A quarter of the whole water but only 6% of the people is in LATAM. Which we hold 14% of that water.

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Brazil and Argentina have something else of great value: water. Take a look at the chart, which shows that South America has about 26% of the world's water supply. Asia, by contrast, has many more people to support with its water supply. Then again, this chart makes things look better than they are. Most of China's water supply is in the south, while most of its people live in the north:
In any case, Brazil alone holds 14% of the world's supply of fresh water. I remember, too, visiting a ranch in Argentina and having the owner proudly show me how water generously bubbles out of the ground from underground streams and then waters acres of crops. Quite a natural advantage.
Perhaps it goes without saying that the biggest risk down here is the populist and interventionist policies of governments. That is a risk one takes everywhere these days — even in America, and even in Canada (remember the income trust fiasco?). Political risk seems to be on the rise the globe over, something we should expect after a long period of fat years. People get complacent and take economic growth for granted.
While the political risks of South America bear watching, I believe the investment merits of owning farmland down here outweigh the risks.
Sincerely, Chris Mayer
P.S.: Investing in foreign markets is not limited to just the agricultural sector. In the December issue of Capital & Crisis, you will receive important investment information for many different emerging economies. As domestic trouble continues to mount, diversifying your portfolio in commodities markets overseas may be the wisest play you can make. Click here to read more…
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