The Big Gamble

The Big Gamble

Latin America needs some blue-sky thinking.Isn't it time that Latin American investors drew a really bad hand? If history is any guide, Latin American markets must come undone sooner rather than later. Latin America is growing, but it is hardly a picture of robust health. Its governments are still over-indebted, investment is insufficient and the region depends heavily on commodity exports. By tradition, bursts of growth in Latin America are followed by recession, devaluation and political upheaval. And yet, investors can't get enough of Latin America. Mexico's IPC stock market index rose more than 40% in dollar terms last year. It rose 48% in 2004 and 31% the year before that.

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