countdown to Armageddon" Now it is Brazil's turn to go through an economic meltdown. Brazil is traveling on the same road that other countries have traveled before their total collapse. Ricardo C. Amaral On September 7, 2002 when Brazilians commemorate their Independence Day, as a Brazilian citizen, I will be wondering if Brazil still is an independent nation or if Brazil has surrendered its sovereignty to the International Monetary Fund (IMF) in exchange for a few dollars. Who runs the Brazilian economy today? The IMF or the Brazilian government? My ancestors José Bonifácio de Andrada e Silva (the Patriarch of Brazilian Independence) and his brother Martim Francisco Ribeiro de Andrada (the first great Brazilian financier, Martim Francisco is credited with developing and implementing the financial plan, which financed the war effort for the Brazilian independence, when he was Finance Minister in 1822), would be very disappointed with the economic policies being implemented in Brazil in the last four years by the Brazilian government. José Bonifácio and Martim Francisco had a very good grasp of economics and finance, and they did not believe in borrowing money from foreign sources with strings attached. They believed in creating a domestic pool of capital to fund the development of the Brazilian economy. I am sure that both of them would be 100 percent against all these Brazilian government borrowings from the International Monetary Fund and from other international banking institutions. Disguised Bailout Is it a coincidence that the largest bailout ever given by the International Monetary Fund almost matched the amount of $27 billion dollars that U.S. banks have as claims on Brazilian borrowers as of the end of March 2002? This IMF loan was the largest loan given to any one country to date. The US$ 30 billion loan to Brazil was an amount higher than expected and surprised most people. Was this loan a bailout to Brazil or to the U.S. banks? The Wall Street Journal reported on August 8, 2002 that the major American banks, which will benefit from this bailout are as follows: Citigroup with $11.4 billion total exposure in U.S. dollars to Brazil, FleetBoston with $10.4 billion, and J.P. Morgan Chase also has a substantial exposure. On August 9, 2002 The New York Times reported that as soon as the loan package was announced the shares of Citigroup and FleetBoston jumped 6 percent each in response to the news. There is no question that this IMF loan was a bailout to the major U.S. banking houses. *** This article is a long, about 15 pages long, but if you are interested in reading the entire article you can see it at the following website: http://www.brazzil.com/content/view/6309/64/ .