Global Latin America thesis

Last year, after seeing this Washington Post chart, I became convinced that we were likely headed into a Global Latin America.

In such a situation, every country will have to get used to the same sort of currency and supply instability that we endured in the 80s (and which other countries periodically go through).

Everything will be up in the air. Only the nimble will survive.

Color me unsurprised when the price of US turkeys doubles in two years, or there is supply line crisis which antiquated regulations end up compounding.

Countries sticking to existing patterns that no longer reflect reality will have the worst of it. Maybe you can afford to throw money at the problem for a while and (say) keep Volkswagen afloat. That will look like it maintains the status quo, for a bit at least, until it doesn’t.

Poorer but more flexible countries, which by necessity have to adapt earlier in the cycle, will come up ahead in the long run.

If you’re flexible, you bend and snap back. If you are not, you hold your position, carry on as always, and then break, abruptly.

Published: 2021-11-12