Stronger Latin Currencies Signal Declining U.S. Hegemon(e)y

February 25, 2008

This article from Bloomberg talks about another indicator of the decline of U.S. power in the hemisphere: rising Latin currencies.

Good news for an América Latina preparing, like the rest of the world, for the noxious effects of the U.S. recession. Historically, the continent of América has contracted economic flu and typhoid when the U.S. economy gets a case of a recessionary cold. Stronger pesos, reales and other currencies mean that the countries of the hemisphere are better-able to deal with the trickle down effects of failed U.S. economic policy. According to the Bllomberg article,

“A slowdown in the U.S. will have an effect,” said Silvia Marengo, who manages $130 million of bonds at Clariden Bank in London. “What’s different now is that these countries find themselves in better financial positions. In the past, we would be talking about which Latin American country would be the next to default.”

Oddly enough, Latin America (yes) is home to three of the four best-performing currencies against the dollar this year among emerging markets.

So, buy pesos!

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