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Strategies & Market Trends : Pancho Villa's Short Analysis File -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (221)	1/13/1999 3:30:00 PM
From: Pancho Villa	Read Replies (1) \| Respond to of 287

Thanks. I have relatives in Brazil but it is not a matter of being happy ot not happy about it. It is just the way things are. First were Asia, Japan, and Russia now latin america is following. Argentina which is also pegged to the dollar and depends on exports to Brazil may follow, a pity since I teach there and my fees in Argentinian pesos were equivalent to US$$. I don't have any hard data on Mexico, but given current oil prices and their corruption it should not be long before they follow Venezuela's foot steps, tequila II is coming... I say it again, the successful economic development of emerging markets was a mirage. Cash flows were generated mainly by heavy borrowing and selling financial assets to greedy foreigners without positive cash flow generation, in steady state, there is no right to consumption. Without the tremendous growth these economies showed recently, it is hard to see the USA Japan and Europe having a place to generate growth via exports. Who is gonna buy our junk? The USA can only by so many Mercedes and BMWs, specially if the bubble bursts, a local mercedes BMW dealership were a friend is a salesman saw sales plummet last September/October when the US market had the jitters. If you look at nasdaq, it looks like the bet now is that USA's technological power will be the motor genrating growthin the early 21st century no matter what. In 1989 japan was also considered to be invincible. Another problem that will one day hit is the tremendous US's deficit. One day the japanese chinese etc, will realize the trillions of green IOUs that we exchange for hard goods [produced at a loss using funds borrowed from western banks] are less reliable than Clinton's word.