This upcoming week and month will bring attention from the FPA towards Latin America. In addition, Fareed Zakaria interviewed Alvaro Uribe, President of Colombia last week and the interview was aired this past Sunday. Brazil and Rio de Janeiro has also won their bid to host the first Olympics for Brazil and South America as a whole, but issues abound as developing countries will always be seen in the light of the negative and positive aspects of the last Olympics in China, a fellow BRICs nation where order and progress might not include all Carioca in this celebrated event.

A book signing by Ambassador Heraldo Muñoz will take place on October 8th in New York City. Heraldo is the Permanent Representative of Chile to the United Nations and Chairman of the United Nations Peace-Building Commission. He will discuss his new book, “The Dictator’s Shadow: Life Under Augusto Pinochet” at the lecture and book signing. Those of you in New York who would like to attend can find the link to the event here on the FPA website.

Later in the month, a lecture series supported by the FPA will be presenting His Excellency Ambassador Arturo Sarukhan, Ambassador of Mexico to the United States. He will be speaking on: “Mexico’s Foreign Policy and the Current State of Mexican-American Relations.” For more information on the October 21st event, please see the link here.

Fareed Zakaria has interviews numerous leaders in the Middle East and Latin America last week. His interviews with Chavez, Ahmadinejad, and Gadhafi last week were topped off with a short interview with President Alvaro Uribe of Colombia, which was aired this past Sunday. I have a great appreciation of Zakaria’s work and focus on global policy issues and thought his interviews last week did bring out important questions and concerns, which were politely asked and validly addressed and pressed upon in all three initial interviews. Uribe’s interview, while informative, did lack deeper questions and seemed to be a lot shorter than those last week. Generally Zakaria asks many questions of leaders which I have always wanted to know myself, but often can only find in Spanish language or Arab language media. The interview with Uribe was altogether good, but for a leader who is likely the most popularly elected leader in the Western Hemisphere, certain questions were absent for the most part. Zakaria is well aware of the threats on Uribe’s life, 15 and counting, and Uribe answered those questions diligently. What I believe was lacking was questions on Colombia’s position and evidence regarding foreign support for the FARC and other internal terrorist movements in Colombia. This was a disappointment due to the lack of attention in English language media on the topic and the fact that in the interview with Chavez, conflict with Colombia was addressed but not responded to in the accompanying Uribe interview. As well, claims by US and Canadian officials denying support for an FTA between Colombia and its northern neighbours did not enter into the discussion, despite the growing debate over the country’s human rights record. This would have been interesting as the US and Canada has a trade policy that avoids criticizing similar or worse human rights records with other US and Canadian trading partners, namely China and for Canada, China and Cuba to name a few. While the agreement will be passed it seems between Canada and Colombia, an election in Canada was almost created over the issue two weeks ago and another election might be started ironically on the lack of trade between Canada and China as seen in early election commercials by one of the opposition parties. No matter what position viewers might have taken on Colombia and associated issues, a discussion on those topics would have informed us better on a situation that many have opinions on but few really understand.

Now for lighter fare, Rio de Janeiro has won their bid to host the 2016 Olympics, being the first South American nation to host the event ever. Mexico did host it nearly 40 years ago, but for the continent to the South it is a deserved first. It seems that the Olympic Committee is starting to see themselves as the ones who should pick the winners of the global economy in the future, but success does not always come from the event even if the country does well post Olympics. China received much criticism of their treatment of Tibet and Uigurs in the build up to their Olympic games and many citizens in Beijing lost their rights to property and their homes in the process of building grand structures for the games and making China look issueless in the process. The Committee should have expected this and many protestors sought to hold them to account for it.

Regarding Brazil, like with China and other developing nations, the Committee should consider questions of poverty and the benefit to the whole. If they choose to pick winners for policy reasons that often slide into issues of security and economics, then the result of that progress should be taken into account. Brazil has done its best since the 1980s to reform every aspect of its society, reduce poverty and balance the economy, even successfully in the latest economic storm. Crime and poverty however will be a major issue in Rio even in 2016, and while these issues cannot be resolved in such a short time, a focus on reduction and avoiding the repeat of China 2008 where the disadvantaged in China were ignored by China and the Olympic Committee is unacceptable in 2016 as it was in 2008. I do have faith that Brazil will do its best to provide for all events, and have learned from China 2008 on what not to do and who not to avoid. Boa Sorte Cidade of the Cariocas!

The last month of economic news has been as diverse as the last 10 months of the same forecasts. With the start of July, the drop in recent markets worldwide and predictions of further problems in large economies such as the UK and Japan set to bring the recession further attention, but by mid month the result was that some US banks were making some profits, even paying back small sums of money to Mr. Obama and some auto manufacturers were not destined to be completely eliminated as stability slowly crept back into market forecasts. While these announcements will likely change in the next few weeks as SME’s continue to wind up their companies, the biggest market change seems to be coming from China and India. While many believe that only 8% growth in China may be the limit in order to stave off mass discontent among its population, growth rates of 5% or more in places like India, and lower yet stable rates in Brazil draw attention to hopes of an economic recovery coming from the recently famous super emerging economies of the BRICs. Of great interest and increasing popularity, Brazil, who has managed to maintain a stable growth rate in their economy since the 1990’s global economic troubles between 3-5% and was able to reasonably shield itself from the meltdown of Argentina’s economy in 2001. Brazil is beginning to change into the next large emerging market economy in form and function. The recent recession has taken the new Brazil and brought its relative successes in the last few months into the meeting rooms and policy branches of those economies who wish to change the relationship between North America and Europe towards South America’s largest and most promising economy.

In the Americas there are two large economies outside of the United States that while being hit hard by the recession, have managed to keep the core financial and economic systems of their countries in good shape. Canada and Brazil have stood out as two of the largest stable economies in the Americas and worldwide. With banking systems that have not collapsed and reserves of cash from past years of growth shielding some of the effects of the global economic crisis, both countries could begin to push the Americas and world economy back into positive territory. Limits to BRICs and other relatively healthy economies may be restricted formally and informally however depending on how the EU and US decide to react to other large economies worldwide. Effects on countries such as Canada and Brazil might be produced by restrictions coming from the new Buy America provisions in the US or as an example, be expanded by talks of a possible EU-Canada Free Trade Agreement. Limiting trade between NAFTA partners in North America and retracting from agreements between the US and trade partners in the Americas is what all trading partners of the US fear in the region as well as globally.

Many experts on global economics such as Zakaria and Khanna see the US as possessing a major role in the future world economy, but also one of shared influence and regional power as a necessity. Limits to expanding the economies of the Americas in a united fashion is seen in the lack of interest in regional trade agreements and the lack of support for trade agreements as with the one with the US and Colombia. While the US seeks to put pressure on its economic allies during the recession, the EU is seeking increased open trade with large economies such as Canada, India and China, and China is seeking many economic ties with countries such as Peru, Chile, Venezuela, Argentina and of course Brazil. Even Canada has ratified a trade agreement between itself and Chile, Colombia, Costa Rica and is working on agreements with CARICOM. Effects from Buy America might better regarded as the Buyer Beware provisions, as the US creates a policy environment to push its allies to trade with other economies outside of the Americas and produce economic legacies outside of the US which will strangle future growth of private industry in the US itself. As with any investor, the prospect of future governmental and trade restrictions by doing business with a US company or investor will produce negative incentives in the long run. With so few healthy investors currently, economic legacies such as Ford, Disney, Coca-Cola and McDonalds may be replaced by those created and grown in other healthy economies outside the US and the Americas…bad economic policy is simply a caveat emptor of economic growth.

Not all US policy experts agree with Buy America, and some even have been making attempts to approach Brazil as the next India or China. Mind month, the publication and discussion of the new book: Brazil as an Economic Superpower? Understanding Brazil’s Changing Role in the Global Economy was accompanied in Washington DC by a discussion of Brazil as a rising global economic power. This book launch and discussion followed the Brooking Institutions release of interesting economic data and reports on the region as a whole. Many of these discussions focus or Brazil or Latin America as the next China or India, but in reality the Latin American method or growth and that of growth in China, India and Russia only bare some basic similarities. Latin America and Brazil have traditionally depended on commodity prices principally. While the Brazilian economy is fairly diversified, a large portion of its GDP does come from commodity and oil prices, which is similar to a country like Canada who have a great deal of GDP linked to natural resources. Manufacturing in all economies, including Canada, Brazil, China and India have been greatly affected, leaving China with a growth rate of 6.1% in the first quarter of 2009. While oil prices and other commodity prices have bounced back and forth since 2008, manufacturing has taken severe hits in all nations. China and to a certain degree, India, depend greatly on the demand in foreign markets on US and global consumer spending. Entrepreneurial Organisations such as the SBA.org in the US and CFIB in Canada would be able to make the point that many of the jobs in the US and North America depend on SME’s, and with the increase in bankruptcies and the lack of business loans coming from banks in any financial state, the job loss will only increase and create a further decline in consumer spending. Manufacturing depends on its consumers being able to purchase its good and grow the economy. China, who produces many of these good in the US and EU are entirely dependent on these economies as their growth is directly linked to US and EU consumers. Brazil, while dependent on consumer spending has less than 40% of its trade with the US and is balanced by heavy industry, commodities and technology industries. While many of these sectors are hurt by the recession, it gives Brazil some added security in the long term within the global economy.

The news on recent increases in growth in China and India are positive, but with many consumers losing jobs recently and many smaller industries only failing in recent weeks, it is hard to predict a concrete economic demand for consumer products and link growth in China to the markets it depends on. In reality, many smaller and larger US firms often depended on cheap operating loans from US banks, and without not only financially stable banks, but banks willing to give out loans to investors, it is impossible to justify any prediction of growth in consumer spending when SME’s are neglected from economic recovery and are the last to receive financial aid in the economic crisis, yet provide the majority of jobs in many developed countries. Countries like Brazil and Canada should be considered a relatively strong option for investors, as historically and logically growth seems more likely for all levels of industry in few similar countries in the long run and the avoidance of economic bubbles have been relatively successful in the past.

An interesting piece I encourage you all to read:
Latin America and the Economic Crisis: Designing and Implementing Stimulus Policies
Mauricio Cárdenas, Director, Latin America Initiative
The Brooking Institution

June 25, 2009 —
Dani Rodrik recently wrote in his daily blog that Andrés Velasco is the living example that sound macroeconomic policies have a high dividend. Chile’s decisive fiscal stimulus package—adopted last January—has made him President Bachelet’s most popular minister. Not too long ago, during the years of high copper prices, many Chileans questioned their government’s economic management for saving too much and postponing key investments. Of course, those critics are silent now. Events are showing that a commitment to rules that focus on long run objectives, rather that immediate gratification, pays-off.

But rather than talking about Chile, I would like to make a more general point regarding Latin America. Today’s conventional wisdom –and I say this in complete awareness that ministers generally adhere to, and oftentimes shape, mainstream views—is that stimulus packages are working and that Latin America will soon be out of the recession. In Brazil, for example, most analysts consider that the contraction is a thing of the past. I want to take issue with those views.

Let me start by stating what, in my view, is the conventional wisdom:

The adoption of sound macroeconomic frameworks, mostly since the late 1990s, allowed Latin America to bring down inflation and public debt. Foreign reserves are high for historical standards, reflecting stronger current accounts and access to external capital. As a result, Latin America is coping with this crisis much better than a decade ago. In fact, there has been no crisis, just a mild recession.

Key to the current episode has been the ability to conduct countercyclical monetary and fiscal policies. In the current phase of the cycle, policy rates set by the central banks have been cut to 0.75% in Chile (a reduction of 7.5 percentage points), 4% in Peru, 4.5% in Colombia, 4.75% in Mexico, and 9.25% in Brazil.

Fiscal stimulus has also been the norm, although the size and composition of packages has also varied from country to country. The largest expansions have taken place in Chile (2.5% of GDP), Brazil, Peru, and Mexico.

Macro-financial variables have shown remarkable stability. In 2009, inflation has been falling, exchange rates have appreciated, stock prices have increased, and spreads on sovereign debt are falling.

Even though production and employment figures are still declining –and GDP growth projections are being revised downwards– virtually all forecasts suggest that the recovery will start soon. The latest Global Development Finance Report from the World Bank (the less optimistic of the existing “official” reports) projects major rebounds in all economies. The difference between the 2010 and the 2009 GDP growth forecasts is 5 percentage points for the world economy. The corresponding figure is 5.4 percentage points for the OECD countries, and 4.2 percentage points for Latin America. The expected rebound is spectacular for Mexico (7.5 percentage points).

I think this view errs on the side of optimism. Latin America should hope for the best but prepare for the worst. By not properly considering the risks ahead, governments have the temptation of exhausting the policy tools and not reserving any ammunition for battles that are foreseeable. My critique of the conventional wisdom is based on the following four points:

The numbers on real activity and aggregate demand conditions which are coming out from Latin America are not that encouraging

Although it is true that retail sales in Brazil increased 6.9% in April (relative to a year before), industrial production registered a 14.8% contraction in May. In Mexico, where GDP contracted by 8.2% in the first quarter, industrial production fell 13.2% in April, and consumer confidence continued to fall in May. The Chilean economic activity contracted 4.6% in April and industrial production fell by 11.1%. The figures for other countries show a similar picture: Latin American economies are experiencing a deep contraction, and the evidence does not suggest a significant recovery underway.

Of course, all this could change with a big rebound in the second semester. But, is that realistic? The contraction in investment has been in the double digits during the first months of this year for the majority of countries in the region, and will have an impact on future growth. More importantly, investor and consumer confidence measures are very low and still falling in the majority of Latin American countries. We know from past episodes that it takes time –and a good amount of positive economic news– to reverse the direction of these perceptions, especially the consumer’s sentiment.

Latin America is betting on the rebound of commodity prices

China’s real GDP growth slowed to 6.1% during the first quarter of this year. Although several measures of real activity and domestic demand have been improving lately (investment grew by 32.9% in five months to May), exports continue to deteriorate. Chinese exports contracted by 26.4% in May, suggesting that there is excess capacity. To the extent that exports do not recover, investment will loose momentum as well as commodity imports, which have increased for stockpiling purposes. These are very negative news because they suggest that the surge in commodity prices will not last. Why commodities moved ahead of the fundamentals is not clear, but Latin America should be prepared to deal with prices which are more in line with lower Chinese import demand in future months.

Private capital flows are shrinking at an alarming pace

The World Bank projects that net private debt and equity flows to developing countries will decline from 8.6% of global GDP in 2007 to 2.0% in 2009. This is much worse than in the debt crisis of the 1980s or the Asian and Russian crises combined. Many in Latin America argue that the region is somehow immune to this trend, mainly because of the role that foreign direct investment plays in the region. This could be true, but at the same time, the evidence available suggests that FDI flows depend largely on growth in the OECD countries. With the major contractions expected in the U.S., Europe and Japan, FDI flows will fall in the medium term. The latest IMF data suggests that this is already happening. The investment projects under way are likely to be completed, but starting new investments is a different game. The recent drop in the cross-border M&A activity is a strong signal in this direction.

For the emerging and developing countries as a whole, private debt and equity flows will likely fall short of meeting external financing needs. The question is how much of the shortfall will affect Latin America. Some countries are better prepared than others. Countries with large current account deficits, strong dependence on tourism and remittances, and limited access to private debt and equity flows will suffer considerably. This of course, points in the direction of Central America and the Caribbean, where a sharp adjustment seems inevitable.

In the largest countries, with access to international markets, much will depend on the ability of private firms to roll over their debt. There are hundreds of corporations in these countries that borrowed in the international syndicated loan market and some that issued international bonds during the last few years. They hold the majority of the outstanding short term external debt as well as the medium to long term obligations coming due in 2009. Financing the public sector is not the problem; the real issue is how to refinance the large Latin American corporations.

The prospects in this regard are not all that encouraging. The supply of credit to the region could fall even further because there are mounting pressures on the capital position of the major banks. Liquidity problems in the global interbank market remain an obstacle for banks to fund additional assets, while tightening of credit standards has been generalized. Last but not least, government ownership (even if temporary and partial) of the large banks changes the priorities in the direction of domestic recovery in the developed world, rather than greater credit risk exposure in emerging countries.

There is no ammunition left

The capacity of central banks to cut interest rates and of governments to provide more fiscal stimulus is very limited. Even in Chile, there is discussion that the fiscal deficit is already too high and that the government should bring it down again next year. The Mexican central bank has said that further cuts in interest rates are not likely, in line with the language other monetary authorities have used recently. In other words, fiscal and monetary policies do not have many degrees of freedom. If the world economy does not recover soon and private capital flows to Latin America remain low, there is not much that Latin American countries can do. Even worse, it is possible that some of the expansionary policies of the recent months will need to be reversed. This is already part of the debate in countries like Mexico, where the government may need a tax increase to cut the fiscal deficit in 2010.

In summary

In summary, Latin American governments and multilateral banks are betting excessively on a sharp economic recovery. For their projections to be right, a major recovery should be already underway. The latest figures, however, do not support that view. Even if the U.S. shows a moderate V- shaped recovery in the next two quarters, China’s imports, commodity prices, and private capital flows could still be the source of very unpleasant news for the region.

Fareed Zakaria GPS this past Sunday brought one of the most popular leaders in Latin America to English speaking viewers with an interview with Brazilian President Luiz Inacio “Lula” da Silva. With questions of the economic crisis, oil, relations with Cuba, Venezuela and Bolivia as well as Brazil’s role as one of the world’s largest emerging markets and role as the healthiest economy among the BRIC nations, Lula’s words will likely have an effect beyond Brazil and well beyond Latin America as a whole.

Recent discoveries of oil off the coast of Brazil, technology, industry and the traditional agro-economy in Brazil has taken the country out of economic chaos of the 1990s into a position of becoming the next China or India of the Americas. While Brazil has taken a hit in the latest economic troubles worldwide, Brazil stands out with Canada as the two countries in the Americas where a fracture of the financial system has not been considered an eventual conclusion by its government, experts and media. Despite what some call an overly positive outlook that Lula has on Brazil, the methods and conservative financial regulations which developed from past economic crisis will aid Brazil, and might save it from the worst effects of the economic downturn and gives Lula an interesting position when speaking on the economic crisis. When asked about AIG and the current problems in the US, Lula cited greed as the culprit, and suggested that greed and the culture of greed would always result in a worse situation for Americans and others worldwide, unless something is done to change that reality.

The election of Obama according to Lula comes with the realization that Brazil and the US share a similar characteristic as nations which often are more powerful than their neighbors, and hold the obligation to offer a hand to those who are smaller. His metaphor for the situation comes from his love of boxing, where he suggested that if one is weaker and falls during a match, it is not the weaker one on the floor who should offer his hand to the larger, it is the one who has the power in that situation who should offer his hand, referring to Obama’s opening of dialogue with Cuba and in response to Fareed’s question about how Obama should handle Chavez and his anti-US approach in various speeches and policy options. Lula’s perspective is an interesting one. As an incredibly popular leader who considers himself a socialist, albeit maintains many conservative economic policy reforms, Lula has positioned himself as a powerful diplomatic voice between the divisions between the traditional economic elite and socialist/populist leaders which often create large divisions in most other Latin American countries. His interview on GPS likely is a move towards bringing in closer ties with Obama, while placing Brazil as an intermediary between the US, Bolivia, Venezuela and Cuba and allowing Brazil to become a responsible regional player on the road to becoming an important international economic player. The ability for Lula and Brazil to cross boundaries is not an easy role to assume, but the ideas expressed from its leaders is a promising one, especially if Brazil is to become the mortar holding together the reputation of emerging economies in the near future.

Click here for Fareed Zakaria’s interview with Brazilian President “Lula” da Silva

The state of Latin America has changed a great deal since the start of 2009. The fate of many nations in the region have been affected by recent losses in oil revenues, problems with financial liquidity and questions about the future of populism in recent economic crisis. Economics, while always an issue in the region has also placed many countries in the position to aid in strategy developments abroad regarding international economic worries while others might have voted in placing wheels on economies in decline. Rights and the changing face of some nations remain undetermined, while bloggers and writers at FPA explore many of these issues in weekly blogs.

The first major change in the region was the referendum on term limits in the Venezuelan constitution. With a slight percentage majority, President Hugo Chavez of Venezuela has won his ongoing battle to allow him to reform the Venezuelan Constitution of 1999 and allow the two term limit of office for the Presidency to be extended indefinitely for elected leaders in the country. Supporters of Chavez and the opposition in Venezuela have vigorously debated on the legitimacy of the vote. Many anti-Chavez activists felt that media suppression, threats, and claims of political violence have arisen out of the last years of Chavez’s Presidency since the loss of the last referendum two years ago. Legal debate on the issue has also abounded as democracy in the country has adopted many legal and political characteristics. A history of the term limits and activities by Chavez and the opposition can be seen here.

The new 2009 FPA Blog on Cuba started last month with many interesting and in-depth posts on the world’s most famous island. The attention on Cuba comes with three major events which will affect the country greatly this year. The 50 year anniversary of Castro’s revolution was celebrated by many Cubans this year, but also frowned on by many anti-Castro activists in Cuba and abroad. A great effect as well is the move from Fidel’s rule to that of his brother Raul Castro. With the health and age of Fidel Castro waning slowly over time and Raul taking up positions of full control, the end of Fidel may come about with celebrations this year as well. With Obama and Raul Castro, there has been a slight move towards a thaw between US-Cuban relations. Some polls suggest that many Americans, and even those in Florida’s Cuban expatriate community have also become more open to relations with Cuba, mind you slight developments only have lead to very slight progress at the moment. The year of 2009 may change things permanently in Cuba if these three elements become larger issues this year.

Another intriguing FPA Blog that will have many crossposts with the Latin America blog is the FPA’s Rising Powers blog. Fascinating posts on Latin America’s influence on the globe have been published, focusing on Brazil and with references to Mexico and their relations to other Emerging Markets have taken shape since the beginning of 2009. With blogs on Latin America, Mexico, China Trade, Cuba and Rising Powers all producing great articles, there will be a lot of future coordination between FPA bloggers in the process. Please refer here to FPA’s Rising Powers Blog where blogger Roger Scher takes a look at Brazil as Latin America’s arising giant.

BBC World News this past weekend held an interesting discussion on the current global financial crisis and its possible future effect on the world economy in its show The World Debate. The discussion surrounded the policies governments, CEO's, banks and international financial institutions used that brought us into crisis, and how those institutions could remedy or perhaps worsen the current crisis, and passively accept responsibility the gains and losses in their communities.

The World Bank and IMF were addressed, as a constant debate in developing nations became a catalyst in the current situation. In the past, economic conditions that forced many countries into an economic system of development to secure loans were seen as forcing the allowance of poverty through savings. With some successes, many countries' small growth were dissipated with a recent hit from developed nations which either never took their donated policies seriously, or were irresponsible in forcing and international financial system that leads to crisis rather than growth over time. This perspective is not new in the developing world, and with many countries either finally producing some growth, paying back loans, and even becoming economic powerhouses, sacrifices by developing nations and their losses coming from abroad.

Banks and CEO's were diligently attacked in the debate, seen as the cause and maintaining the concern of many in the process. CEO's in fact, which have been criticized over the years for being overpaid, used to disassemble rather than build up their companies, taking decisions which border on legality and failing their communities through immoral investments were targeted in the debate. While many CEO's have since then been replaced, the way CEO's and obtained and trained and valued will likely have to change. Banks, as corporations themselves have become nationalised in many countries, and in others are facing tough government and public scrutiny as the cause and result of the credit crisis. The problem of confidence, more confidence of banks to lend as opposed to the confidence the public and industry requires of banks in a society was addressed in the debate. Credit, as a necessity of a healthy economy for small and large companies alike, private individuals and governments, is and always was the centre of the problems. Banks and financial institutions, while being seen at the same standard as other industries are in fact legislated with a great deal of legal rights, and government protection. The exchange is that those banks agree to lend and operate in sensible actions and respect its increased power and responsibility over society and various industries.

The actions of governments will likely have a large effect on the international financial order and the way commerce is done in their own nations. The beliefs that credit is the sole problem of this crisis are neglecting the informal agreement between banks, government and industry that are necessary for society to operate. Immoral and illegal activities must be determined as such before confidence in society can ever be restored. Eventually a new informal agreement between nervous banks and governments need to be reached, but no constructive plan to reform this relationship seems to be on the horizon. Microcredit financing, and small and medium sized business credits, often a success story in developing nations, might be an alternative to frozen credit markets in developing countries. Return to basics and reaffirming the informal contract between banks, governments, industry and society is not only an imperative, but is the only alternative to the global economic challenge.

This week brought some ever-growing attention on Mexico. With the decline in commodity prices as well as a sharp decline in consumer spending, the BBC World Service highlighted Felipe Calderon's announcement to add to Mexico's stimulus package and place an additional $150 million US dollars into Mexico's export industries to keep them afloat. America's neighbours were quick to address issues regarding export industries. The Canadian government was able to beat Bush and Obama to the punch by promising US automakers in Canada part of an auto industry support package with conditions in order to keep the 20% of North America's auto industry within Canada's largest province, Ontario and ensure future jobs for the large minority of Ontario's workforce that are linked to autos. Mexico, while promising $150 million to its export industries will likely have a harder time pushing in billions of dollars like its neighbours into one industry. While Mexico in recent years has been a mark of economic stability in Latin America, the recent security situation in Mexico this past year and activities by the US to stop Mexico from becoming the next Drug War has pushed the US to form a smaller version of a Plan Colombia, spending millions on anti-narcotics support and advice for Mexico and Calderon's administration. With the election of Mr. Obama as President comes the realization that he could have inherited one of the worst State of the Union's in American history. The only person who could likely have a tougher job however is Felipe Calderon, as the economic crisis consumes Mexico's well earned reserves and the export oriented economy becomes mired in the future losses of its main export market, one of the worst security situations in Mexican history has come at a time when there is little money to fight it. In addition, many of Mexico's drug cartels have made a point of attacking government officials, killings many top officials and having others being caught in bribery scandals which could leave Calderon with as much security problems as economic. Some positive developments in the last few years may not stop Mexico's worries, but has prepared Mexico with economic policies that might help Mexico and many other Latin American states weather the economic problems with development strategies that would be the envy of the world's economic policy experts. Economic crisis have hit Latin America on average every 10 years since the 1970s and growth in countries such as Mexico and Brazil have placed them in the best position possible in a bad situation. With Mexico's security situation finally coming on America's radar screen in the past month, developments in Mexico in the last few years has likely opened a dialogue with similar neighbours such as Brazil who has had much success in its economic reforms and is poised to weather this economic crisis with stable growth for the future. In a January 7th FT.com article by Nick Rice, Brazil's economic policies in the recent past has not been able to remove Brazil from the global crisis, but has placed it in a good position to weather the storm. Policies enabling Brazil to grow with commodity exports, conservative lending and well run industries has enabled Brazil to take advantage of slow growth rates and shield Brazil from the ills of excess lending and a lack of diversification. While Mexico differs from Brazil due to its close export relationship with the US and its dependence on oil revenues, the formula for economic growth is likely a topic of much dialogue between Mexico, Brazil and the rest of Latin America. With the future of Mexico's security and economy likely to change greatly with the opening of world credit markets, the stabilization of oil prices and assistance from its neighbours in combating drug cartels and addressing issues of economic reforms, leadership, while an almost impossible job, is more important than anytime since the foundation of Mexico as an independent state. Decisions on future policies and a lot of luck are crucial for Obama and Calderon in 2009.

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There are a few realities that have hit the world this past year and this past month, to which most of the world has been affected by to some degree. Luckily enough, the issues which affect most Americans have made the greatest impact in the last few weeks of the election campaign, and the decisions people will make when casting their vote will be based on how they wish to change the past, and how they wish to see themselves in the future. Both candidates have accomplished something remarkable. The last two election campaigns offered many a lack of choice in a candidate who they felt would really push the country in a proper direction. Eight years of George Bush, Iraq and Afghanistan, the Economic Meltdown, 9/11 and Hurricane Katrina, have left only candidates who can do the job available to be elected. Both Obama and McCain are good people, and either one is capable of placing their efforts into repairing a slightly damaged, well used and still well running America with a lot of work. Americans can do little wrong in choosing either candidate, but with the election close by and Obama likely to win, the following is a letter to Mr. Obama, and with some luck, Mr. McCain from the rest of the world who does not have a vote, but will be affected by their decisions as much as any American.

To start, the neighbours of the United States should be acknowledged for their constant support and connection to the United States. Canada and Mexico, despite issues of trade and immigration have done much in the last few years to accommodate not just Mr. Bush, but Americans as a whole. Currently Canada is one of the only developed nations who did not face complete economic collapse and places over 90% of their trade with the US. It should be acknowledged that trade and manufacturing in Canada has been hit as hard as in the US, and while NAFTA is blamed on Canada and Mexico, Canada is losing the same jobs, the same companies and the same households to tough foreign competition as much as the US. Canada is one of the world's largest oil producers and has always worked to move US energy out of the Middle East and grow stronger ties with Canada's energy and Canada's economy. Jobs being lost in the US, means jobs are lost in Canada as well. When the loss of jobs is blamed on NAFTA, it focuses energy and time on those who were never to blame for the economic problems in the US. To fight Canada and Mexico is to create scapegoats and lose four more years in improving the economy for all of North America.

With soldiers dying in Iraq, and allied soldiers giving their lives in support of freedom and lives in their own countries as well as the US, Afghanistan and Iraq need to be taken as a whole and the support should be given by the US to help fix problems abroad. According to Southern Pulse in their Oct 28th newsletter, over 4,000 people have died in Mexico's drug war, with 1,000 being killed in the last 50 days. Canadian, French, British and other allied troops have been taking heavy casualties in Afghanistan, making the region into a stalemate over the last 6 years. The worst problems have yet to be approached, with Darfur and Africa having yet to receive tangible attention towards genocides in the region which mirrors Rwanda in magnitude and action from the international community. Security in the United States cannot be achieved when those who support the US are under constant pressure and attack. Mexico has had as many deaths in the last year in battling the drug lords as soldiers have died in Iraq since 2003. A serious attempt in Afghanistan and a creative approach to Iraq must be achieved soon so other regions do not fall into chaos.

Immigration, while being solidified as a failed policy must start to acknowledge the existence of many from Latin America and Asia as players in the social framework, even if the legality of many residents are non-existent, they still are a part of every community in the United States. While illegal immigration needs a cathartic debate in America, those who have suffered from action, namely 2 million Iraqi refugees need to be addressed as well and accepted as people who are running from an Iraq which the US has not been able to claim victory and peace over. No greater respect to US soldiers and Iraqi citizens would come from a realistic approach that helps Americans, soldiers and their families, but also those so many fought hard to save; the Iraqis themselves. The use of the word "Change" and "Pull Out" will not stop violence and death in Iraq, only proper leadership will help end the conflict.

With a world depending on the US economy to operate, those nations in Latin America and Europe need a strong United States that will work and support their nations as those nations wish to work and support the US itself. While there is much criticism coming out of socialist governments in Latin America, the majority of nations who have spent the last few years in cooperation with the US and achieving great stability and peace within their own borders should be supported by the US and credit given to their development. Bad policy has created a situation where Chavez can attack Bush, as failure in leadership creates a large scapegoat, but good leadership with focus the attention on those local leaders like Chavez and allow for those democracies to eject problems in their societies. While not to the same degree, America's European partners have actually moved to re-engage with the US in a discussion to not only repair the current economic troubles, but also to re-invigorate the relationship of values and equality that should have always existed between Europe and the US. Elected leaders in the EU, Canada and Mexico have moved towards policies which have been considered traditionally American, and America will move towards a position where it adopts some trends from its partners, as well as hopefully cultivating respect with Europe and Latin America in the process. The future of the US will come with the future of Europe and the Americas. Leadership will only allow for a successful relationship in the future.

Emerging economies must be addressed to end this letter. China, India and Russia, as well as other nations have achieved a great deal of development, and with recent funds have been able to address national problems of poverty and development, many thought were impossible to tackle only 5 years ago. These countries have a right to compete and gain wealth, but if companies from the US and EU seek to find fortune in those countries and work with local companies which may produce harmful products or take away American jobs, than those American and European companies should be challenged and blame should not be placed on Canada or Mexico, who have lost much as well, and irrational barriers should not be placed on developing economies because companies from the US and EU take advantage of their consumers. To create scapegoats in this debate, is to create a situation where no one can foresee economic troubles, and regulation is left to create blameless policymakers in its wake. The crisis of the last 20 years was always not one of tangible losses, but in confidence, that companies and the government might and have lied to you, and that anarchy is unavoidable when problems ignite. Trade, finance and economics needs to work in society, as a parallel to democracy, in order to allow a leader to create any "Change" that is needed. The world needs a US presence, one with clear foresight and the ability to stop alienating its friends and address real threats to everyone's security. Only an understanding of the world who cannot vote will allow for any positive change to take place. A failure is no longer an option for America and their friends.

In the last two weeks while markets tumbled, the amount of information about common issues such as poverty, the food crisis and even the economies of otherwise notable countries have also dwindled as American candidates preach of change and the rest of the world deals with economic aftershock. While Europe and the US slowly absorb their financial industries into the public purse, other middle countries and emerging economies deal with the problems and try to seek out the positive aspects of the world's financial capitals plunging into chaos.

Not all countries, even developed ones, are in the same position as their European and American counterparts. In an IMF report published in the second week of October, countries such as Sweden, Australia and Canada were credited with having very stable banking systems with well regulated capitalization requirements and having sturdy foundations to best weather the latest economic storm. Canada stood out as one of the best, influencing their own election for Prime Minister and allowing the fiscally prudent Conservative Party to absorb many opposition party seats despite having a campaign during the financial crisis that is often blamed on incumbent government policy. Since the start of the Canadian election, the Canadian Dollar plunged from 97 cents US to 79 cents US as commodity stocks lost value. With over 87% of Canada's trade going to the commodity hungry US, Canada has taken steps to keep the liquidity in their financial system and even had talks with President Sarkozy of France before his left the meetings of the Francophone to begin talks for a free trade agreement between the EU and Canada. Despite economic turndown and the drop in Canada's currency against the US, trade will likely finally open up to the EU and Latin America in order to keep relatively cash rich Canadian companies in the mindset of investing their "non-losses" into economies overseas. Activities between the EU and the US played out in the same narrative last week as Sarkozy's mission to save capitalism and create a new global economic order, a Bretton Woods II, lead him into talks with Bush in the US to coordinate a common response to the failing markets. Sarko's proactive approach even reached into France's cultural policy, by planning trade talks with Canada while trying to bring ties between Canada's English speaking and French speaking communities closer and maintain stability in the only G8 country which has not plunged into chaos. Stability in some form in the developed world is what the EU and US need, even if not inside those economies themselves. It is likely that while traditional blue chip investments will not maintain their blue chips forever, it is possible that places like Canada and emerging economies may take some benefits with the losses in the global economy.

With so little information about emerging economies coming out of mainstream media in the last two weeks, some interesting dynamics have been playing out in the process. While not a complete paradigm shift, some investment chatter has been moving towards placing money in China and India due to the recent cash rich position of those economies despite recent losses there as well. While today there was a talk of a financial rescue package between China, Japan and South Korean with its ASEAN partners, relatively China is not the worst off in Asia. While the Chinese and Indian economies are highly dependent on the purchase of consumer goods in the US and EU, cash which has been acquired in their recent economic booms will enable cash rich companies in those emerging markets to purchase shares in many failing companies in the EU and US and might place Chinese and Indian companies in a position to not just be on the production end of product development, but also purchase the ability to vertically integrate their industries by way of relatively cash rich Chinese and Indian investors. This new position does not wholly account for the fact that China and Japan own a good size of US debt, and while Tokyo's Nikkei is feeling the crush of the crisis, the 1/3 of US debt owned by China will only spur emerging markets into a relatively better position despite current losses in China and India as a whole. Even the Middle East is feeling some benefits, as the rise in 2007-2008 oil prices have left many producing countries with money to burn despite recent falling oil prices this month. This will be remedied as well as OPEC will be meeting this week and after to curb the fall in global oil prices and maintain oil at the relatively high level despite the losses in the US and EU and falling demand for their products. In the end, Dubai might replace London and New York to become the place to go for the best and brightest coming out of Oxbridge, Yale and Harvard.

An interesting dynamic has also been created in a region, which has veteran experience in dealing with economic crisis. Latin America has always suffered in the past 30 years since the last oil boom and recession in the 1970s due to poor economic policies, schizophrenic investor confidence and pure bad luck. Only recently have countries like Brazil, Venezuela, Argentina and Mexico been able to weather an economic collapse and pay back their past debts. Initially, the realization that the economic storm has finally come from the US and not from their own economic crisis was not being played down to any degree by Latin American leaders. Initially the strong Brazilian and Venezuelan economies lead leaders in those countries to direct concern about the US collapse away from South American markets. While not commonly known, trade between many countries in South America is often less than 40% with the US. While Canada and Mexico have taken measures to re-capitalise with over 85% of their trade being conducted with the US, South American countries believed their trade position, balanced economies, and well earned savings would allow them to be passed over in the latest crisis. With the collapse of the EU and Asian markets, Latin America followed with a 12 percent drop in the Brazilian exchange Bovespa and the biggest drop in Mexico's Bolsa since 2000. Despite this, IMF predictions of growth in the region in 2009 made in April of this year only shifted down slightly from 4.4% to private investor predictions of a growth rate of 3.5% for Latin America as a whole. With many investors putting their funds into the US Dollar for safety reasons, the paradigm shift, that other economies might be seen as safe investments beyond New York, Tokyo, London and Paris might buoy investor confidence in emerging economies and relatively cash rich nations in order to diversify their funds further as investment risks grow at home to the benefit of stable markets abroad. While not all emerging economies will benefit, as in those like Mexico and Russia which have been hit hard despite keeping afloat and massive recapitalisations, markets such as Brazil, India and China might be able to increase confidence in their economies in the long run and balance many diversified portfolios if economic management and legal protections can be ensured in the next few years. While the paradigm shift has not yet occurred, it is evident that a change in the global economy that was going to take another generation has perhaps emerged in the last month. With losses come opportunities, and with nervous investors and bad policies at every turn, only intelligence, patience and luck will determine if change will occur and create a new economic order.

CNN made a great acquisition taking on policy expert Fareed Zakaria and giving him his own show, Fareed Zakaria GPS which allows for a diverse perspective and a balanced international approach to a network which is often known for its Washington point of view as opposed to the perspective of global politics and policy.  The international perspective needs to be understood from the point of view of Paris, Singapore, Beijing and others. Originally the host of a PBS show and author of the book The Post-American World, Zakaria will likely become one of the most important authors on foreign policy in the next few years.

In a week of economic turmoil, Zakaria in his show F.Z. GPS decided to interview political experts from Singapore, India and China in order to get their point of view on current economic and political activities involving the US and other countries. While many perspectives were discussed, it was diverse in that countries like Singapore, India and China did not fare poorly during the last eight years of the Bush administration. While criticism did come about regarding Afghanistan and Iraq and perspectives regarding Russia's current move into Georgia, Bush's reputation is not wholly being shared by many in the Asia-Pacific, standing out in contrast to the distain for Bush in Europe, the US and even in Canada. The Canadian example is an interesting one. Currently there is a national election underway where in a recent election debate, issues concerning the country came down to 3 of 4 opposition leaders bringing the debate down to its lowest level and simply accusing the current Prime Minister, Steven Harper of being another George Bush. While Bush is not a Canadian leader and is extremely different to any existing Canadian politician, the real policy debate was wasted and the electorate was treated as people who only decide how their communities are formed based on whether George Bush's name is shouted out enough times on television. While Bush may not be popular in the Western world, the effect of using him for political gains outside the US can be just as harmful in forming illogical policy decisions based on someone who has no real effect or relation to a government outside the US at all. While the responses from many Asia-Pacific experts was logical and measured, often similar debates about the last 8 years in the Western world are foggy at best.

While new economic giants such as China and India had their perspectives shown on F.Z. GPS, it is curious to see what the last eight years have brought to countries in the Americas, and why certain policies such as immigration has been largely ignored in the recent election campaign. The focus of the Bush administration in early 2001 was immigration and the relationship between the US and the rest of the Americas regarding free trade and the FTAA. Mostly in 2008, the issue of immigration has remained a regional one in the US, concentrating around states on the US-Mexico border which take immigration to heart, but has not become a major election issue. Trade, mostly an issue with China for the US has been brought up in many border states along the US-Canada border. Talks of renegotiating NAFTA to bring jobs back to Americans was rampant, despite the issue having a lot to do with the US relationship north and south as opposed to its ties eastwards. While Mexico has ever increasing numbers going to the US illegally and a severe drug war which has taken more lives in 2008 than US lives in Iraq and Afghanistan combined, the debate on immigration was mostly nullified last year when Bush tried to pass one of his final bills opening up an immigration policy that might rationalize the current status quo on the border. After 7 years of the War on Terror, the original policy issues from 2001 were addressed, but with such complex problems and the lack of support for anything Bush ties his name to, the issue of immigration in the US will not change at all for years to come. In reality, as pointed out in the FPA Immigration Blog, some illegal immigrants are even leaving the US due to the current economic crisis and many in the US are starting to see the effect of Bush policies as changing the perception of America into a country which as one CNN reporter said, is no longer a "beacon of freedom and hope".

The rest of the Americas in the last eight years have done better than many would expect in the Western world despite many issues impacting the US itself. Canada currently stands out as one of the only countries in the G8 that is not suffering economic collapse, due to very prudent financial policies, good leadership by many governments over the last 5 years and a long term economic boom and national surplus. While being attacked in the Clinton campaign over NAFTA, Canada has been able to not be seen as another China to the US on trade and was able through a great deal of legal debates to come up with a deal on softwood lumber and push Chapter 11 decisions on NAFTA towards a more equitable framework where states have regained much of their power over companies in the NAFTA rulings. Canada has separated its support from the US, ie. regarding not supporting with troops in Iraq, but many citizens support Canadians in Afghanistan and trade with the US. Canada has not fared poorly at all, even weathering the current global crisis with merely slow growth, and keeping a lot of funds in the country and allowing cash rich Canadian companies to buy out many American and European assets if they wish. Canada's oil industry had a lot to do with this, but in the long run 8 years in Canada has not had many ill economic effects.

Brazil is currently lead by prudent left wing leader Lula and has become a beacon for reform and investment in South America. Since financial collapses that characterized the country in the 1990s, Brazil has been able to maintain a balanced level of growth and social reforms that has brought confidence into Brazil and has made it the next likely emerging economy to become another China or India. While political issues still exist to a great degree, oil and slow progress seems to be paying off and Brazil will likely weather this economic storm with a few scratches and bruises, but keep afloat. Chile is in a similar situation. With left leaning leaders and prudent economic policies and progressive social policies, stability may become a mainstay of many countries in the Americas in the future.

Venezuela also has stood out from many of its neighbours. While Brazil has benefited a lot from its oil reserves, Venezuela has had its oil reserves propel it into a forum for Chavez's influence in the Americas and remains Venezuela's only notable source of revenue. Venezuela often uses actions by Bush as the motivator of policy decisions, mostly in cases where the US has ignored Venezuela and Latin America in the last 8 years. In reality, the involvement the US has had beyond some trade policy in the last 8 years has been very minimal, only opening up further ties with economically stable countries who stabilized themselves, and not having any heavy response to populist claims by Chavez and others who often use Bush and supposed actions by the US to justify all types of local policy decisions by populist leaders. While the degree of US involvement in Venezuela is not known but likely is minimal, countries like Colombia have been able to use local and US assistance to independently address local issues. The Colombian Army's rescue of Ingrid Betancourt and American hostages from the FARC was seen as a Colombian initiative and praised by the US as solely Colombian. Ironically the FARC later was accused of having been supported by Chavez himself, mimicking accusations he had against Bush in interfering in local politics. Increasingly criticisms of Chavez come with the diminishing influence of Bush. Without Bush as a scapegoat, it will be hard to place Obama in a negative light and accuse the causation of problems in Venezuela on the President of the US. Recently a critical report on Venezuela lead to the coercive expulsion of human rights leaders from Venezuelaactions which will reflect poorly in Chavez in the future with no Bush to blame for the future.

Many other countries in the Americas have been set with their own local issues and have had some support and acknowledgement from the US in positive and negative manners. Mainly the US in the last 8 years have ignored Latin America due to The War on Terror, and minimal support and ties with the US has not had a negative effect for many in the region and their development. Ignoring the Americas, the backyard of the US and important future allies is not an option, as pointed out by Zakaria in his statements and book. A strong America's’ will do nothing but help the US reintegrate into the international community if respect and independent policies are supported by the next President of the US and progress of the Americas is valued and not hindered. Reactionist trade policy and calling the opposition George Bush when no coherent discussion is available to win votes in an election is not acceptable on any level. Policy cannot be formed by name calling, and any politician who uses this tactic does nothing but to embarrass themselves and their supporters in a democracy. The Bush era is over, and only working for new opportunities is an acceptable conclusion.

In 2001 the head of the Inter-American Development Bank spent much of his time fighting speculation that one of Latin America's giants, Argentina, had enough national reserves to maintain a 1:1 ratio between the Peso and the US Dollar and maintain confidence for investors that they would have their investments returned with acceptable risk. Five Presidents later and six years later, Argentina is fighting to stave off another economic crisis with some added funds in the bank, promises to pay back much of its international debt, and many of its creditors suffering from an economic collapse which might ironically place Argentina in the position to gain added investments if its reputation can handle the latest wave of financial crisis to hit the globe. It is doubtful this will happen of course, but with poor economic and political leadership in the US, the world and its source of international funds have taken a process that was expected to take 40 years and reduce the US into a shared global power into a change in the world economy which is today's reality.

Questions which always have arisen are whether regulations or political leadership had the ability to avert crisis that come from decisions made in private industry and in private boardrooms. One argument regarding Argentina is that loans given to The Argentine and other countries by international creditors place complete onus on the borrower to assume ALL risk in the transaction. As with small business loans in many financial markets, the tradition of incorporation and all of its legal rights for an investor to be separate from the company with separate legal identities is signed away, leaving all risk in the transaction on the head of the borrower. The problem with this on a micro level reflects that of the macro level, leaving all risk on the borrower, but not placing any onus on the lender to make a business decision on their clients in order to avert losses to the company. Like with international lending, risk is always taken by the borrower, so when there is a problem in the relationship, bad business decisions by the lenders result in a situation where gains are taken as profit, but if there are losses the borrowers must go well beyond reasonable measures to pay back a loan that might have been given without consideration to risk, as lending in the modern era has been able to avoid the Invisible Hand of the market as poor economic decisions have little effect on irresponsible lenders who see no ill effects from giving bad loans to people and countries who have no rights to shield themselves from the market.

While Argentina has announced this month that it will make moves to pay back its international creditors (Risk insurance for Argentina is very high or not offered), what is the effect if a whole industry makes poor business decisions and the borrowers simply return their capital and leave the lenders with large numbers of very nice houses? The root of the mortgage crisis is the obvious result, but it must be challenged on three levels. We must return to the ideas of Adam Smith and the root of modern capitalism. Fundamentals such as the Invisible Hand of the market is the basis of the US economy, but in an industry where risk can be passed off to the consumer, sold into the larger market or as we see in the Bail Out, allow for private companies to claim profits but make US taxpayers and government cover their losses, private gains are created and losses are made public. The free market cannot sustain itself as lenders do not take any substantial risk and thus make business decisions which would lead any other company in any other industry into swift bankruptcy, but in the financial industry allows mortgage lenders to make irresponsible business decisions without the consequences of market forces to bear on those decisions.

Regulation and government intervention must be considered, as with such a unique industry which relies heavily on non-risk and government regulation and bail outs, the market forces on the financial industry must invite regulation in order to maintain its non-risk positions and insure losses by way of the national reserves despite poor decision making by those in the industry themselves. The root of financial industry theory is that the market will determine the right course of action for people, but that regulation is needed to insure that losses will not create a catastrophe in the process. In Argentina, the failure of the economy forced banks to literally lock people out of their private savings so that a run on the currency would not create a collapse. Luckily the US does have reserves to cover the losses, but did the crisis comes from regulation impeding the free market, or does the free market simply not work? I would argue that since risk and consequence is the result of any business transaction, an industry which prohibits other industries from growing without giving sensible risk to the lender cannot vent its problems on regulation and a government that is insuring any and all mistakes made as a result of poor decisions collapsing their industry as a whole. Regulation is a key issue as it allowed mortgage lenders to sell their risk into wider financial markets and is the reason why the current catastrophe has echoed worldwide, but the same regulation also is there to keep the US out of the chaos of Argentina, namely, to maintain confidence in the US economy that risk of losses is low and that the market is strong. So is regulation a barrier to the free market and caused the current problems, to some degree it did allow for problems to arise, but mostly due to an industry making decisions without consequence and giving the risk to the public in many forms with no constructive losses to financial companies or threats of real losses to their own private companies.

Leadership, while likely the most media friendly issue and less complicated than the equations needed to understand the Bail Out, has done little to address the true need for proper regulations, the true market effects of the financial industry and creating laws which protect consumers. They have done little to protect the national reserve and provide that economic decision making should bear consequence on those decision makers in private industry and remove the corporate veil for larger financial companies as is the case with many business borrowers and consumers of the financial industry which need those companies to help grow their local economies and communities. As debated by Mr. Obama in last night's debate, the financial crisis we have to date is the final legacy of the Bush Administration, but while a Bail Out may make this issue last week's news, the massive amount of borrowing from lenders in cash rich China, Dubai and other wealthy emerging economies in the last eight years and the economic alienation of US allies in the process in places like Europe, Canada and Latin America may take a process of normalization of investment trends from the US to the world into a situation where those new lender countries will be on par with the US immediately. It was thought by writers like Zakaria and Khanna that over a course of 15-35 years, the US will become one of many economic superpowers in the globe, but due to poor leadership and a financial industry which has chosen to give the death kneel to the American Empire of the 20th Century, measured predictions by those authors will likely come true before the paperbacks of their recently published books become available. The next President, whoever he is, will likely be a better choice than anyone in the last 20 years, and will spend the better half of the next four years cleaning up America as he bears the responsibility for cleaning up everyone else's mess. Like the formidable Cristina Kirchner of Argentina, charm can only go so far when you are the caretaker of a crisis from the past. Suffering politically from chaos which she cannot end and did not create, Obama or McCain will inherit one of the worst jobs you can have in the financial industry, the country's official risk bearer.