1) S.A. is incapable of recovering at current and relevant commodities pricing.
2) I am concerned that, should the involved parties attempt to affect another bailout for the Mercosurs, there will be a significant revolt. Could be the reason, beyond the October election, that Senor Cardoso is avoiding the topic. I don't believe Mr. Menem is want to tango with the repercussions of another bailout either.
Well...
IMO I do not foresee that a commodity inflation is about to begin, unless there is specific demand for said commodities, which would have to come from the industrialized nations. Not much hope there.
Then, this would lead to a further depreciation of such commodities to even lower levels, in an attempt by the producing countries to get some hard currency... i.e. US Dollars.
I read a newsletter called "Trends in Futures" which deals in technical analysis of trading in futures, I will attempt to get some excerpts at a later time of some of the comments made in the technical picture of some of the commodities.
On # 2... When you indicate "revolt" are you referring to a revolt against established agreements meaning everyone fend for themselves independently or ? an actual revolution.
It seems to me (at least in the case of Argentina and Chile that this would not be a likely possibility), Brazil and Per£ on the other hand, may be a different story.
My gut feeling tells me that it is high time for Latin America to start taking serious steps to clean the corruption that has saddled these countries with unproductive projects and rampant corruption, if they truly want to progress.
Will Argentina actually devalue ? I hope not as Argentina seems to have set an example for the rest of Latin America.
Can they begin converting their economies from a commodity based economy to more of a manufacturing based economy ?
This I assumed that was the plan, but for some reason it is taking longer than planned.
Would it be possible that a "bail-out" could be engineered NOT by the IMF, but rather by private industry itself. i.e. the new rescuers would part take in th equity of the enterprises that need such rescue ?
A coalition of international entrepreneurs, and/or corporations independent of governments, central bankers, IMF, etc. Perhaps gaining important concessions (income tax, preferential tariffs and other forms), in order to "save" institutions/corporations, that are considered "too large to allow to fail".
I believe that this approach has been taken in the past, however a more generous negociated package could be obtained this time around ?
Seems to me that George Soros bet on the wrong horse, I believe that Latin America would be a far better horse than all of mother Russia...
Just a thought.
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