Capital Controls Roil Latin America Bond Markets by Evoking `80s
By - Jan 19, 2011 12:00 AM GMT-0200
Latin American nations from Brazil to Peru are returning to currency and foreign investment controls that marked the 1980s era of hyperinflation. Since the start of the year, policy makers across the region have increased dollar purchases to record levels, raised reserve requirements and curbed banks’ ability to bet against the dollar in a bid to stem a 29 percent rally in Latin American currencies since March 2009. Controls may stiffen, and other nations could join the “market-unfriendly” drive, said Alberto Ramos, an economist at Goldman Sachs Group Inc.
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Comment: Like some people who never seem to learn, there are also countries and whole regions that seem unable to learn. One of the candidates for this category is Latin America with Brazil at the top. That the authorities blame their own misbehavior on the markets is just one part of the story; the other part is that they really believe in what they say. Being mean is one thing, being stupid is another thing. Then there is the kind that is both mean and stupid. Most of the harm they produce falls on themselves. In the case of Latin America it is the people who will suffer and rightly so, the cynic say, because it is the people who elect, admire and follow the bad men and women at the top. Sheeples indeed. Exploited by ruthless wolfes disguised as shepards.
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